Conquering Travel Through Reward Credit Cards

Airfare and lodging are almost always the two largest expenses when traveling and can often force you take a shorter trip then you would like or abandon your travel dreams altogether.  It doesn’t have to be through.  Airfare and hotel stays have the biggest opportunities for the savvy travelers to reduce or nearly eliminate the expense altogether.  The easiest way to do that is take advantage of loyalty programs.

You may wonder “Hey loyalty programs are for frequent travelers only.”  Not true.  In fact, the majority of reward points are no longer accumulated through past purchases with that company.  The best way to accrue rewards points is through normal everyday purchases using credit cards.

However, not all credit cards are created equal.  Some points are more valuable than others.  Each company sets their own value to redeem points.  It may cost you 5,000 points to redeem one free night at a Starwood Hotel Property that is equivalent to $100.  At a Hilton property it may cost you 10,000 points for that same equivalent.  Also keep in mind that some credit cards have annual fees, some do not.  Some have bonus categories and some do not.  Some reward programs are more flexible than others.  The goal is to create the best ROI (return on investment.) You want to spend the least amount of money on fees to get the maximum number of reward points.  You also want to be able to be as flexible as possible with those rewards so you can move them around to where you need them to redeem for the travel you want. 

A word of warning before we begin.  In order to take advantage of these reward programs you need to have good credit.  If your credit score is not above 700, work on getting it above this threshold or you will be denied many of the best cards. Now, let’s get started on lowering your travel costs by explaining how to get travel rewards through credit cards.     

How To Earn Credit Card Reward Points

There are two ways to earn reward points through credit cards.  Purchasing and through bonuses.  The first is obvious.  You earn reward points through every purchase you make.  As a baseline you earn one point per dollar spent.  Many credit cards will place certain category’s with a bonus. For instance, gas will earn you two points per dollar or dining will earn you three points.

The second way is through bonus offers.  To entice new customers, credit card companies will offer a one time sign up bonus.  Think of those pro athletes that get a signing bonus for a new contract.  It’s the same type of deal.  Once you sign up and meet a minimum spend requirement, you will receive a large chunk of reward points.  In some cases you can receive upwards of 50,000 or more rewards points.  When the Chase Sapphire Reserve card was first released, they were offering 100,000 bonus points as a sign up bonus.  What does that equate to?  Well a round trip coach ticket to Europe is 60,000 points.  As you can see through a sign up bonus alone you can earn huge chunks of points.

How Does a Sign Up Bonus Work?

When you see an offer you like use the link to fill out the application.  Assuming you are approved, you get a new card within a week or so.  The clock begins ticking the day you sign up.  Let’s say you signed up for a card and will receive 50,000 reward points after you spend $3,000 in three months.  From the day you signed up you have 90 days to spend $3,000 dollars on that card.  Balance transfers do not count.  They have to be new purchases.  Once you meet the minimum spend requirement, the reward points are deposited into your account.  If you do not meet the minimum spend requirement you forfeit the bonus.

Ways To Meet Minimum Spend Requirements

The goal is to obviously meet the minimum spend requirement through the normal course of everyday spending.  Sometimes the minimum spend requirements can be quite high.  Here are some ways to help meet those minimum spend requirements.

  • Make all new purchases using this one card.
  • Transfer monthly auto pay bills to the new card, such as phone and utilities.
  • Instead of making monthly payments on certain expenses such as car insurance, pay in bulk every six months.  You often lower your monthly rate by paying it once every six months.
  • Buy gift cards you will use eventually anyway such as Amazon and keep them until after you hit your minimum spend.
  • Hold off on large purchases until you have a new card to use. if possible, group together several expenses in a a smaller window. 

Binge and Purge Spending

Highlighting the last two points about grouping together larger expenses may not always be possible, but is a good strategy for those having trouble meeting a minimum spend requirement.  With some of the premium credit cards you will have a minimum spend requirement of $5,000 in three months.  That can be difficult to reach for many, but with a little planning it is possible. 

You may feel it is time to buy some new furniture for you living room.  It’s not a necessity, but the time is right.  If you hold off until you have a new credit card you can use it to meet the minimum spend requirement for purchasing something you were going to do anyway.

The other way is to group together several expenses into a small time frame.  Pay your car insurance off once every six months.  Perhaps you can arrange to have that car insurance payment due within the same time frame as your car registration, or some other yearly payment like taxes. 

After setting up some pre-planned binge spending, what do you do when not trying to meet a minimum spend requirement?  You reduce your spending to necessities only.  If your car insurance was $100 a month and you went to a once every six month spending program, remember to save that $100 a month for five months, knowing you will have a $600 payment coming up.  The key to binge and purge spending is learning to control spending.  There are many app’s out there like Mint, that will track your spending and help you stay on budget so that your bank account can handle a sudden binge of pre-planned spending.    

Shopping Portals

One way to rack up points fast is doing your online shopping through shopping portals.  Many of the credit cards you own have a shopping portion of their website.  You may get some email offers from time to time as well, encouraging you to shop through them.  They are easy to use and can grow point totals quickly.

Chase Ultimate Rewards Shopping Portal

Before making an online purchase log into the website of your various credit cards and look for a shopping section.  Chase’s portal for example is under earn points.  You will see a list of online stores.  If you see a way to get the product you want through the online store, click on the store and you will be directed to the companies website where you will complete the sale as normal.  As a reward for going through the portal you will earn bonus points.  For example, make an extra 8 points per dollar spent through the Nike store, simply for going through the portal.  The is on top of your normal credit card accrual.

 

For more information on travel rewards cards see our complete guide on Conquering Travel Reward Credit Cards



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