How To Travel The World For Free: Credit Cards 101

What's up you guys? It's great in here. So, I realized the title of this video sounds like I'm about to pitch you on some weird timeshare opportunity in the Bahamas, and all you got to do is sit through an exciting two-hour seminar to unlock your free reward. Just kidding! None of that. I'll actually tell you how you can travel the world for free and really just the time it takes to watch this video.

Plus, wait a second! I got a really exciting surprise for you. Wait, wait one sec! We got a kitten! This was a rescue. He was severely malnourished, thirsty, and hungry on the street, so I think we got a new member of the family. If you guys have any name ideas, just comment down below.

But anyway, for anyone that doesn't know about this, or for anyone who wants a guide on how to travel anywhere in the world for the cost of absolutely nothing—not clickbait—here it is! Because I am always shocked when people tell me that they paid for a plane ticket, or they paid for a hotel, or they paid to go on vacation. What? I'm just thinking to myself all of this should really be free!

When it comes to myself, I quite literally have not paid for a plane ticket in over three years, and these strategies funded my trip when I went to see Matt McKeever in London, Ontario, Canada, and then when I went to Clearwater, Florida, to visit Ben Malla and then also Dan Locke in Vancouver, BC. Basically, anywhere you want to go, this will cover it!

I would estimate that I probably get between three and five thousand dollars worth of free travel every single year for basically an hour's worth of work, and that's a pretty incredible trade-off if you ask me. So, this video is really meant to be proof that traveling doesn't need to be expensive, that you don't need to have a lot of money to do this, and almost anyone can do it for free.

Well, wait a second! That's not actually technically true because it will cost you one like on this video if you haven't done that already. Just make sure one like! Smash that like button really, really hard; it helps out the YouTube algorithm tremendously. And then also subscribe because it's free, and why not?

So anyway, with that out of the way, without further ado, let's get into the video. Now, this is literally the secret to traveling the world for free, and it's just this: credit card churning. Credit cards will offer some really incredible bonuses just for signing up for their credit card, and the people who understand the art of how the system works can use this to their advantage by signing up for said credit card, meeting the minimum spending requirements, getting the bonus, then traveling for free, and then just repeating the process with the next one.

That's how I've been traveling everywhere I want to go for the out-of-pocket cost of nothing! But in order to do this successfully, we do need to lay down some ground rules and first understand why credit cards do this in the first place. It's really no surprise that credit card companies make a lot of money. American Express is over a thirty billion dollar per year business; Visa brings in closer to twenty billion dollars worth of revenue; and then MasterCard really needs to catch up to them with twelve billion in revenue. And maybe that's why they want to team up with Apple.

So, anyway, the point being, they're constantly competing against one another to get your business. So as a way to bring in more customers, they'll often offer you an incentive to sign up with them. They might give you fifty thousand points, or a hundred thousand points, or cash back, or free hotels, and a variety of other perks and features to get their credit card over one of their competitors.

Which perks and features sounds almost like Doug DeNiro, by the way! This is the Chase Sapphire Reserve, and today we're going to be going over all of its perks and features. And then we're gonna be giving it a credit score, except no one does it quite like Doug. I give up!

Anyway, when credit card companies offer you a reward like this, they're secretly hoping that you'll be just like every other credit card user out there, who on average has an unpaid credit card balance of seven thousand dollars and is paying on average a twenty percent interest rate on that unpaid balance. And the reason I say this is because I want you to understand why credit card companies do this in the first place, so that way you don't fall victim to the same fate that so many Americans face.

Credit card companies don't just offer these services out of the kindness of their own heart. They do it because they know they will take a small loss upfront on the reward, and then over time, enough people will bring in more revenue to the companies so that they eventually turn a profit. No, like I said, credit card companies are extremely competitive with each other. Given just how much profit they can make from each customer, they also understand that you have a lot of options when it comes to getting a credit card. So they want to make it as enticing as possible for you to sign up with them.

The more credit card companies compete with each other for your business, the more that they are likely to give you for free. That is why you can go and sign up for a credit card, meet the minimum requirements, pay off the card in full, get the free travel, go and repeat that with another card, and then enjoy it all for free without becoming one of those statistics of the customers that just become profit for the credit card companies.

