As the warmer weather approaches, you may be daydreaming about your next vacation. But if you’re like many families, the thought of actually paying for that vacation can be a bit daunting. The good news is that there are a number of ways to use travel rewards and points from your credit cards to pay for a portion of your vacation, if not most of it! By using the right combination of rewards programs, you can significantly offset the cost of your trip. Here are some of the best ways to pay for a vacation using travel rewards and points from your credit cards. By following these tips, you can make your dream vacation a reality – without breaking the bank!
Now, I know what you're thinking – using credit card points to travel is too complicated and not worth the hassle. But trust me, once you get the hang of it, it's actually really simple and can save you a ton of money.
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WHAT ARE CREDIT CARD POINTS AND TRAVEL REWARDS?
Once you understand the basic principles of using a credit card, and you’ve developed healthy habits to avoid credit card debt, you can start looking into credit card options that REWARD you for your purchases. In the past, we’ve shared five credit cards with benefits like grocery rewards and cash back. Today we will focus on travel-based credit card and reward programs.
There are a ton of different ways to pay for a vacation using rewards and points from credit cards. You can use them to get discounts on airfare, hotels, rental cars, and more. You can even use them to book an entire vacation package for free. However, not all rewards and points programs are created equal. Some are more valuable than others, and some have more restrictions. In this article, we'll give you a quick rundown of everything you need to know about using rewards and points to pay for vacation expenses.
A credit card company will incentivize you to pay for purchases using their credit card by offering “points” or “miles” in return for your purchases. These points or miles can then be exchanged for cash back, or given a dollar value that can be allocated to flight costs or hotel stays.
The more you spend on the credit card, the more “points” you earn to redeem for travel expenses. We are NOT advocating for you to spend any more money with your credit card than you normally would! We only want to make purchases with our credit card that we are already planning on making, and paying off the credit card balance each billing cycle to avoid any interest payments or debt.
HOW CAN YOU USE THESE REWARDS POINTS TO PAY FOR YOUR VACATION?
First, you'll need to sign up for a rewards credit card. There are airline credit cards like United Explorer Card, hotel credit cards like Marriott Bonvoy Boundless Credit Card, and general credit cards like Chase Sapphire or American Express Platinum. Many even offer sign-up bonuses. (Again, we are NOT spending more than we normally would just to accumulate points! These are to use on our normal, budgeted purchases instead of cash or a debit card.)
Each type of credit card operates similarly, but offers slightly different perks and rewards. Each type allows you to earn points or miles when you make purchases, which will be redeemable for cash back, air fares, and hotel stays.
Airline credit cards reward you for brand loyalty, and offer bonus miles when the credit card is used to purchase tickets on their airline. So if you are already a frequent traveler, this would be a good option.
Hotel credit cards come with perks like free nights and special discounted rates. You can also usually redeem points for room upgrades, and get that fancy corner suite that you otherwise wouldn’t splurge on!
Throughout the year, your regular grocery, gas and other payments on these credit cards will accumulate points. When you are ready to plan your vacation, many credit card companies will allow you to have the cash-value of your points deposited directly into your bank account or create a credit for your with the associated airline or hotel. Other credit card companies host their own online shopping portal for you to book your travel directly through them with your travel rewards.
WHAT ARE SOME RECOMMENDED TRAVEL CREDIT CARDS?
A website like NerdWallet can also show you credit card comparisons so that you can find the best fit for your financial needs. This will depend on how often you already fly, what your travel preferences are as far as hotel vs. staying with family, and what perks are important to you as far as airport lounge access, seat upgrades, etc.
Here are some credit card options with great travel rewards to consider:
Chase Sapphire Reserve offers a significant sign-up bonus and fantastic perks, but requires applicants to have excellent credit.
Bank of America Travel Rewards credit card has NO ANNUAL FEE! It offers $250 towards travel expenses after you spend $1,000 within 90 days of opening.
Capital One Venture Rewards credit card is great for those that don’t need the luxury upgrade perks. It’s miles never expire and allows you to earn miles on every purchase with no limits.
Delta SkyMiles Gold American Express is perfect for those of you that already fly semi-frequently and can use brand loyalty to build miles for future trips.
A travel rewards credit card has many benefits, beyond just cost savings on trips. They are also typically waive foreign transaction fees, and some even have built-in travel insurance in case things don’t go according to plan!
If your family prioritizes travel in their budget, it is a smart idea to find a credit card that can earn you money without any extra work on your end. Finding opportunities to take advantage of rewards on flights and hotel stays is a smart and savvy way to keep vacations within your budget!
We have SO MUCH CONTENT on traveling on the cheap, and more affordable vacation hacks. (It's kind of our thing!)
- How to Save Money on Flights: 12 Incredible Tips! – Fun Cheap or Free
- Travel Expenses and How to Avoid Them – Fun Cheap or Free
- 4 Secrets to Affordable Travel! – Fun Cheap or Free
Have you had any experiences with paying for trips using these types of rewards, miles or points? Share them with us! Happy traveling, Freebs!