One of the best ways to save money on travel is by using a credit card to earn points and miles for the spending you already do! Its a win-win as long you use the credit cards responsibly. This post shares my basic rules and tips to consider when you’re thinking about signing up for a travel rewards credit card. For more detailed advice, I highly recommend reading the Beginner’s Guide from The Points Guy.
Rule 1: Don’t charge more than you can afford to pay off. No amount of points or miles are going to be worth the interest you’ll pay if you carry a balance on your statement (or the penalty for making a late payment).
Rule 2: Do your homework before you sign up for an offer. There are numerous websites that offer reviews of credit cards with options to compare different offers. These sites are also great resources to help you judge the value of any sign-up bonus offered with the card. Two of my favorite sites for this information are Nerd Wallet and The Points Guy. Please be aware though that these sites may get paid to promote certain products, so their top recommendations may not be the best option for you.
Rule 3: Consider your personal travel goals and preferences. Be sure you’re earning points with a program that you’ll realistically use. For example, don’t sign up for a hotel-branded card, if you rarely ever stay at a that hotel, even if they offer a big sign-up bonus. If you typically fly with a particular airline, consider a co-branded card associated with that airline. If you don’t want to be tied to one brand, consider a card that earns transferable points like the Chase Sapphire Preferred or a card that offers cash-back like the Capital One Venture.
Rule 4: Read the fine print, and beware of the annual fees. Be sure you understand the terms of the offer you’re signing up for, and be sure you’ll get enough value from the card to justify paying the annual fee. Most high-earning points cards have an annual fee, but you can also find good cash-back reward cards with no annual fee. I’m particularly a fan of the Southwest Airlines’ co-branded cards offered through Chase because they offer anniversary points each year that largely offset the annual fee.
Rule 5: Have a plan to meet the spending requirement to earn your sign-up bonus. Every card that offers a lucrative sign-up bonus has a minimum spending requirement that must be met within a certain time frame to obtain the bonus. These requirements vary widely, but if you’re signing up for a bonus offer, be sure you have a plan to meet the minimum spending requirement. Don’t assume you can just buy gift cards either because sometimes they’re excluded in the fine print!
Bottom Line: There’s no downside to letting your everyday spending save you money. In addition to expenses like gas, clothing, and food, you can often pay for things like utilities and insurance by credit card. It’s an easy way to earn more rewards on what you already have to spend. The sooner you start earning points and miles, the sooner you’ll be flying to a new location!
When you’re flying for free on the way to your next vacation or adventure, you’ll thank yourself for the time you put into selecting and signing up for a rewards credit card!