But listen up because there are some very important rules that must always be followed in order to do this successfully, and this is what they are. The first rule of credit card churning is: don't talk about credit card churning! Just kidding! No, really! The first rule is don’t ever spend any money you wouldn’t ordinarily spend.

For example, to get some of these signup bonuses, it will require that you spend a certain amount of money on the card within the first few months. Most people, they think, "Well, wait a second, Graham! Because I have to spend three thousand dollars just to make seven hundred fifty dollars back, that doesn't make any sense." And that is really a prime example of why financial literacy needs to be taught in schools, and the sad reality of how most people think. And it's usually those people that are most profitable to credit card companies.

The correct way of thinking here instead is that I'm going to put my normal everyday spending on the credit card until I reach the requirement, and then I'm going to get the bonus from money I was going to be spending anyway. That way I can get something for free and enjoy a zero-dollar vacation instead of paying for that stuff with cash or debit or another credit card and then getting nothing.

Or if I know I’m gonna have a home remodeling project coming up, I’ll often just open two or three credit cards at once, break up the remodeling cost between those cards, and that way I can get multiple signup bonuses for money I was going to be spending anyway. This is a very strict rule when it comes to credit card churning: that you never spend any additional money you wouldn’t ordinarily spend on the credit card.

Now onto rule one-and-a-half, I guess we could say, if you don’t spend enough on your own to meet the minimum requirement—which is a real issue for people who love that frugal lifestyle—it becomes a bit more tricky. And here are some other strategies that you can implement as well.

The first thing you could do is prepay expenses. For example, instead of paying your car insurance bill monthly, maybe you could make one lump sum payment for your entire year on the credit card. Plus, usually, when doing this, they'll give you a discount on top of that as well. Or there are also plenty of other services that you can prepay all at once. That way you don’t spend any additional money but you get it all out of the way upfront early on the credit card to get the sign-up bonus.

Now secondly, you could look into what's called manufactured spending. Now, this one is for entertainment purposes only, and you must do your own research. I'm only telling you what some people might hypothetically, in theory, do; and that is my disclaimer for all of you guys who are wondering. But this is basically a tactic where people use their credit card at the grocery store to go and buy prepaid music gift cards. Then they use that Visa gift card to purchase a money order addressed to themselves, then they take that money order, deposit it into one of their bank accounts, and then use that money to pay off their credit card bills.

So, you basically have the circle of spending money to yourself, and sometimes that will trick the credit card into thinking that you're actually spending the money at the grocery store. Now, there are some other techniques when doing this as well, but here’s all I’m going to say about this: some people have plenty of success with it; other times, credit card companies catch on to it. But ideally, your organic spending should be enough to meet the minimum starting requirement needed to get the bonus.

Now secondly, what most people fail to understand is that using a credit card doesn’t need to cost you any interest. In order to successfully do this, you do not need to pay any interest on a credit card whatsoever. You are only charged interest if you don’t pay off your balance in full by the time it’s due. So all you need to do is not spend any money you don’t already have and then pay off your credit card in full. That way you pay zero interest! It’s so simple to do, and so few people really understand this.

Now, the third rule of credit card churning is: do not do this if you’re about to get a loan on a house or a car. Now, this is because there is a very mild impact on your credit score every single time you apply for a new credit card. Now, for someone like me, who already has thirteen credit cards, three mortgages, two paid-off lease payments, an auto loan, and a partridge in a pear tree, opening up another credit card doesn’t really make any impact on my score. It’s maybe like two to three points maximum. And when my score is close to an 800 anyway, going down to like a 796 doesn’t make any difference to me whatsoever.

So for most people out there, just expect that opening up a credit card might lower your score anywhere from three to ten points temporarily. This is no big deal for someone going from like a seven thirty down to a seven twenty-four, or for someone who isn’t planning to get a mortgage or a car loan in the next 8 to 12 months. This is not going to make any difference to you.

And finally, the fourth rule on credit card churning is cancelling the card. This is my most single commented question anytime I talk about credit card churning: if the card has an annual fee, do you cancel it after you get the bonus? And my answer to that question is always this: it really just depends on the card. If the card does not have any annual fee, I will always keep it up, and no matter what, there is zero downside to keeping a free card open. So you may as well just enjoy it as an extra line of credit, even if you rarely use it.

