Wednesday, May 20, 2015

Travel hacking, it's all about the points

This is part 2 of my foray into the mysterious world of finding the loopholes to save money on travel. In part 1 I talked a little about the best cards to use to pay little or no foreign transaction fee or overseas ATM fee. In this one we'll talk about points. Frequent flyer points, or miles as the yanks call them.

The vast majority of information out there on the web relates to the North American, more specifically USA, market where it has been possible for many years to apply for new credit cards with healthy signup points bonuses, then discard them after the points have been awarded. This is known as credit card churning, and can be quite lucrative. Apparently it doesn't actually affect your credit rating too disastrously either, especially if you are paying off your debt on time.

Because of the huge US market, there's a lot more competition, especially as their banking sector isn't quite as regulated as ours is. Umm hello, GFC??

Recently, however, Australian banks and financial institutions have been offering some of these deals too. However, they are nowhere near as generous, and often the points offered are awards points, not frequent flyer points. Transferring awards points to flyer points is often not lucrative here, with poor conversion rates from 2 to 1 or even less. My Visa card, for instance, can earn me 1 FF point for every $4 spent. That's just plain ridiculous, and why I don't bother doing the transfers.

But it's worth keeping an eye out for these deals, and working out whether a year of fees is worth the points bonus. No, they aren't likely to be fee free...

Amex cards seem to offer the best points deals, and as more places accept the card, the more points one can earn. I currently have a gold Amex affiliated with the professional College I belong to, although I believe that that affiliation has ceased. At present I am paying no fees on the card, and every dollar spent is credited as one Qantas frequent flyer point. Needless to say, I use this card to pay for as much as possible. That's fuel, the local grocery store, Bunnings, strata contributions on my investment property, airfares, car hire, season passes to ski mountains, indemnity insurance, and other sundry bills that will accept it. Even adding in the extra cost I might be slogged for paying with Amex, it's a better points per dollar spend than Visa or MasterCard offer.

So far I've got just shy of 130,000 points which will get me a return flight to Europe but it's peanuts compared to what's out there for the taking.

Recently I started reading the Australian Frequent Flyer website, which is a pretty good resource for anyone starting out this journey. There I learnt about dynamic currency conversions and how they are usually a big ripoff. Lesson learnt, always pay in the local currency of the country you are in and let your bank do the conversion.

I also learnt that it's possible to pay your tax bill using a credit card that earns points. I have had to pay a few thousand dollars extra tax this year and now realise I could have converted them into points. For those with businesses doing quarterly BASs, this is a pretty awesome way to earn a lot of points. I'm going to work out how to pay my capital gains tax this way, which potentially could earn me more than 100,000 points. Yeah, it's going to be a big tax bill...

Current things I'm doing to increase my points balance is purchasing myself a Qantas gift voucher every Christmas. Each December Qantas offers a 10 points per dollar spent gift voucher offer, so if I use my Amex to purchase a $500 voucher, I earn 5500 points, plus the points I earn when I actually fly using the redeemed voucher. It is also a tricky way to avoid paying credit card charges: there's no credit card charge on purchasing the voucher and the voucher is redeemable dollar for dollar. The voucher needs to be redeemed within 12 months, so you have to plan to use it before purchasing it. I should probably look at spending $1000 given my latest propensity for skiing in Japan as well as New Zealand.

Another way to get points is to use Qantas cash. This is the travel card that Qantas offers, where you can load various currencies onto the card for use overseas. I'm not a fan of travel cards in general as I think there's too much gouging on foreign exchange and ATM fees, plus they don't do that many currencies. I prefer the ease of the Citibank Visa debit card, which stays loaded in your home country currency and only does the foreign exchange when you go to the ATM. My previous practice has been to use my Amex for purchases, which also offers 1 point per dollar, but it too gouges large commission fees. Qantas cash have just announced a bonus points offer on loading of money into the card until June 30, so it might be worth giving it a trial on my upcoming NZ trip. If I just use it for purchasing and keep the Citibank debit for cash withdrawals, I might do a comparison between it and the Amex. Of course the cheapest option for purchases will be the 28 degrees card, but no points earned with it. Will report back on this one.

I do a reasonable amount of online shopping, to the despair of my retail shop owning friends, who get very angry with me for pointing out that some retail shops don't exactly provide a good enough service to stop me hitting the websites instead. I only recently discovered the Qantas Online Mall, which is essentially an entry portal which then tracks your cookies as you go online shopping, be that eBay, David Jones or a few other places. So instead of going to eBay directly, I go through the Online Mall portal, log in, then go on to eBay. My purchases then all earn points, anything from 2 points to 8 points per dollar spent. Sure someone's using those cookies to sell to some marketing people, but I don't really care. I'm always signing up for various deals and then unsubscribing when the email spam gets too annoying. There's no such thing as a free lunch..

