Free Flights Aren’t Just For The Rich And The Frequent FliersTraveling is expensive. There’s no getting around it in most cases. Flights, hotels, eating out, and excursions add up, and breaking your budget is easy. Meanwhile, you’re glancing through your social media and seeing influencers flying first class every other week. You might think they’re all rich, and they could be, but it’s more likely they’re utilizing credit card points.
I’m not wealthy by any means, but I travel full-time and haven’t paid the entire price of airfare for almost two years. It’s not the most straightforward process, but with a little work and some patience, you could find yourself with a little extra pocket money to spend on your next vacation or, better still, free flights and accommodation.
Here are my top tips for getting started in the world of credit card points.
Don’t be scared of credit cards
Before you make the transition to points master, you have to get over the societal fear of credit cards. From a young age, we’re taught to associate credit cards with debt. Those uninitiated in them maybe have one for emergencies but will advise you to avoid opening too many. In reality, credit cards are one of the most useful tools and can save you thousands if used correctly.
Credit cards aren’t the problem; the temptation to overspend is. You can open twenty credit cards over the course of a year or two and never spend more than you typically do. Treat the card like a debit card. If you can’t afford it, you still can’t afford it. You just need to learn to keep a track of your debts and pay them off regularly.
2. Think about your lifestyle
Research is key. Long before you open up your first travel credit card, you consider your lifestyle. Different cards have different partners and skew heavily toward different kinds of travel, and offer a variety of benefits.
If you never fly but frequent hotels regularly, you shouldn’t grab an airline’s credit card. If you’re saving points for one big international trip, don’t look at cards for airlines that don’t fly there. Even day-to-day purchases make an impact. If you eat out a lot, a day-to-day card with restaurant bonuses would be helpful. Make a list of your priorities.
Set a points goal
If you’re not a super regular traveler, setting a points goal is a good idea to keep you focussed on a strategy. Say, a big European vacation in a year, or a South America trip in the summer.
Do some digging and find out how much it costs to fly, how much it costs in points with different airlines, and then your accommodation costs. Then you can set out, using the advice above, to find the cards that will get you there with the least effort.
Look for welcome bonuses
Opening cards is the single biggest strategy for gaining points, especially if you don’t travel regularly enough. Bonuses are designed to entice customers into opening a card. Typically, they will offer a set amount of points in return for the cardholder spending a set amount of money.
For example, one could offer 50,000 points if the cardholder spends $4000 within the first three months of opening the card. If your typical budget would see you spending that amount, that card could be a good option. It’s very important not to try and spend that amount just to make the bonus. If you spend more than you usually would, you’re losing value.
Some of the biggest bonuses are from cards like Amex. Its Platinum Card, which I use, offers 100,000 points if you spend $6000 in six months. 100,000 points could be worth over $2000 if used to their full potential. That’s a really impressive return on your money. With that said, don’t apply just based on the bonus; there are other factors at play.
Check the yearly fees
Fees are never fun. But when you’re looking at them in the context of opening a credit card, they could do even more harm than you think. Take the previously mentioned Amex Platinum Card. It has one of the highest credit card fees in the industry at almost $700. That’s huge. And if you’re not prepared to milk every dollar you can from the card, you’re losing money, regardless of the 100,000 points.
Before I opened that card, I calculated everything that I could use those points for, as well as the added benefits the card offered me. When I was sure the value I would receive from it was more than the fee, I bit the bullet. If your calculations come up short, it’s a miss on the high-fee cards.
Optimize your points by transferring
When you see points valuations online, they’re usually the maximum you could squeeze out of them. While companies like Capital One and American Express have their own travel portals where you can purchase flights and hotels, the best way to use them is to transfer them to a partner.
Partners vary based on the card you use. For example, Capital One lets your transfer your points to airlines like British Airways, Singapore Airlines, Air France, and a host of others; Amex partners with Delta, JetBlue, British Airways too, and a bunch more. Transferring the points to these airlines gives you more direct value when booking a flight.
If you’re flying to Paris, and you have 60 thousand points. Capital One might charge 100 thousand for a round trip on their portal. British Airways might only charge 50 thousand Avios, so it makes sense to send your points to your British Airways account.
Some won’t be able to transfer, like Airline or hotel-specific cards, so make sure you use those companies enough to enjoy the benefits.
Join loyalty programs
If you’re not at the point where you can pay for trips with points, make sure you’re getting something back from the travel you do pay for. Whichever hotel, airline, or rental company you’re using, join their program before you pay.
You’ll get points for every flight and stay, which will add up over time if you’re a frequent flyer.
Have different cards for different purposes
Different cards have different ways of building points. Some put huge bonuses on travel, while others give you solid extra points for eating out. There are even some super specific ones, like shopping small or paying for gas at certain types of stations.
If you have two or three cards, label each (literally or mentally), as your eating-out card, your grocery card, and your big purchases or travel card. That way, you’re maximizing the number of points you can get from your day-to-day life. Most of us don’t spend enough money to pay for an entire flight in a couple of months, but some smart decisions over the course of a year could pay some big dividends.
Use big purchases effectively
You should never spend money that you wouldn’t normally spend when using a credit card. That’s a surefire way to end up in a lot of debt. But once in a while, we all have some big purchases. Maybe your laptop needs an upgrade or you’ve had sudden home repairs that cost a few thousand dollars.
Before you pay cash or use another card, check for some effective bonuses that might cost the same. My girlfriend has a pricey laser treatment on her eyes coming up. Instead of throwing it on her usual card or paying with a debit card, I had her open a new card with 75,000 point bonus. She was going to pay for it regardless, so why not get some free flights from it?
Quickfire Do’s and Don’ts
- Do use a credit card for everything
- Don’t buy things you wouldn’t normally buy
- Do pay your balances off
- Don’t forget to check the fees
- Do check for bonuses
- Don’t use cards for companies you don’t use
- Do transfer your points
