Travel Tips: How We Use Credit Card Points To Travel Without Paying For It
Over the last several weeks, we've written about how we use points and miles to travel for free. Well, mostly free. We use points and miles to save serious money on travel expenses. However, it does take some work and forethought. We've done a lot of research to be as successful with it as possible. How can you get started? Here are five steps to begin earning all the points and miles you'll ever need.
1. Realistically Assess Your Financial Situation
The very first thing you should do is realistically look at your financial situation. Do you have credit card debt? Why do you have credit card debt? Are you the type of person who pays bills on time? Do you spend money you don’t have? These are the types of questions you need to answer for yourself honestly. Getting a few free tickets isn’t free if you run up thousands of dollars in credit card debt that you can’t pay back. If you have credit card debt, pay it off first. If you can’t quickly pay it off, get a balance transfer card like the Chase Slate. You can transfer any credit card debt you have for no fee and 0% for a year. That way you can slowly pay it off without interest fees.
“Be honest with yourself. If you’re not organized or if you don’t pay your credit cards off every month, this might not be for you.”
Again though, be honest with yourself. If you’re not organized or if you don't pay your credit cards off every month, this might not be for you. Credit limits are not free money. Focus first on paying off debt and being responsible with it. Then look at using credit cards to your advantage. There’s no point in getting deeper into debt.
2. Pick a Points Currency
What if you're debt free and responsible? That's great! Let's get you a credit card. When it comes to points and miles, they are not all the same. If a card earns a bunch of points, it doesn’t necessarily mean that those points have any value. The Capital One Venture Card is very popular because it claims to earn double miles on each purchase. It does. It’s just that those miles aren’t worth as much as others are.
The best points to earn on a regular basis are transferable points. These are points that can be used with travel partners, not just with the bank. The three biggest transferrable currencies are with Chase, American Express, and Citi. Our favorite is Chase. However, all three have pros and cons. We use Chase the most, but we also have cards with all three banks.
We have a few cards from each of the major currencies.
We recommend that most people start with the Chase Sapphire Preferred card. It comes with a 50,000 point sign up bonus. That should be enough to get you two roundtrip tickets inside the United States. You could also use the points for hotels, car rentals or even specific travel experiences. It's probably the best card for beginners.
3. Use the Best Card For Each Purchase
Most people use one credit card for everything. That's a mistake because the average credit card only earns about 1% on purchases. On average you should receive at least 2% back on everything you buy, at a minimum. It's achievable by using the best cards for different purchases. The Sapphire Preferred card we already mentioned, earns 2% on restaurants and travel. Other cards have bonus categories for gas and supermarkets that can go up to 5%. Even if your purchase doesn't fall into a bonus category, a card like the Citi Double Cash earns 2% back on everything. With a little preplanning, you can optimize which card you use to make each purchase. You're spending the money anyway; you might as well get as much of it back as you can.
“You’re spending the money anyway; you might as well get as much of it back as you can.”
4. Plan Your Vacation
Planning is the fun part. Where do you want to go? If you have points built up, the only thing holding you back is deciding where to vacation. Here are some redemptions we've made recently.
Our first points redemption was for flights and four nights in San Fransisco.
Chase Ultimate Rewards paid for our stay at the 4 star Henderson Hotel, in Destin Florida.
We used a combination of AA, Citi and Chase Ultimate Rewards for flights and 12 nights in Paris.
We went to New York with Marriott points and tickets from a cash back card.
Being flexible when planning your trip, can save you a ton as well. Sometimes adjusting your departure or arrival date even by just one day, can save you a lot of points. Last week we wrote about how our friend Kachi saved 70,000 points on a flight by comparison shopping between Chase and United. Researching different redemption possibilities is well worth it.
5. Do It All Over Again
Most cards require you spend a certain amount to get the signup bonus. Once you receive your bonus, do it again with another card. As long as you don't go crazy with it, you can do this as many times as you'd like. Banks love loaning people money because they have no faith in your self-control. If you're disciplined, you can basically travel for free.
Conclusion
We're not financial planners by any means. You know your financial situation better than we do. You also shouldn't get a credit card just because some blog said you should. However, we've been doing this for a while now with great success. It's allowed us to travel more while saving money. You can do the same with just a little organization and research. If you have any points or miles questions, shoot us an email or leave a comment down below.