Are you planning a vacation with your family or partner? Unfortunately, vacations can be very expensive, especially when you factor in your kiddies! Thankfully, you can dramatically minimize the expenses by taking advantage of credit card rewards.
Credit card rewards will cover most of your expenses if you know how to maximize your points throughout the year. That being said, you need to obtain at least one travel rewards card. Earning free travel with rewards credit cards is legitimate, ethical, and profitable for all of the parties involved.
The Six Smart Strategies — Credit Card Rewards
You want to take a vacation, but your bank account statement states otherwise. It may take months and years to save up money and change the amount on your bank account statement. However, you do not have to wait because now, you can use credit card rewards that you have earned through the years. Here are six smart strategies on how to use credit card rewards to go on a vacation:
Increase Your Sign Up Bonuses
When you sign up for a credit card, you earn a sign up bonus. For instance, you may receive 30,000 points. Tell your partner to sign up for the credit card so they too can receive 30,000 points, bringing your total to 60,000 points.
Before you sign up for a credit card that offers travel rewards, look at how many points you will receive upon signing up and sign up on that basis, as there are some credit cards that give you around 50,000 points. Now, that is 100,000 points collectively.
Yes, it may take time for both of you to earn rewards on your respective credit cards, but with 100,000 points, you can reward your family with a four round trip to anyplace in the United States. With these points, you can easily book hotels around the country. Earn more points to travel outside of the United States.
Obtain Flexible Travel Credit
You need to pursue flexible travel credit. Flexible travel credit is a type of reward program that allows you to book a date to travel without worrying about finding reward seats on the plane or the hotel blacking out their reward availability.
Go ahead and book a flight and hotel during the busiest months to go on a vacation without worrying about blackout dates and capacity controls. Flexible travel credit will also allow you to compare different deals on the market and select the best one.
Credit cards that offer flexible travel credit will allow you to redeem your points on travel purchases at a percentage of one cent for each point, thus allowing you to compare prices, book the cheapest offer, and save your remaining points for another vacation.
If you want to book a lodging on campgrounds or rent a two-bedroom apartment with a kitchen through AirBnB, you can use your reward points to do that. Look for credit cards that do not only offer huge sign-up bonuses, but also a flexible travel credit program.
Opt for a Family-friendly Credit Card Reward
Whether you have kids or not, you should still opt for a family-friendly credit card reward. For couples with no kids, you may choose to have them, if not now, then later. A Family-friendly credit card reward offers free meals or bookings to children.
For instance, some airlines allow families to check in two bags free of cost or reschedule or rebook their flight without charging a penalty fee. Other airlines allow passengers to use their points to book flights by not restricting the number of reward seats you can book regardless of the route of the plane. In terms of a hotel, hotels may allow children to eat and stay for free.
For information about the best family-friendly credit cards check out Family-Friendly Rewards Programs | Frugal Travel Guy
Use Your Miles Wisely
Flexible travel points can reduce your expenses considerably, but you need to develop a strategy on how you plan to use your miles. This is especially true for couples with children, as their expenses tend to be higher.
You need to gain more information about different airline programs in effect and the destinations they will take you. Most importantly, you need to need to choose an airline program based on the number of miles it will take you to travel to a certain destination, selecting a program that allows you to travel for the least number of miles.
Regardless where you are planning to travel — in or outside of the country — you need to compare the different airline program to ensure you are using the least number of miles. You can put the miles you save up towards other vacations or they can add up to the number of miles you accumulate before you take another vacation
Choose Basic Hotels to Stretch Your Reward Points
The goal should be to save as many reward points as you can so you can use them towards your next trip. One way to save them up is by spending them on five star and luxurious hotels and resorts. Instead, spend your reward points on basic hotels.
Opt for cheaper hotels, not expensive hotels. If you have children, they will appreciate going on another vacation the same year rather than waiting to go another one next year when you have enough reward points saved up. If you want a swimming pool, you can find one in even the most basic hotels these days.
Select a Cost-effective Travel Method
You need to select a cost-effective travel method. You do not want to use several reward points just to go from one point to another point. For instance, traveling to Disney World using your reward points is fine, but remember, you need to pay for the park tickets per person for each day, meaning the entire trip will not be free.