And if one of the cards does have an annual fee, it really just depends on if I get enough value from the card to justify keeping it open. It's really always a case-by-case basis for each card. But my advice is always this: if you're not going to get the value for the card after the first year, then I would recommend considering to close it if it has an annual fee. If you will get value from the card and find it worth it to keep it open, then by all means keep it open.

And that's it! If you follow those rules successfully, you can enjoy plenty of free travel around the world for the low cost of free. And since some of you might be wondering, here are a few examples that you could take advantage of. But I just want to make it very clear, I'm not using any of my own referral links for any of the credit cards listed down below in the description. I don't get anything if you sign up for one of these cards or not. I enjoy making these videos; I love talking about credit cards; I like seeing people get free stuff; and that's good enough for me. So there is no incentive or any like thing I'm trying to push down below, or any credit cards I'm trying to get people to steer towards. I don't get anything from it.

So anyway, enjoy that! Hit the like button, and these are my recommendations. Now, because these offers change so frequently, if you're watching this video after June of 2019, I would recommend checking out the following sources which will list the best offers and keep a current up-to-date list of everything. The first one I like is the Points Guy blog. He’s usually one of the first ones to cover new cards and gives a very good breakdown. The same thing applies also with Nerd Wallet; that's another really great resource. I also use the Reddit churning community, and that is my top forum to go to. In addition to that, you also have YouTube channels I watch all the time. One of them is asks epi, and the other one is the Credit Shiffman. They each have their own style, and they cover some really great information when it comes to credit. So if you're at all interested in that, definitely go to their channel and show them some love and say Graham sent you.

So anyway, without further ado, here are my top three credit cards to use for free travel. Now, in 2019, my first recommendation is a basic starter card for anyone who's brand new to credit card churning, and this was also my first credit card that I got for the points. That would be the American Express Gold Card. I found a link where you can get forty thousand points when you spend two thousand dollars on the card in the first three months. That is the equivalent to getting nearly two free round-trip plane tickets to anywhere in North America when redeemed through Aeroplan.

Now yes, obviously there is a two hundred and fifty dollar annual fee that you pay, but you do get back a hundred dollars of that as a statement credit, and then you also get ten dollars per month as a dining credit. So really, this means you only spend thirty dollars out of pocket for pretty much two round-trip plane tickets! I have a link to this card down below. Now keep in mind this is not my referral link and in no way affiliated with this link, but it was the only one I can actually find. Otherwise, if you don't use a referral link, you'll only get thirty-five thousand points.

Now, the second one I really like is the Chase Sapphire Preferred card, and you'll get sixty thousand points when you put four thousand dollars on the card in the first three months. No, even though it does have a ninety-five dollar annual fee, you are getting seven hundred and fifty dollars worth of free travel just by getting the credit cards. That'll leave you with six hundred and fifty-five dollars of net profit when you use it for travel.

Now, the third one is something that I'm literally about to open for my A Scorp, and that is the Chase Ink Preferred. Now yes, this is a business credit card, but for ninety-five dollars, you'll get eighty thousand points when you spend five thousand dollars in the first three months. Like I said, I really just put all my normal business expenses on the card, then I get the eighty thousand points, which to me is really worth like twelve hundred dollars worth of free travel. So basically, after the annual fee, I'm making eleven hundred dollars in profit, really just for the time it takes to get the credit card.

And wait a second, I lied! One more offer for those of you that like free hotels—which is basically everybody—that would be the Amex Hilton Honors 125,000 point offer when you spend two thousand dollars in the first three months. That's worth about seven hundred fifty dollars in free hotel, and even with the eighty-nine dollar annual fee, you're still profiting about six hundred sixty dollars just for signing up for the credit card.

So really, as you could see, getting these free rewards really starts adding up quick! You start small, you get one card at a time, you get one bonus at a time, you slowly scale up as you get more comfortable with it, and pretty soon you'll be traveling around the world, getting free hotels, getting free plane tickets, and smashing the like button in every single country just for doing this.

So with that said, you guys, thank you so much for watching! I really appreciate it. If you guys enjoy content like this, feel free to subscribe. It is totally free; there is no annual fee to do that, and I post three videos a week. So if you want to be a part of that, feel free to do that.

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