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We all know that credit card for rewards – in the form of cash back, miles, or points – are an excellent way to get something back for the things you buy anyway. For many, these credit card rewards can add up quickly over the months, leaving you with a modest balance of rewards that you need to utilize. What better way to use them than to meet your travel goals?
No matter which travel credit card you carry or how your rewards are earned, they can be cashed in, converted, or directly spent on travel-related expenses. Airline points, hotel stays, and even car rentals are fair game for credit card rewards. Plus, many credit cards allow you to simply cash in your rewards for a statement credit, essentially canceling out the payment for that Caribbean cruise or Airnb stay.
When you start planning how to earn as many points as possible, and then redeem them for your desired travel, things can get a bit confusing. How much do I have to spend? What are the loyalty program’s rules? How much can I get by converting these miles to my favorite airline?
Luckily, there are ways to really optimize this travel rewards booking process, getting as much bang for your buck as possible. It just takes a little bit of planning ahead, and even setting goals ahead of time.
Here is how you can combine your travel goals with your credit card rewards, in order to make the most of both in 2018.
Pick Your Rewards
Deciding what you want to do, and what you need to earn, is the first step.
Do you dream of a free round-trip flight to Paris with your sweetheart? A first-class seat to NYC over the holidays? Your first step is to look at the airlines that fly your airport of choice. Then, see if those airlines have co-branded cards that will allow you to easily earn miles.
You may already have a travel credit card that earns points or miles, so that’s always an option. Be sure to see what the point conversion and rewards-earning rates are. That way, you know whether you’re getting the most for your money.
Depending on how you spend throughout the year, you may wind up getting more with a general cash back credit card that allows you to redeem earnings in the form of a statement credit. A product like the Blue Cash Preferred® Card from American Express will net you 6% on groceries, 3% on gas, and 1% on everything else. If you spend a lot at the grocery store, earning cash back with this card only makes sense – you’ll have a hard time getting anywhere near 6% back with any other product.
It often makes sense to utilize a few different credit cards for rewards. Let’s say that you have three rewards credit cards in your wallet. One card offers 6% on grocery stores, one gives 3% on dining (like the Chase Sapphire Reserve), and another earns 2% on all other spending. It only makes sense to use all three depending on your spending, in order to maximize your earned rewards.
You should also pay close attention to point conversion rates, which could amplify your rewards even further. For instance, when you redeem your points through the Chase Ultimate Rewards portal, you’ll get 1.5 cents per point for travel. This is a 50% bump from some other rewards programs! Certain programs will convert better for your preferred companies than others.
For instance, you may get 40% more points by flying on a specific airline compared with others.
Take Advantage of Credit Card Offers
If you are considering a new credit card for rewards, look for one offering a sign-up bonus. That way, you’ll receive a large chunk of points/miles/cash back off the bat, just for being a new customer.
These bonuses typically require the cardholder to spend a specific amount of money in a set time frame (i.e.: earn a $200 bonus after spending $1,000 on the card in the first three months). As long as you meet that minimum, though, that’s extra cash or rewards in your pocket for buying things that you would likely buy anyway.
For example, you can earn 50,000 Ultimate Rewards points when applying for the Chase Sapphire Preferred and spending $4,000 in the first 3 months of card membership. The premium Sapphire Reserve also comes with a bonus of 50,000 points.
Occasionally, you can even find bonus offers for adding authorized users to the count. By simply putting a willing friend, family member, or your significant other on the account (even if you don’t plan to get them a physical card), you can snag yourself even more.
Lastly, if you think that you probably won’t be able to completely cover your travel with earned rewards, you can take advantage of introductory APR offers to prepay for the things that you know you’ll need. If you’re taking the family to Disney, you could buy your park tickets in advance with a 0% APR offer. Then, pay them off throughout the year without any interest. Plus, that purchase will then earn you extra cash back or points if you use your rewards card… a double win.
Utilize Card Card for Rewards Benefits
In addition to rewards, some rewards credit cards also come with travel-friendly benefits that don’t have to be earned. It’s smart to take advantage of these when you can, to squeeze out every free penny for your travels.
Two cards from Amex, for example – the Platinum Card from American Express and the Premier Rewards Gold Card from American Express – offer cardholders an annual airline credit. These cards offer $200 and $100, respectively, covering things like baggage fees and drinks/food on the plane.
Other cards, like the Chase Sapphire Reserve or the Citi Prestige, offer annual credits that are a bit more flexible. The Chase Sapphire Reserve offers an annual $300 travel credit, for instance. This can go towards airfare, hotel stays, and even taxi rides or tolls — anything deemed a “travel” expense. With the Citi Prestige, you’ll get $250 in travel credit each year, which can also be used towards airfare, hotels, and the like. If you were to carry both cards, you would get a total of $550 a year in free credits alone, which could be combined to cover a number of your travel expenses.
Other cards offer benefits covering things like Global Entry applications (the Citi/AAdvantage Executive World Elite Mastercard, for one) or free checked bags (with the American Express Gold, Platinum, or Reserve cards, among others). Mix and match the use of your credit cards where you can. That way, you can truly maximize all of the free benefits available to you!
If you’re trying to optimize your credit card rewards for exciting travel this year, there are ways to get more bang for your buck. However, you may need to be a bit flexible, in addition to planning ahead with your spending.
Let’s take using points for airfare or hotels, for instance. With these, your rewards may go much further if you schedule travel a week or two in either direction. Be sure to check dates in your redemption portal to see when your points will go further.
You’ll also need to be flexible and intentional in your spending. This means planning which rewards credit card to use when grocery shopping and which card to pull out at the pump. Some credit cards for rewards will earn you more for paying your monthly bills, and the like.
Pre-planning your travel for the year will help you to optimize your credit card rewards and benefits. That way, you can cut your expenses down substantially, or even make entire adventures happen without anything out of pocket.
This might mean signing up for new credit cards to take advantage of introductory rewards. Or, you might use different credit cards to pay for different aspects of your trip. Many travel credit cards offer free travel benefits each year, and it’s smart to take advantage of these whenever you can. With a little bit of planning and intentional earning, you can make your 2018 travel goals happen without draining your bank account.
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Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airlines or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities.