Woman with credit card

Budget Travel: How to use credit card points to your advantage

You may know some of the top travel hacks, but did you know that using credit cards can score you free flights and free rooms? Check out this guide and learn how to use credit card points to budget travel.

There are many ways to budget travel, but two often-overlooked opportunities are credit card points and airline miles. By signing up for certain cards, you can earn free flights, free hotel rooms, and much more simply by applying and using your card to pay bills.

Before we get started, it’s important to know that none of these hacks are guaranteed. Using credit cards is an individual choice. If you’re unsure if using credit cards is the right choice for you and your financial needs, consult with a financial advisor for more information about credit cards and reducing credit card debt. With that disclaimer out of the way, let’s talk strategy.

How to qualify and sign-on bonuses

The first thing you need to understand is how the point system works and that starts with qualifying for the credit cards in question. To qualify for a card, you typically need a 700+ credit score for the top sign-on bonuses. If you’re not there yet, don’t worry. Look for cards that help people build credit, pay off your card each month, and your credit score will start to grow! If you’re struggling to pay down debt, working with a financial advisor is always the best solution when it comes to money matters. Focus on reducing debt, then circle back to credit card hacks.

The second thing you need to look for is the sign-on bonus and the fine print. The sign-on bonus is the reason you’re signing up for the card. These bonuses typically consist of a large sum of points that you get in return for opening the card and complying with the fine print. For most cards, you need to spend $2,000 – $4,000 within three months to get the reward. This may seem like a lot of money, but the trick is using the card for all of your purchases. Put literally everything you can on the card, set up autopay, and you’ll reach that number sooner than you think.

Here are a few ways I use my card(s) to gain points:

  • Rent (if possible — using Plastiq is a good workaround)
  • Auto and insurance payments
  • Utilities: gas, electric, internet, phone, et cetera
  • Streaming services/cable
  • All food purchases (groceries and restaurants)
  • Gas and public transit fees
  • Literally any and everything you buy within the month (Target trips, clothing, a new water heater, et cetera)

After you hit the limit, you’ll collect the sign-on bonus, and you can start planning your budget travel trip. It really is that easy! However, there is one other thing to look for: yearly fees. Some cards have a yearly fee, but there is a workaround. For most cards, even if you don’t use the points, you can drop down to a lower version of the card that’s free to use. For this option, it’s always best to call the card company and verify that your points will remain in your account if you drop to a lower card type.

Selecting the right credit cards(s)

There are a few ways to go about the credit card game for budget travel, but selecting the right card is the first step. Your ultimate goal is to collect a large sign-on bonus. When researching, ask yourself: what is the card offering, and what do I have to do to get that deal?

Another thing to consider is if you’ll want to continue using the card after you receive the bonus. Some cards offer great point options, but it all depends on your wants and needs. For example, Hilton and AMEX partner. There are various other hotel chains that do the same, such as Marriot and Visa. If you enjoy staying in hotels and can find a chain you like, sticking with that card is a great way to accrue free rooms and other extras.

Airlines also partner with credit cards, such as JetBlue with Barclay, Delta with AMEX, Air Alaska with Bank of America, and United with Chase. If there are certain places you know you want to fly to or a certain airline you prefer, getting their card and putting all of your purchases on it is a smart move. Being loyal pays off because it helps you accrue points quicker and more often.

Accruing points

Once you get your card, it’s time to start going after points. While you can put everything on the card and rack up points, there are other ways to maximize your gains. Most cards offer a 1:1 ratio. This means for every dollar you spend, you get one point, but there are quicker ways to gain points. Most cards have monthly offers that focus on:

  • Specific retail establishments
  • Gas brands
  • Restaurants
  • Events

If you pay attention to the offers, you can get up to 10x the points by going to a specific gas station or food chain. That’s free money!

Another way to rack up the points is using multiple cards. If you have a partner or family member that can help you out, get a second card with the same number, so you can both accrue points together. This will double your efforts and literally double your points!

How credit card points work and using them to your advantage

Okay, so you have the card, you have a ton of points, now what? It’s time to travel! You want to get the most bang for your buck, especially when it comes to budget travel, so don’t just start using points without a plan. There are a few things to consider first.

Airline miles

Airline miles/points are a hot ticket item, especially if you want to travel long distances. These points are the key to getting to your dream destination, however, don’t simply use them on any old flight. For example, I was booking flights to Morocco, and the points I had weren’t getting me very far. But when I checked the budget flight prices online, it made way more sense to pay cash and save my points for another destination. I also had the option of opening a different card that would get me a better deal on flights. Always look at the options before spending. You can’t get those points backs!

You also want to save your airline miles for an expensive flight or a flight that is completely covered by your sign-on bonus. Most bonuses will give you enough points for a round-trip flight, so take some time and do the math before picking a card and/or cashing in those points.

Hotel points

Just like airline points/miles, hotel chains offer excellent sign-on bonuses. For some cards, you can get a week’s worth of rooms depending on the location. One thing you have to understand about hotel points is that the amount per room, per night, will vary based on location and season. For the Hilton card, you can get a 20,000 point room in smaller cities, such as Baltimore, MD, and Kansas City, MO. However, cities like NYC will start at 70,000, and resorts in the Maldives can cost 150,000 points per night.

This is where you have to consider your options. If the Maldives or Bora Bora is your dream location, getting a free night or two can be huge when it comes to a week’s budget. But if you are backpacking around Europe or the US, look for brand options that are cheaper. Hilton and Hilton Garden are more points than a Hampton Inn. Use the brands to your advantage and weigh your options before booking.

Loyalty programs

One last thing to consider when talking about points is loyalty programs. These programs combined with corresponding credit cards are a cash cow. For example, you can get a Hilton AMEX card, get the sign-on bonus, and sign up for the Hilton Honors reward program. The more you stay with Hilton and the more you use the card in general, the more perks you get, such as free and upgraded rooms, free water, food and beverage credits, and lower rates. If you can pick a brand, airline or hotel, and stick with it, you have a better chance of capitalizing on the system.

Final Thoughts

Credit card points are revolutionizing the way folks can travel, especially if they’re used in conjunction with multiple cards and point types. However, credit is nothing to mess around with if you’re in debt or struggling to pay bills. If you’re looking for other ways to budget travel, reach out to us at TourHero and let us help you build your dream trip within your budget. We even offer monthly payment options to budget for your trip!

Travel should fill your heart, not empty your wallet! So work with those points and reach out to TourHero for a stellar budget travel experience.

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