I love to travel and so does my family. As much as we love to explore new places and spend quality time together, we don’t have a huge vacation budget. When my girls were little, we wanted to start taking family vacations to places such as Disneyland, New York, and Hawaii. Flights were expensive for a family of four, not to mention hotel costs, entertainment, and rental cars. I started researching ways that would allow us to take vacations every year without breaking the bank! I started earning airline miles and points by using travel credit cards to pay for our monthly expenses. Here’s a beginners guide on how to take amazing vacations for a fraction of the cost!
(disclaimer: the information contained on this website is not considered financial advice)
- First, I must mention that to apply for credit cards that offer bonuses (this is where you maximize your points and miles) you must have excellent credit. Check your credit score before proceeding!
- You will need to change your mindset and be very disciplined if you change from debit card to credit card purchasing for all of your bills each month.
- Don’t spend more than you can pay for in a single month. You must pay your credit card balance each month to get the financial benefit. If you are paying interest, then you are paying for miles and points which won’t make sense for the end game!
- You never want to pay more for miles and points than you would if you just purchased the tickets or hotel stay with cash (or a travel credit card!).
- If you are savvy about your credit score, I’m sure you are wondering if holding several credit cards will hurt your score. From my experience, the answer is no. I have been playing the miles and points game with credit cards for years and I have a credit score in the 800’s. Your score is made up of a variety of factors, and as long as you pay off your card each month, your score should stay in tact (or maybe even improve).
- Another initial question you may have is regarding annual fees for credit cards. I always evaluate each card to determine if the benefits outweigh the fee. My Alaska Airlines card, for example, has a $95 annual fee. The card offers a free checked bag for all on your itinerary and a companion fare that you can use annually. When we travel as a family of 4, the card waives the $30 bag fee each, which totals a $240 value for each trip. We also use the companion fare each year which has saved us up to $1,000 per person for a higher cost flight.
Let’s start at the beginning. What are miles and points? I look at them as a type of currency. You earn them every time you take a trip or make a purchase on a rewards credit card, and you can later use them for free or discounted travel.
- Using airline miles for airline tickets: If you have Alaska or Southwest miles for example, you can use those miles for flights including their various partners.
- Using hotel points for hotel stays: Likewise, if you have Hilton or Marriott points, you can use those earnings for free nights at all of the brands that fall under their umbrellas.
Once your master the basics, you can use more complicated strategies to get even more out of your points and miles. For example, many credit card programs allow you to transfer your points to their partners and then redeem them for award flights or hotel stays (transferrable points or miles). Another basic element to understand is that points and miles are all worth a certain amount of money since you can use them in exchange for travel. They’re not all created equal, though, and vary from program to program.
- Next step is determining where you want to go and how many people will be going with you. This will guide you on the types of credit cards you want to apply for.
- Sign up for award programs with major airlines and hotels. You will want your membership numbers handy when you apply for the credit cards. Sign up your partner or spouse, too, as they will be part of the plan to get you as many miles and points as possible to use on your next vacation. For airlines, I recommend Alaska, Delta, American, United, Southwest, and JetBlue. For Hotels, I recommend Hilton, Marriott, and Hyatt.
So, how do you know which cards to apply for? Here’s a quick run down:
- Chase is a popular credit card issuer and offers several cards that are also great for beginners. Notable partners include: Marriott, Hyatt, United, Southwest and British Airways. It’s important to note that Chase has a 5/24 (no more than 5 cards can be open in 24 months) rule, which we will discuss at a later time.
- American Express is also very popular for travel cards and partners include: Marriott, Delta, and JetBlue. It’s also important to note that American Express has a “once in a lifetime” policy for welcome bonuses.
- Capital One advertises itself as a travel card – ‘what’s in your wallet?” We’ve all likely heard the ads. Miles earned can be transferred to a variety of airlines and used for award travel.
- Bank of America is also a great choice and they have a travel card similar to a Capital One card that allows transfer to airlines. A notable partner is Alaska Airlines.
- Barclays is also another option and partners with Hawaiian Airlines.
The end game is to gather up as many miles and points as possible when opening up a credit card. This means that we are looking for the best welcome bonus offer with the most reasonable purchase requirements. For example, upon approval of the Hilton Honors American Express card, a current offer earns 80,000 Points after you spend $1,000 in purchases (pay your utilities, cell phone bill, cable, groceries, insurance, etc. using the card) during the first 3 months of card membership. If you and your spouse or partner are both approved for cards, as an example, you could book a premium ocean view room for two nights on Waikiki Beach for FREE just based on the welcome offer. Following the welcome offer, you continue to earn Hilton Honors points with each purchase you make.
Some hotel credit cards offer annual free night for keeping your card and other spend-based offers, bonuses, and perks. Keep in mind that welcome bonuses can take up to 12 weeks to post to your award account. Timing of when miles and points are available is key in planning your vacation.
So, when you are planning for your vacation, and which cards to get, how do you determine which airline and which hotels to stay at? I’m big into researching all options when it comes to how to get there and where to stay. Run some scenarios. Plug in your dates online with airlines and hotel sites. Select flexible dates if you can to see what the cheapest days are for miles or points travel. Don’t be afraid to try one way travel, too. And even different airlines for each leg. On my last vacation, my husband and I flew Alaska Airlines using funds from cancelled travel in 2020 and flew Delta Airlines home using miles. After this research, you should have a good idea on what airline(s) and hotel(s) are your favorites.
Next step is to apply for credit cards. In order to keep up-to-date information on one page, you can click on this link to review current card offers that I feel are worth while from welcome bonus offers (offer + amount of spend required) and value if annual fees are charged to name a few. In addition, I have noted benefits of certain hotel chains here.
I’ll be posting tips and new offers regularly on this site and through my social media channels. Be sure to follow along! Here’s to amazing vacations!
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