The AFF website talks a lot about status credits. I've never really hankered to travel in the pointy end of the plane, but if it's possible to gain silver or gold status fairly easily then I think I'd enjoy the extra luggage allowance for ski trips, and lounge access for layovers. Other frequent flyer programs offer faster tracks to higher status than Qantas, and if affiliated via One World, you can use the benefits on Qantas as well as any other One World carrier. The standout here is American Airlines Advantage program, which could see me gaining higher status from flying across the Pacific and back. I've been contemplating a North American trip in the near future anyway.

Another advantage (ha ha) of the American Airlines program is you can purchase flyer points with cash, and they often run special deals as well. The real clincher is that American Airlines treat Australia and New Zealand as the same country, so I can fly to New Zealand from Perth for 10,000 redeemed points, which I can purchase for $300. Qantas offers award flights for 25,000 points, plus fuel surcharge, which American doesn't charge, or I can get a cheap economy flight for $500-600. So yeah, I just signed up to AA.

I recently took advantage of the option on Jetstar flights to purchase miles and status. A flight from Sydney to Perth in October cost me $118 (before luggage), plus an extra $20 to purchase miles and status credits. That's not a bad deal at all.

I do hope I haven't bamboozled you all with all of this. It's a bit of a learning curve for me too, but it shows that you don't really have to go around changing your spending patterns, you just need to know what to use and how, to get those points rolling in.

In summary:
1. Citibank visa debit card and 28 degrees credit card don't charge foreign transaction fees, so are the cheapest way to purchase products and withdraw cash from ATMs overseas. But neither earns frequent flyer points.
2. Amex cards offer 1 frequent flyer point per $1 spent overseas, but have quite high conversion fees.
3. Qantas cash also offers 1 frequent flyer point per $1 spent overseas, I am yet to compare its conversion fees against Amex. Special bonus points offers come out regularly and these are times when loading the card for an upcoming trip is most advantageous. However, this is a prepaid card, not a credit card, which has both advantages and disadvantages.
4. American Airlines frequent flyer program, which is a One World Alliance member, has a fast track program to higher status levels, and offers members the opportunity to purchase flyer points with cash. For people flying between the west coast of Australia and New Zealand there is the opportunity to purchase award seats for $300 rather than the usual $500 - $600 for a discount economy fare.
5. Cheap Jetstar tickets offer the option to purchase miles and status for not a lot of money. Enough status credits and you're swanning it in the Lounges and getting larger baggage allowances. Worth purchasing.

Again, you're welcome.

Tuesday, May 19, 2015

Why I travel slow

I was having a conversation with a couch surfer I recently hosted about how I always like to use up a visa. I suspect this comes from my upbringing of not wasting things, hence why I over eat and am a hoarder, but that's another story... It also goes some way to explaining why I travel slow.

Sure if you've only got a 2 week vacation, you've only got 2 weeks, but if you're on a longer trip you have the luxury to take your time. A longer travel period for me doesn't necessarily mean travelling to more places, it means spending more time in each place I visit.

My approach is to pick a country I'd like to visit and find out how long I can spend there on the typical tourist visa, or exempt period, and what other visas or extensions might be available should I wish to extend my trip. Yes, just one country at a time. Others may try to fit as many countries as they can into a 3 month trip to Asia, I do pretty much the opposite.

Despite the fact that I am not a long term traveller (yet) I have never ascribed to the idea that I need to see it all. I know I can't. The world is too big, there's just too much out there. and trying to see it all is frankly overwhelming. However, taking time to look around, chat to locals, go for an aimless wander in a strange town, eat at a local market, always creates fantastic experiences and memories I will cherish forever. Sometimes it is a beautiful piece of architecture, or an interesting museum exhibit, a view from the top of a mountain, or across fields of green or a sandy beach, but it may just as easily be blowing bubbles with kids, chatting with a street vendor, or sharing snacks on a bus.

Knowing I can't see it all means the pressure is off. There are no expectations. I don't HAVE TO do or see anything, which leaves me open to opportunities.

I by no means prescribe to the idea of travelling without knowledge or direction. That, to me, is both disrespectful and arrogant. If you are in a strange place you should not expect to rely on the hospitality of others just because you haven't bothered to do your research about a place before hand. A little bit of language, a little bit of pre reading about the culture and norms, makes a massive difference to how locals will treat you.

If you've been reading my blog for a while you'll know that I research my destinations in great depth, from books, guidebooks, websites and blogs, including foreign language sites which I translate using Google Translate. I do a pretty good job of finding out what's to be seen and done in the country I'm going to. I also make an effort to learn about political, human and animal rights issues, so I can travel responsibly and ethically. No Tiger Temples or orphanages for me. I'm not perfect, but I try my best to be informed.

