At the end of our trip in Bali, we will be staying at the Grand Hyatt in Nusa Dua, a renowned area known for its 5 star resorts. ‘How on earth can you afford that on a backpacker’s budget,’ you ask? A Travel Rewards Credit Card. Yes, we will be staying in this hotel free of charge to us just because we spent money on our credit card.
Unfortunately for us, we were both introduced to the world of Travel Rewards Credit Cards pretty late in the game and we are really kicking ourselves now. Fortunately for you, we are going to share this information so that you too can enjoy free flights, hotel stays and cheaper travel.
Discovering Travel Rewards Cards
After graduating college a few years ago, I had an interest in traveling and noticed that Bank of America offers a travel rewards card. I quickly made the switch from a cash back card to a travel card without really knowing much about how it worked or what I could get with it. This was the first credit card I ever owned and the only reason I got it was because as a broke college student with no income, they were one of the only banks willing to give one to me. Turns out, the card hasn’t really given me too much in return, but it introduced me to the world of Travel Rewards Credit Cards.
The next travel card I applied for was Chase’s Southwest Rapid Rewards Premier Card because the company that I worked with flew Southwest often which meant that I could gain extra points when they would occasionally fly me places. In hindsight, I should have gotten a Jetblue card because I fly this airline to visit my parents more often than my company flew me out of Boston.
Finally, a few months before our trip, Josh really got into doing his research on the best Travel Card and we decided to get a Chase Sapphire Preferred Card, which has the reputation of being one of the best cards because of its flexibility when redeeming points with a number of airlines and hotel groups.
How Our Cards are Helping Us Now:
As I mentioned, we’ll be staying at a 5-star resort in one of the world’s top vacation destinations and we’re able to do this solely because of the points we’ve earned with our Chase Sapphire Preferred Card. In the past 9 months, we have earned 80,000 points with the sign on bonus and usage of the card (we have been unable to use it in Asia for a majority of the time and probably could have a lot more points if we were in places that accept cards).
My Southwest card has around 100,000 points on it which can get us anywhere from 2-5 flights EACH for free. We will be using these when we get back to the U.S.
What can a travel rewards credit card get me?
Free flights, free hotel rooms, status upgrades with airlines or hotels and much more. The rewards vary with each type of card and with the amount of cards on the market these days, the opportunities are endless. It’s really just a matter of deciding what type of card fits what you are looking for and your lifestyle.
What Travel Card is Right for Me?
There are a lot of factors that impact what type of credit card you can get in the first place, such as credit. I’m no financial advisor, so I will not be making recommendations based on that; however, all factors aside, here are some things to consider when deciding which card is right for you:
Types of Cards
Hotel Cards – i.e. Marriott Rewards: These cards usually get you free nights and status upgrades (you get perks like an upgraded room or free welcome gifts) with the hotel and its affiliates
Airline Cards –i.e. Southwest and Jetblue: Points with these cards can be redeemed for plane tickets
General Cards – i.e. Chase Sapphire Preferred: These cards provide the freedom of spending your points on anything related to travel.
** Points can be redeemed for more than just what is mentioned. Make sure to do your research**
Things to Consider when Choosing a Travel Rewards Credit Card:
- Are you going on any big trips soon?
- It may be wise to get a general card which will get you double points on all travel rather than being married to a specific hotel or airline group
- What do you want the points for?
- Is it plane tickets you’re after, free nights at a hotel or the flexibility to choose between the two?
- Are you loyal to one particular hotel chain or airline?
- If so, you may be able to earn points quickly if you sign up for a credit card affiliated with that brand
- Keep in mind that most hotels are owned by hotel groups meaning that various hotels may have affiliations with each other: for example, the Marriott and Ritz Carlton are under the same company. If you have a Marriott Rewards card, you may also be able to reap those benefits at the Ritz.
- Is there an annual fee and how much is it?
- A lot of these high rewards earning credit cards have annual fees, and sometimes they are waved the first year. Make sure it’s something you can commit to paying every year because signing up for credit cards and then cancelling them can negatively impact your credit score.
- Can you feasibly hit the sign on bonus requirements?
- This is important. Most cards offer some sort of sign on bonus. Make sure you can feasibly spend the required amount of money in the allotted time, or you will lose out on the bonus points and that’s a huge waste of a credit card.
How fast can I Rack up Points…Responsibly
Of course, you could just get a few credit cards, spend a ton of money you don’t have and get a ton of points for a free vacation, but obviously that is the irresponsible way to go about this and that’s by no means what we are recommending! We earn points quickly by replacing the use of our debit card or cash with our credit card whenever possible. Yes, this racks up quite a large monthly bill, but we never spend more than we can pay off at the end of the month and we look at our credit cards merely as a payment tool rather than as a loan for money we otherwise would not have access to. We always pay in full to avoid carrying over a balance and paying interest.
If you’re interested in putting a majority of your expenses on your credit card and this is something you’ve never done before, ensure that your credit limit is high enough to support it. Never max out your credit card and make sure you’re utilizing less than 30% of your total credit limit. So for example, if you incur $1,000 of monthly expenses that you would like to put on your card, ensure that you have a credit limit of a little over $3,000. This is the best way to keep a healthy credit score.
Think about the amount you spend each month on gas, groceries, drinks, eating at restaurants or whatever else you use cash or a debit card for and then realize that those expenses could be helping you build up a vacation fund.
Again, all cards are very different. Most cards offer something like 1 point per dollar on all purchases and a higher percentage back on purchases with their affiliates or travel related expenses. For example, our Chase Sapphire Card gives us 1 point back per dollar on all purchases and 2 points back on every dollar spent on dining and travel. Additionally, they have an ‘earn points faster’ page on their website that has special deals such as: book with hotels.com and get 5X the points on that purchase.
Sign On and Other Bonuses
Most rewards cards offer a sign on bonus usually in the form of something like: Spend $3,000 in the first 3 months and earn 50,000 points. This is the quickest and easiest way to get a large amount of points and typically the amount offered is enough to get you at least a free night or free plane ticket. In our case, we could afford 6 nights at the Grand Hyatt in Bali with JUST the sign on bonus from our Chase Platinum card. Some cards also offer bonus points on your sign-on anniversary and for things like adding an authorized user or recommending a friend.
Want to Learn More About Travel Rewards Cards?
This is really just the tip of the iceberg. Some people get really crazy with rewards hacks and even open several accounts just to get the sign on bonus points, which is known as card churning. That’s where it starts getting complicated and I can imagine it’s easy to let things spiral out of control when you have so many credit cards to manage at the same time, but there are some people that can handle it apparently.
If we’ve convinced you to start looking into a Travel Rewards Credit Card, here are some resources to get you started. We learned a ton from The Points Guy and we frequently use his blog as a reference when evaluating new cards as well as determining the most lucrative way to redeem our points.
- Consider starting with www.creditkarma.com if you don’t have an account with them already. It’s free credit information and they make recommendations for credit cards that could be beneficial for you.
- Once you’ve done this, start cross checking cards with The Points Guy
- The Points Guy Beginners Guide – Here are some comprehensive steps for getting started as well as a list of all travel rewards card and a ranking of the best cards
Whether you have your dream trip in mind or your just a regular person that needs a damn vacation every once in a while, consider a Travel Rewards Credit Card. It could just be your ticket there…literally.
Did you find this post helpful? Are you motivated to look into travel cards yourself? Do you have any questions for us? Please please please let us know in the comments below or on our facebook page.
Happy Points Hunting,