Travel Hacking Terms Explained: A Beginner’s Guide

So you want to travel for free. But as you start researching travel hacking, you encounter a number of unfamiliar terms and abbreviations. And if you’re talking to experienced travel hackers, it seems like they understand (and speak) a language you’ve never even heard before. CPP? P1 and P2? SUB? Earn and burn? It’s a lot to learn.

When we first ventured into travel hacking almost seven years ago, we found ourselves lost in all the travel hacking lingo. And while we wouldn’t say we know everything about using points and miles for travel hacking, we’d like to think we have a pretty firm grasp at this point.

Here is a list of travel hacking terms that we’ve compiled to help you understand what all those travel hackers are talking about!

Travel Hacking

Let’s start at the beginning. What is travel hacking? Travel hacking is using points and miles to cover travel expenses. These refer to credit card points, hotel loyalty program points, and airline miles. Leveraging points and miles can allow you to travel more while spending less on those high ticket items (airfare and lodging).

Flexible Points

Flexible Points or Flexible Points Currencies are when your points and miles are not limited to one provider. You can earn these from credit cards, like the Chase Sapphire Preferred or the American Express Gold, and transfer out to a variety of partners. The opposite of this is a Fixed Currency, which is earning United miles or Hilton Honors points. Those points can’t be spent elsewhere (with exception of some select transfer relationships).

Chase

Chase Bank, also know as JP Morgan Chase, is a huge player in the points and miles space. They are the only credit card that can transfer to Hyatt, which is a huge coup (more on that later). For select individuals that are affiliates, you may see them refer to Chase as “the Blue Bank” because affiliate rules prohibit them from naming Chase on their social media accounts.

Chase is a popular player in travel hacking because they have a number of cards that appeal to individuals. The Chase Sapphire Preferred is the number one card we recommend to people interested in starting their travel hacking journey. You can combine this card with a number of no-fee cash-back Chase cards (like the Freedom Unlimited) and have even more points for travel.

Ultimate Rewards

Ultimate Rewards, or URs, are Chase’s flexible points currency. You accumulate URs on cards like the Chase Sapphire Preferred. And if you have a card that earns cash back and a Chase Sapphire Preferred, you can transfer those points in the form of cash back to your Chase Sapphire Preferred for more travel.

AmEx

AmEx also known as American Express, is another big player in the points and miles world. Similar to Chase, you can get several American Express credit cards and capitalize on their transfer partners for your redemptions.

Membership Rewards

Membership Rewards points, sometimes abbreviated as MRs, are American Express’s flexible points currency.

Two-Player Strategy

Two-Player Strategy, or Two-Player Mode, is when you have a second person contributing to your points and miles. Often times it’s a spouse, but it doesn’t have to be. Having a second player helps accrue points faster than if you’re travel hacking solo. In addition to having the spend of two people contributing to your points stash, you can refer one another to credit cards and receive a referral bonus on top of the sign-up bonus.

In situations like this, you would have a P1 or Player 1 and a P2 or Player 2. It doesn’t matter who is which number.

How can two-player mode look?

• One person (P1) opens the Chase Sapphire Preferred
• P1 spends $4,000 in 3 months to get the sign-up bonus, which is 60,000 points. P1 will receive a minimum of 4,000 points on the spend (1x on all purchases and 3x on dining, 2x on travel, 3x on streaming, and 3x on online grocery purchases). In this example, let’s say P1 only uses it for 1x categories. So at the end of the sign-up period, P1 will have a minimum of 64,000 points
• P1 refers P2 for the card – P1 earns 10,000 points when P2 is approved
• P2 spends $4,000 in 3 months on the card and earns the 60,000-point sign-up bonus plus the minimum of 4,000 points on the spend. P2 has a minimum of 64,000 points.
• Chase allows people to combine points within the same household. Decide whose account to combine to, and your Ultimate Rewards fund now has a minimum of 138,000 points
• 138,000 points equals more than $1,700 for travel

Sign-Up Bonus

A Sign-Up Bonus, often abbreviated as SUB, is a key piece of a travel hacking strategy. A credit card company will offer a sign-up bonus as an incentive for opening a credit card with them. The SUB is a reward for spending a certain amount of money in the first several months of opening the card. Our favorite travel hacking starter card, the Chase Sapphire Preferred, is currently offering a sign-up bonus of 60,000 point when you spend at least $4,000 in the first three months after opening the card.

