Travelling for free – working the credit card system for Canadians

I hate paying full price for flights and hotels. I’m always trying to find the best angle to reduce my travel costs so I can spend more money on experiences or fantastic meals at my destination.

For the past few years, I’ve been working the credit card bonus game, and have earned $6,850 in free travel, for just $300 in annual fees. All it takes is time, effort and great record keeping.

Two important things to understand.

First, never carry a balance. Ever. If you’re the type of person that carries a balance on your cards, the credit card bonus game isn’t for you. Interest rates on big bonus cards are often very high, and it makes no sense to pay $1,000 in interest in a year just to get $450 worth of flights.

Second, rest assured that if you have good credit, applying for multiple credit cards and cancelling them before the next annual fee is due has a neglible impact on your credit. It hasn’t impacted our credit rating at all, and I’ve cycled through a dozen cards in the past two years. I’ve grilled a couple of people in the financial world and they say it has no impact.

I recommend you start a spreadsheet to track your system. I track which cards I’ve applied for, the bonus details, if I can refer friends for extra bonus points, when I have to cancel the card, and when I can reapply and re-earn the bonus someday.

I started with Aeroplan bonus cards, most of which offered 25,000 Aeroplan miles after spending $500 in the first three months. The first bunch I applied for had no annual fee for the first year.

25,000 Aeroplan miles is worth one domestic return flight, so $600 for me, as we usually use the miles to go to Nova Scotia.

After receiving the card I track my spending, ensure I’ve received the Aeroplan miles, refer my husband to the card then cancel the card. Aeroplan bonus miles don’t disappear when you cancel the card – this is important to note.  Then I make sure he spends the $500 in three months, gets the miles and cancels the card.

Aeroplan miles will only cover the base flight, not the taxes and fees. We use other cards that offer travel reimbursement as the bonus and reward. For instance, our Scotiabank Rewards card offered a signup bonus worth $300 in travel rewards for spending $500 in the first three months, no annual fee. So we use the Aeroplan points, put the taxes on the Scotiabank card, and apply that $300 in travel rewards against the taxes. You can also use that $300 in travel rewards against hotel rooms, car rentals, etc. You can’t cancel these cards before redeeming the reward – so be use to use the benefit before you have to cancel to avoid the annual fee.

We also have the WestJet Elite Mastercard, giving us a $99 companion flight each year. We use this as our primary credit card, and use the reward dollars earned against the first flight. The companion flight must be used on the same flight as the cardholder.  Credit card companies are adding new cards all the time, so there are always new ones to cycle through and get bonuses from.

I’ve included a few websites that list up to date credit card deals.

If you have an questions or additional tips, please let me know in the comments!

RateSupermarket.ca

GreedyRates.ca

Creditwalk.ca

Want help navigating the travel hacking system? Canadian super traveller Matt Bailey has a website that offers deals and tutorials straight to your inbox. Visit CanadianFreeFlyers for more info.

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