One cost-effective travel method is to go on a cruise. You can use your flexible travel credit to pay for the journey. Children under the age of 11 can get free entry to the cruise on selected cruise journeys. You should book a cruise because your fare includes food, room, and entertainment. You might find some all-inclusive resorts offering the same offer when you use your reward points. By selecting an affordable travel method, you can budget better and avoid unexpected expenses.
Types of Credit Card Rewards
When you use your credit card on purchases, you earn a certain percentage of rewards on every dollar charged to your credit card. Some credit cards reward the user more points if they use their credit card to make certain purchases or areas. Before you can begin using your credit card, learn about the three different categories credit cards fall under — cash, points, and miles.
Cash rewards are the easiest to use, as all you need to do is purchase things on it. One downside to using cash rewards is that you do not always receive cash, but will need to obtain it as a credit to your bank account.
When you choose to redeem your reward, some banks may deposit money into your bank account or deliver a check to you. You can redeem your entire reward, but will need to redeem it in small increments as specified by the bank. Therefore, you need perform research on various credit cards offering cash rewards to make the right choice.
For each dollar you spend using your credit card, you will be awarded points for it. For instance, you will receive one point per dollar you spend. Through the credit card reward program, you can redeem points on merchandise available in the online shopping mall brought to you by the program.
You may be able to redeem your reward points on gift cards, travel, or cash depending on the bank that has issued the credit card. If you redeem your points on gift cards, you will receive more benefits, as retailers who have partnered with your bank will give you 10% to 20% off on the price of the gift card. Other examples of a points reward system is hotel rewards and auto rewards credit cards.
Mile or travel rewards earn you miles. You can redeem those miles for travel, using it to book airline tickets. However, the number of miles you earn differs from program to program. Some banks do give users the option to convert their miles between different program, but doing so, will cost you points.
- Cash rewards reduce your credit card balance.
- Mile rewards earn you free trips.
- Point rewards allow you to purchase items.
Since banks compete, trying to outdo each other, it is important for you to take advantage of this competition by comparing all the different benefits associated with each of their credit card rewards program. Opt for a credit card reward program that gives you maximum benefits or a specific benefit that you need to have, such as some programs allow you to use your rewards to decrease your mortgage.
Other Helpful Tips
Know the difference between tiered rewards and flat rewards. For every dollar you spend using you credit card, you will earn a specific amount of rewards or you may earn few rewards on the first time you use your credit card during the year and more rewards when you reach a specified mark set by the bank. Then there are credit cards that allot you rewards on specific areas or categories you spend money on and few rewards on other purchases.
However, there’s a catch.
To secure the most optimal credit card program, you need to have optimal credit scores. A bad credit score automatically disqualifies you for any type of credit card rewards program. Work on improving it if you want to qualify for a credit card rewards program.
When you apply for a rewards card, the costs you have to pay yearly for it are much higher — around $200 to $300. Even the interest rates are higher. Therefore, it is important for you not to carry any astounding balance on it.
Credit card rewards programs are complicated.
For example, a credit card program states they will give you 5 percent. For your part, look for the asterisk (*) that indicates that you will not qualify to receive that 5 percent reward, until you spend a minimum of $2,000 on your credit card during the year. Other things to look out for include restrictions, minimum redemption amounts, and caps — all factors that make it difficult for you to redeem your credit card rewards.
Banks change policies without alerting you.
Also, know that banks may change their policies regarding their credit card program without informing you of the changes. Therefore, ensure you read the fine print that comes with your monthly bank statement.
Make a point of using your rewards before they expire. If you do not want to worry about your rewards expiring, opt for a credit card rewards program that does not have an expiry date on the rewards they offer. However, most credit card rewards program will charge you a penalty and take away your rewards if you fail to make timely payments on your credit card.
Debt Can Accumulate
Moreover, you should also not always go after bonuses and rewards, as that way you can lead yourself into debt. You are using your credit card to earn the rewards, only to be left with a huge credit card balance that you are unable to pay off quickly.
In short, if you plan to take advantage of credit card rewards programs, you need to ensure you use your credit card wisely. If you can pay the amount in full next month or continue to pay even just a minimum amount, only then use it.
Find the best Travel Credit Cards for 2018
NerdWallet put together a great list of travel credit cards that will save you BIG on your next vacation. There are up to 9 credit cards to choose from ranging from flexible redemption, high-value points, no annual fee, luxury travel perks, hotel cards and more! Check out the list here: Best Travel Credit Cards of 2018