Travel Hacking-Why I Refuse To Break the Seal
Why I Refuse To Break the Seal
You must be living under a rock if you’ve not heard of travel hacking. Almost every personal finance blog or podcast has tackled this subject at one time or another. So you may be surprised to see yet another post here on DiverseFI. I have assiduously avoided the subject, and have paused several times before deciding to jump into this much hashed out discussion. You may be wondering why I have been so cautious. Certainly I have used points or juggled credit cards at some point to get a cheap flight? Right? Well, the answer is actually no. When it comes to travel hacking, I refuse to break the seal.
It’s not that this time-tested mode of savings is somehow faulty. I have little worries about trashing my credit or losing track of all those cards at once.
I certainly see the benefit. If I have to read another blog about travel to Europe on some ridiculously low-budget, and hear about a blogger having the time of her life. I might just die of envy!
So why don’t I break the seal?
There are some ridiculously superficial reasons:
- I’m just not that organized
- I have better things to spend my time doing
- Tracking finances becomes painful when you are juggling cards
- I like the airlines and hotels that I’m used too, and don’t want to be forced into one brand or another
Unimpressive? Before you get ready to trash me in the comments, realize that there is one other, more sinister, reason that is holding me back.
It Started So Innocently
I barely paid attention to the notice that came in the mail . Originally I thought that the envelope from Verizon Mobile was just another advertising campaign. I twirled it between my fingers on the way to the garbage, before changing my mind. Who knows why.
You can’t imagine the surprise when I read the fine print closely. Apparently, I owed over $2000 for the purchase of three iPhones and mobile service for the last two months.
Funny, I don’t have any business with Verizon!
After several phone calls, It became clear that I had become the victim of identity theft. The fraud spanned multiple accounts, credit cards, and left a number of unhappy creditors.
A few hours later, a police officer was sitting in my living room taking notes and discussing the particulars. Unfortunately, this type of situation, is all to common in our digitally enhanced lifestyle. Social security numbers, personal identifying information, and even debit card pins are dancing around on some dishonest persons computer screen twenty-four hours a day.
On her way out the door, the officer nonchalantly made a suggestion that ended up being the ultimate solution.
You should lock your credit!
On Lockdown
And that’s just what we did. Within an hour, I placed a credit freeze on all our accounts. Although it cost a few bucks, this action pretty much solved our problems. By locking it down, we were able to stop anyone from using our personal information to open new accounts or cards.
Why does this work so well?
Almost all credit companies query either Equifax, Experian, or TransUnion before allowing a new account to be opened. When the account is frozen, they get a polite message saying the report is on lockdown and unable to be viewed. This halts any attempt to open a spurious account.
The Good, The Bad, The Ugly
It was a great relief to know that my identity fraud issues had a limit. I contacted all the creditors, sent them a copy of the police report, and placed a fraud alert with the reporting agencies. I now view my credit report every quarter, and make sure that everything is accurate.
Having your credit frozen, however, makes opening new accounts, churning cards, or getting a mortgage much more difficult. You have to either unfreeze your credit completely, or work with the companies to selectively unfreeze.
This process is no fun, and often time-consuming.
So you will have to excuse me if I refuse to break the seal on travel hacking.
I know!
I know I am missing out!
But unfreezing my credit, or playing fast and loose with cards, provides a clear opportunity to weaken my rock solid chain of personal identity security.
I’m just not ready to take that risk.
(DiverseFi readers, this is post 100 for the blog. Thank you for reading!)
I didn’t even think of identity theft!
I tried travel hacking back in September but totally forgot what I had to do to get the bonus $. I missed out!!! Beside feeling like an idiot I realized I am not organized enough for travel hacking right now.
I do join reward program if it doesn’t involved too much work like on my VISA and get travel points that way.
Hey Caroline, I was really burnt by the identity theft. It really spooked me.