There are some people who suggest you should always be working on a SUB. That’s not something we do, and if that’s not the right strategy for you either, just know there are lots of ways to earn points and miles without opening a new credit card.

Minimum Spend

On the top of sign-up bonuses, let’s add in Minimum Spend. This is the minimum amount required in order to earn the sign-up bonus. In the example above, the minimum spend of $4,000 to earn the 60,000 point sign-up bonus on the Chase Sapphire Preferred card.

Redemption

This might be straightforward, but a redemption is what you choose to use your points and miles on! That’s where the travel hacking comes in. You’re using your points and miles to “hack” your trip via a redemption. That redemption is what makes your travel “free”.

Cents per Point

Cents per point, or CPP, is the monetary value of a point. To calculate cents per point, take the cash cost of the flight or hotel, subtract any taxes and fees required with the redemption and then divide by the points / miles the redemption costs. Multiply that number by 100 and you have the cents per point.

To illustrate this concept, I’ll share a real scenario of where I used miles to cover a flight instead of paying with cash (credit card). In late July, I flew to Denver. For the round trip from ORD > DEN and then DEN > ORD, I used 36,000 United miles. Thanks to P2’s Gold Status at the time, I was able to book a seat in Premium Economy. That seat would have cost $658 at the time of booking.

Plugging these numbers into the cents per point formula, I would take $658 and subtract $11.20 (the taxes and fees for redemption). That would leave me with $646.80. I would then divide that number by 36,000 (miles used for redemption), which results in 0.017967. Multiply that by 100 and I’m left with 1.7967 cents per mile. That may seem pretty low, but according to The Points Guy’s valuation, United Miles were worth 1.35 cents in November 2024. So using that math, I came out ahead with getting just under 1.8 cents per mile.

Is it possible to get a higher cents per point? Of course! But I had planned this trip anyways and it helped me not pay $658 dollars. In fact, we don’t ever check cents per point before booking. If you are interested in checking whether it’s better to use points or pay for a flight or hotel, The Points Guy has a calculator that you can use.

Earn and burn

Pretty much what it sounds like – earn your points and burn (use) them. Similar to how cash depreciates over time, the value of points depreciates as well.

Hotel and airline providers regularly update their rewards programs, with many flights and hotels costing more points and miles than they did previously. When you’ve earned your points, don’t sit on them! It may be tempting to save up for that ideal redemption, but doing so could cost you more points and miles in the long run.

Co-Branded Credit Cards

Co-branded credit cards are those associated with a specific company. In travel hacking, it’s airline and hotel credit cards. We typically suggest people start with a card that earns flexible points, but depending on your travel loyalties, co-branded cards can be a nice compliment.

P2 has a United Club Infinite card, and I have the United Gateway because we fly out of O’Hare, a United hub. P2 also has a Marriott Bonvoy Boundless because we’re partial to Marriott as our preferred hotel chain. Like a different airline or hotel? No problem – all the major players have co-branded cards that you can look into.

Status

All major airlines and hotels offer status programs. In essence, status rewards you for your loyalty to the provider. With higher status comes more perks, thus incentivizing you to spend more money with that company. The more frequently you fly with an airline or stay at a hotel, the faster you accrue status. There are certain credit cards that grant a minimum status as well. Certain providers also have status match programs, where gaining status on one leads to automatic status on another, regardless of how frequently you travel with them.

