Rachel Cruze: Why I Never Waste Time With Travel Hacks
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Josephine Nesbit
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Nicholas Morine
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There are a number of ways you can earn points or miles to save money on future travel, but personal finance expert Rachel Cruze says don’t waste your time.
Travelers can spend pennies on the dollar by “travel hacking,” which involves redeeming credit card points and frequent flier miles for cheaper flights, hotels, car rentals and other costs. You can earn points or miles by using a specific airline, hotel, credit card or rewards program.
When done correctly, travelers can save hundreds or even thousands of dollars. By contrast, Cruze explained on her podcast, “The Rachel Cruze Show,” why she doesn’t play the points game when it comes to travel.
Changes to Some Travel Rewards Annoying Customers
Cruze mentioned a change Delta Air Lines made in September, one which makes it more difficult for customers to earn elite frequent flier status. Next year, customers will earn Delta Medallion status based on spending, instead of a combination of dollars spent with the carrier and flights, CNBC reported. The new model is similar to that deployed by American Airlines.
This caused a lot of anger and disappointment for Delta customers, Cruze said. Customers now have to spend significantly more money to earn these points.
“This is always going to be the problem with any system when it comes to rewards or miles or points,” Cruze said. “Because at the end of the day, the massive corporate companies are always going to be concerned about the bottom line… which means they don’t really care if you go into debt as long as they profit off of those increases.”
Some people have been very successful with travel hacking, but Cruze believes it’s not worth the risks, time and energy for most people.
One of the biggest risks involves the use of credit cards. Travel hackers often use multiple credit cards to get free or reduced flights and nights at hotels.
Applying for credit cards leads to hard inquiries on your credit report, which can lower your credit score temporarily. New cards also lower the average age of your accounts, and if you miss a payment, it can result in fees and penalties. If you’re 30 days past due, Experian says the credit card issuer can report the late payment to the three major credit bureaus, and the late payment can stay on your credit report for up to seven years.
To reach your travel goals, Cruze recommended getting out of debt first and setting money aside for trips instead of using travel hacks. The key, Cruze said, is to use your own money instead of playing the game.
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