I’m very similar to you in some of the reasons you have for not doing that. It makes a lot of sense, but… 🙂
I’ve just started down the travel hacking road a few months ago because I realized just how much money we were leaving on the table. So, I’ve decided to give it a try and it’s much easier to do than I thought it would be. We’re doing one credit card at a time and running the majority of our expenses through it. Once we get the bonus, we sign up for another an move onto that one. We’re only on our second Chase Sapphire card, but it seems to be going well.
Identity theft is a big concern for me, so I have all our accounts frozen as well. When we went to open the first card, Chase said “no, no, no” and I had to do a temporary lift with a PIN code for them. It took 2 minutes to do online and we knew what to do for the second card.
I’m still new to this whole thing, but for as much traveling as we’re planning to do, it seems well worth it. That said, I know it’s not for everyone.
— Jim
Hey Jim, just wondering. Was it that easy to unfreeze all three credit reports? or did you just find out which company credit card was using and then just unfreeze that one?
Good question – since I had forgotten about it the first time around, they sent me a letter with instructions. In this case (Chase), I believe it was just TransUnion that needed to be opened up. I would guess the “pros” at this would recommend that you contact the credit card company first to find out who they use before signing up.
Thanks!
Seems you are stuck in a rut, as if there is only one way to travel hack and it involves multiple credit cards. There are many ways to get deals and save when you travel. Just don’t use that one if identity theft worries you. I am one who picks up a penny when I see it laying in the road. I hate to pass up free money.
Dr. Cory S. Fawcett
Prescription for Financial Success
Hey Corey, I agree. Lot’s of ways to save money. Credit cards are just one.
If I can boil this down right, you’re basically saying you don’t think it’s 15-30 minutes of your time to thaw your credit so you can sign up for a few cards that could save you several thousand dollars a year.
Like Jim, I just started doing the travel hacking stuff in the past year. I originally thought it was going to be too complicated to manage the cards, figure out what to do with each one, know when to cancel, etc. Then I listened to the ChooseFI podcast explain step by step how to go through the Chase Gauntlet, as they call it, and figured it sounded pretty straightforward.
My wife and I have opened 4 new cards in 8 months or so, and so far I’ve saved more than $4,600 on 13 flights vs. booking with cash — and I still have points left over and my wife gets to fly essentially free with me on any Southwest flight until the end of next year.
I get identity theft being a concern, which is why the lock is available. But that’s why the thaw process exists, too.
If your barrier to entry is really fear of the complexity, I wholeheartedly recommend that ChooseFI podcast. It’ll put you at ease. I wish I had done this years ago.
If your barrier to entry truly is that you don’t think it’s worth your time to save that much money, I would ask you to substitute almost any other comparable task (like lowering your car insurance or mortgage payment or cell phone bill). If you could spend 30 minutes and realize a $1,000 gain in those areas, would you pick up the phone?
Thanks I Dreamer In Chief. I do have fear that loosing the chain of protection may lead to increase security risks. Do you have to thaw your credit for all three reporting agencies or just one?
One can’t argue with saving $4600. Good work!
I am not huge into travel hacking. I did it for FinCon, but I don’t know that I’m willing to consistently spend the bandwidth on it either. Congrats on post 100.
Thanks Penny. I know there are a few out there like me. We are becoming the minority though!
Identity theft is such a big issue. It seems that every month, there is some privacy breech, Facebook being the latest. I do travel hacking-lite. I stick to a few cards, and use the loyalty program for hotels. Saving up for that first class suite on Singapore Airlines.
Travel hacking-lite may be the way to go.
I totally get your uneasiness with too many credit cards and the increased exposure to identity theft. It’s a concern of mine too. I monitor my credit monthly (or more frequently) with credit karma and credit sesame. I also pay something like $5 a month for identity theft protection. With the equifax breech, I feel like anybody could be at risk for identity theft and that opening a few cards here or there would not increase your risk by a significant amount. So far, I have not had any problems. *fingers crossed*
That being said, I do take full advantage of travel hacking with credit cards. I have about 16 credit cards right now and at one point I was opening a credit card every other month to earn some great sign up bonuses. I have done Singapore Airlines suites class (which can retail up to $30,000 round trip) for my wife and I for our first anniversary. It was a wonderful experience, but something I would absolutely not pay for in cash. But for 3 great sign up bonuses and a few hundred dollars in taxes and fees… it’s a steal.