Currently, both P2 and I have Gold Premier Status on United. P2 also has Titanium status with Marriott. My Gold Premier Status on United gives me Gold on Marriott through status match. When we travel together, we book our Marriott stays on P2’s account because that gives us more perks. I infrequently travel without P2, but when I do, the Gold status I have individually helps me accrue more points towards our collective travel.

5/24

If you’re getting into the habit of frequently opening credit cards for the sign-up bonus, you should be familiar with 5/24. Chase, a major player in the points world, will generally not approve a credit card application if you have opened five cards with any bank in the last 24 months. This isn’t an issue for many people, but it’s something to be aware of if you’re planning to open cards every 30-90 days for sign-up bonuses.

Annual Fee

An Annual Fee, sometimes abbreviated as AF, is the yearly amount you pay to hold the credit card. Our favorite travel hacking starter card, the Chase Sapphire Preferred, has a $95 annual fee. The highest annual fee for either of us is the United Club Infinite, which P2 holds and has a $525 annual fee.

Is it possible to travel hack with credit cards that don’t have an annual fee? Sure, but you’re often relying on accruing points and miles slowly through regular spend with airlines and hotels.

Annual fees, like the one for the Chase Sapphire Preferred, offer perks – like access to transfer partners. This way, you can transfer your credit card points to an airline or hotel for free (or heavily discounted travel). We hold several cards with annual fees, but that’s because the benefits make the annual fees worth it.

Product Change

Product Change (or PC) is when you change your existing credit card to a different card within the company’s portfolio. There are a few reasons you might product change a card. Earlier this year, I requested a product change from the United Explorer card to the United Gateway card. Why did I downgrade this card instead of closing it? The United Explorer Card has a $95 annual fee, and the benefits didn’t outweigh the cost. But I didn’t close the card because I was able to request a product change to the United Gateway card, which doesn’t have an annual fee. Holding any United credit card means I get 25% more miles when I use my favorite travel hacking app – the United MileagePlus X app.

Another time I’ve requested a product change is with the Chase Sapphire Preferred credit card. People can earn the CSP sign-up every 48 months. This is a card I plan to keep in my wallet for a long time, so once I passed the 48-month mark, I requested a product change to the Chase Freedom Flex. The Freedom Flex has no annual fee and earns 5x Ultimate Rewards points on quarterly categories, which can be transferred to the CSP for travel redemptions. I didn’t simply close my CSP and open a new one because it is one of my oldest credit cards, so having that age of credit is better for my credit score.

Not getting any value out of a card and it’s not worth the annual fee? You may prefer to close it rather than go for a product change.

Authorized User

Being an Authorized User (AU) on a credit card means that you have been added to someone’s credit card account and are able to make purchases with that card. The primary cardholder is still responsible for making payments on that card. For some in the travel hacking community, being added as an authorized user is taboo because it takes up one of your 5/24 spots.

For our travel hacking strategy, however, it makes sense to be an AU in select cases. Here’s one. I was recently added to be an authorized user on P2’s Marriott Bonvoy Boundless credit card. Why didn’t I just open the card on my own? Yes, I would have gotten 15 Elite Night credits just for holding the card, but it wouldn’t go towards P2’s Marriott status, it would have gone to mine. I already have Gold Status with Marriott thanks to my Gold Status with United, and I travel with P2 more often than not. Being an authorized user means that I pay with the Marriott Bonvoy Boundless when I travel for work, and I earn Bonvoy points on the credit card for our joint travels. The points I earn for the stay on my account can be transferred to P2’s for our shared travel.

Is this approach right for everyone? No, travel hacking is very individualized! But it makes sense for us, so it’s how we arranged our credit card strategy.

Summary

Are this all the terms you need to know to be a travel hacker? Of course not! But we’re hoping these travel hacking terms give you a 101 introduction so that when you’re exploring on your own, you feel well-versed in the lingo.

We want to know – what’s a term you wish you knew when you started travel hacking? Share the terms you find most helpful and how you learned them!