Credit Card Hacking: What’s that?

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Want to travel for free? Get extra perks for just paying your bills? Or do you just want free stuff? Well, all of this can happen without you really doing anything, except living your life, and paying your bills. It’s called Credit Card hacking.

Within the financial circles, there’s a lot of chatter around credit card hacking. Now, to be clear, this isn’t credit card fraud, where someone hacks into your account and uses it. Instead, it’s using credit cards to your advantage, so that you can reap the benefits of travel awards.

So how does this work?

Instead of using your debit card (or even a credit card that has little to no awards) credit card hacking pays specific attention to the points and rewards that credit cards can offer you.

The idea is this: you get bonus points for signing up, and you use the card to acquire more points through purchases. Then, when when you have enough points, you convert the points to a flight, and cancel your card as needed to avoid any future annual fees. Basically that’s it! Rinse and repeat!

How to get started

First off, you need to have a plan of how you want to use your points. Is the goal to fly to Europe? Or to travel locally within your country? Once you have an idea of what you are saving up for, see how many points you need for your destination. Since I’m a Canadian living in Australia, I’ll speak from my experience, but the idea is the same internationally. Multiple credit card providers partner with various airlines (which is my preference for international flight) that way you can choose who you want to fly with. Alternatively, if you always fly with one airline, such as Qantas, then get a card that helps you acquire more Qantas points. In Canada I went with the RBC Avion card. Once you know your goal destination, and how many points are needed to get there, now you get to pick your card!

Pick the card that’s right for you

Now that you know your goal destination and points needed to get there, check out all the cards on offer. You’ll notice that some of them have 15,000 to 100,000 points on sign up, make sure they offer the airline you’re interested in. When signing up, in order to access the points on offer,  it is expected that you spend a larger amount of money within the first three months (usually around $2000-$3000 dollars). If you’ve been saving for a big purchase, now’s the time to buy! If you spend around $1000 a month, this should be fairly achievable.

When I was looking at cards, I knew that I was going to spend about $13,000 within the first two months, so I drafted up a table for myself. I took into consideration the sign-up bonus. How many points per $1 spent, and what the total points would be after I spent the money. In the end, I decided to go with AMX, since they were the best bang for my buck, plus they had other features like a $400 travel voucher. Even though it had a $395 annual fee, it would cancel itself out due to the voucher, so I thought, why not?!


Amx Explorer Rewards Black Frequent Flyer Black Virgin Velocity
Annual Fee $395 $0 for first year $0 for first year $0 for first year
Sign-Up Bonus Points 100000 75000 75000 80000
2 points for $1 (1st set of points) 13000 5000
x 2 (2nd set of points) 13000 5000
1 for $1 8000 7500 8000
.5 for $1 5500/2=2750 5000/2=2500
Total Points 126000 93000 85250 90500
Points from Melb to LA 44800 219800 90000 50000
Notes *2 for $1 cap at $5000 1for $1 cap at $7500 1for $1 cap at $8000
Airlines Multiple Airlines Multiple Airlines Qantas Airlines Virgin Airlines

What’s Next?

Now that you did the math on what card is best for you, all you have to do is sign up (which takes no more than 5-10 minutes online). You wait to be verified, and that’s it!

Keep in mind that you should only transfer your points over to the airline of choice when you are ready to purchase your flights. Once the points are transferred to an airline, you are not able to reimburse them back to your credit card in the case you changed your mind. So make sure you know exactly what airline you are going with, and double check the flights before converting the points over.

In the case you want to rack up a few more points prior to the end of the year, you can always buy gift cards to the place you frequent (such as grocery stores) so that you acquire more points, even though you weren’t planning on making purchases during that time. Now, this might get a tad tricky, so only do this at your own risk.

Once your year is up, if you want to avoid the annual fee, you can always cancel your credit card. Keep in mind that this can potentially affect your credit rating, so only do it at your own risk.

Other things to note

Credit card hacking isn’t for everyone. It’s probably not for you if:

  • You are living pay cheque to pay cheque
  • You haven’t got your spending/debt under control, as it might tempt you to spend more
  • You can’t pay off your credit card fees monthly on time (you don’t want to get stuck with the extra high-interest fees)
  • You have poor credit card rating

Credit card hacking is absolutely for you if:

  • You are diligent about paying off your credit cards
  • You have a passion for travel
  • Are willing to pay for almost everything on your credit card (if you use cash, you should see this as an opportunity lost)
  • You like to get tax-free points for travel you would have done otherwise

Recommended Credit Cards

I have been loving the American Express Explorer which hooks you up with 100,000 points which you can use internationally. The only down side is the $395 fee which counter balances with the $400 travel credit. Seeing as I had some big expenses to pay off, it made sense for me to go with a card that gave me the optimal amount of points. Of course, find what works for you, and take the time to run the numbers.

Have you tried Credit Card hacking? Have you traveled on points? Any hacking tips you want to share?

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