Also, there are ways to tailor your travel hacking plans in a way that you can travel on your preferred airlines and hotels. It just may take some planning. And I get it that some people are just not into it. Like you said, you have better things to do. For me, it’s a passion of mine and I really enjoy the organizing, planning, and finding the best deal aspect of it. And of course I enjoy the travel aspect of it too 🙂
You make great points. I think I need to reassess and consider giving it a try. We will see!
Hi DocG,
I am thinking about trying it too. Will look forward to seeing how it works for you. I always try to do less so I’d rather wait for now.
Hey Dr. MB. If you do…let us know how it goes!
I’m late at learning to travel hack and I really appreciate reading not just your post, but the whole discussion here is an education. So far, I’ve just been doing the “lite” version on my VISA that has 1% rewards. I have another card for our rentals that has 1.5% rewards. That’s it. Makes me feel like a slacker in this FI world.
Even without the Identity Theft issue, it feels kind of weird to have 16 credit cards. I just can’t seem to square that with the idea of simplicity and frugality. But, I did recently use rewards to book my flight to FinCon. That’s a start.
I agree with you on simplicity. I like a certain amount of elegance with my finances.
Sorry to hear about the ID theft. That would get in the way of travel hacking. You could take the lock off and apply for say 3 cards at once or something like that. But that requires organization.
I’m lightly travel hacking too. It’s nice, but I can’t keep track of everything. I just started a spreadsheet to organize my cards/points/inquiries. Like I need another spreadsheet…
Cheers! -Joe
Thankfully the ID theft was a little bit of a pain, but nothing more. I’m with you on the spreadsheets. How else to keep track of everything?
I just don’t travel enough to have cared so far. Last big trip was a planned tour and they did it all for us. Any big trips in the next 5-10 years will probably involve staying with friends in other countries. I do want to get on the maximize the bonuses for credit card train though, so I also feel a bit behind. I’ve been happy with my 2% back for travel/gift cards (places like Amazon) so for, but could probably do better.
Also, in totally with you on the cars juggling. I don’t think I could get my husband on board with it at all! Maybe one for grocery savings since that’s his big spend, and I juggle all the others?
I’m not that worried about identity theft. Actually I am worried, but I feel like it’s almost a risk of operating in society anymore. Just hope I’m not one who has it happen. I have had fraudulent charges on at least 3 occasions but resolved with no problems and just reissued with new credit card number. My favorite was someone trying to book a Caribbean cruise (the credit card company called me to verify that one).
I think identity theft is so common today, there are much better ways of dealing with it. Locking your credit helps big time!
Sorry about the identity-theft doc! I just read the comments and Joe from retire by 40 pretty much sums it up for me. The main credit card I’ve had for a lot of years gives me great points and I can use them for travel and for merchandise. I got an awesome cordless drill for the equivalent of about 20 bucks last year!
But the organization and tracking of it all seems like a pain to me. And yes, like everyone I’m worried about identity theft and it does increase your exposure for sure.
Thanks AF. I’m glad that I am not the only one that is daunted by the organizational aspects!
Congratulations on Post #100! In general, I am on the anti-hacking side. Sure, I see the value in gaming a rewards card for points, but I totally don’t support the idea of spending just to get points. At times, it seems people travel just to earn points instead of focusing on the travel experience. If you have money, save it or invest it; there’s no point in chasing points.
To me, hacking (travel or not) is only worth it when you have a planned expense, especially if that expense is value-adding in some way. For example, maybe you’re getting new siding on a house. It adds value to your home, and you can get a discount through points. Aside from that, it’s too much work & risk for little gain. Too many credit cards and rewards systems is just a hassle!
Sorry to hear you were a victim of identity fraud, but glad to hear you were able to settle things.