Then, armed with the knowledge of how long I've got, I put together a rough itinerary of places I'd like to visit. Knowing how long bus rides in the developing world can take I factor in travel days that don't involve any sightseeing, and I also allow time for preparation. Like if I want to do a trek somewhere, the first day might just be preparing for it, getting food, hiring a guide and equipment etc.

Once I have my rough itinerary I head off. In practice, nothing turns out as planned. The trek turns out to be overpriced, the weather conspires against me, I find out about an alternative destination from fellow travellers and go there instead, I decide to stay an extra week because I love it so much. Sometimes a place doesn't excite me at all, so I move on. But none of that matters because I don't build up the expectations. Each day I find new things that excite me, travel is never boring.

Travelling fast, on the other hand, is exhausting. There's an agenda, a timeline that must be kept to. For me, the timeline that really annoys me is the visa expiry date, when I have to leave the country and go somewhere else. Just sometimes I'm ready to leave, but usually, there's so much more I want to do and see right there, even though the next country will be just as interesting.

I think when travelling fast it's easy to feel like you've seen the sights, ticked off the bucket list items, eaten the national specialty and seen a traditional dance, and convince yourself you've had a glimpse of the life and culture of the country you've visited. But once you travel slow, start having conversations with people about life, family, politics, religion, culture, you want to explore more, know more. You don't want the glimpse, you want the immersive experience. And its addictive.

Travelling fast you pretty well maintain outsider status the whole time. It's probably why people moan about not having authentic experiences when they travel. You've got to slow down for that. The conversation you strike up with a stranger isn't going to lead to an invitation to come to a wedding if you've got a bus ticket already booked to the next place and you're leaving in two hours. I still regret that we weren't able to go visit a village with some newly weds when we turned up in a small town in rural Laos because my travel partner's visa was about to expire and we needed to get back to civilisation. I know it would have been an awesome experience. Instead, we ended up dining with a Kiwi expat working in Bangkok who does philanthropic work building schools in rural Laos. That was a pretty interesting encounter as well.

I love returning to the same market stall for breakfast each day, and seeing the smiles of welcome that come with familiarity. Being able to chat with the transport guys without them haranguing me for a ride, even learning their names. Ending up teaching English in a secondary school for a day, travelling there through lush scenery on the back of a motorbike, then having another session with university students training to be English teachers. Having a long conversation with a mother about her dreams for her daughter and her worries about how her late night texting is affecting her sleep and schooling. Conversing with a farmer in a rice paddy in the wilds of northeast Vietnam, who is seriously worried about climate change because it doesn't rain at the usual times any more, but floods and droughts are getting more frequent.

It's these connections that you make with people, no matter how disparate our backgrounds, these little acts of familiarity, that stop you feeling lonely when far from home. The realisation that although this family may live in a dirt floored hut with unreliable electricity and no running water or toilet, they have similar dreams and hopes for their children, concerns about the environment, disdain for corrupt politicians, as someone living in a double brick house with a big backyard in Australia.

It makes sense that we want to stay connected, and I mean on a personal physical level, not virtually. It feeds our souls more than ticking off a bucket list of sights and vicarious experiences ever will. I will never forget hot-air ballooning over the Serengeti, or skiing the Tasman Glacier (both of which are true bucket list experiences I would highly recommend), but I'll also never forget all those people I've shared snacks with on long bus and boat rides (I never sit with the westerners, always with the locals, they know where the more comfy seats are), my knight in shining armour in Malang, the complete strangers who've invited me into their homes, and the fantastic couch surfing hosts I've stayed with. Those people are what makes travel sustainable for me, and I mean for my soul.

Slow travel is pretty kind on the pocket too, as transport costs tend to take a good chunk of your travel dollar so if you're moving less you're spending less. Staying longer in one place can often mean a discount in accommodation too. Local hospitality can also be incredibly generous but should never be expected. I believe that I have a responsibility to contribute to the local economies where I travel, and taking advantage of other's generosity only to make my travel dollar go further is a pretty heinous act in my moral code. Unfortunately I see far too much of it in my travels.

There really is quite a bit of ugly out there on the road. I've met people travelling on next to nothing who do it with such generosity you feel you are doing them a favour, but I've also met my fair share of sneaky cheap selfish stingy cheapskates, who are obsessed with getting the lowest price or paying nothing and are just plain mean about it. Unfortunately the former aren't quite as common as the latter, but I've been lucky to meet some, who totally live the reciprocity of giving in a non monetary way. I did my fair share of living on a minuscule budget back in my 20s and I decided I'd never travel like that again. Budget travel is one thing, obsessing over the price of everything is quite another, and no way to enjoy yourself. Luckily, that's no longer an issue for me.

Karma. Pay it forward. These concepts apply just as much to travel as daily life. Travelling slow allows me to make connections, be generous to others, not just think about myself. It feeds my soul and keeps me wanting to travel further and longer.

Just slowly...