A lot of people ask me how I’m able to afford my frequent travels. My usual response is credit cards. Now before you start imagining piles of past-due bills and debt collectors knocking on your door, let me show you how you can use credit cards for cheap and even free travel.
DISCLAIMER: Treat your credit card as if it’s a debit card. Only spend what you can afford to pay off each month; ALWAYS pay your bill in full. If you are uncomfortable using credit cards, currently have credit card debt, or struggle to pay off your debts, this article is not for you.
How to Make Credit Cards Work For You
Think of credit cards like a debit card with amazing rewards. When you spend money, you earn points or miles that can be redeemed for free flights, hotel stays, or cash back. Most travel credit cards also have the added benefits of no foreign transaction fees so you can save money while using your card abroad. Simply follow these steps to learn how to travel cheap and free with credit cards:
1. Choose your Credit Card
First you must choose what type of rewards you desire. If you’re looking for free flights, choose a card that earns miles with your favorite airline. Interested in free rooms, pick your a card with a hotel chain you frequent. If you can’t decide, choose a generic travel rewards card where points can be redeemed for a variety of travel expenses or cash back. Below I break down the general rewards offered by each type of card:
Airline cards typically offer:
• sign-on bonus worth a free round trip flight or more
• free checked bags
• elevated frequent flier status
• no foreign transaction fees
Hotel cards typically offer:
• sign-on bonus worth several free nights
• elevated reward tier status
• no foreign transaction fees
General travel cards typically offer:
• sign-on bonus worth hundreds of dollars in reward points
• flexibility to use your reward points for many types of travel or statement credits
• no foreign transaction fees
2. Earn Your Sign-On Bonus
Once you’ve received and activated your credit card, your next step is earning the sign-on bonus points. This is the most important step! The lucrative bonus is worth tens of thousands of points or miles.
To put it simply, the card will offer XX,000 points for signing up and spending $X,000 in the first 90 days. Be sure you can afford to spend the required amount in the first 90 days to earn this important bonus. You can reach this threshold in various ways. I tend to charge everything I can to my credit card during this period. Wait until you’ve received your new card to make big purchases. I like to charge my car insurance payments, health insurance premiums, rent, bills, etc. If you’re having trouble meeting that threshold, try buying gift cards to the grocery store or a store that sells basic necessities since you will spend money at these stores eventually, anyway.
3. Pay Off Your Credit Card
I can’t stress this enough. Pay off your credit card in full each month. This helps you maintain a good credit score.
4. Plan Your Travel and Use Your Rewards
Once you’ve earned your sign-on bonus, now you have enough points to start using your rewards.
5. Cancel Your Card
Almost all travel cards have annual fees. Fortunately, most cards waive the annual fee for your first year. I typically open a card, earn the sign-on bonus, and set a reminder on my phone to cancel the card in 11 months. Some people might say opening and closing accounts hurts your credit score but in my experience, you might lose a few points on your FICO score only to have it bounce back the next month. As long as you’re paying off your balance in full each month, your credit score shouldn’t suffer.
Having earned the sign-on bonus from over a dozen different cards, I’ve been able to travel for free to Alaska, Germany, South Africa and all over the continental U.S. I’ve also had many free stays at Hilton and IHG hotel chains.
The current travel card I am using is the Chase Sapphire Preferred card. The card granted me 50,000 points after I spent $4,000 in the first 90 days. Now, this was a difficult task as I don’t normally spend that much money in three months. So I booked a flight to South Africa on the card, hiked to the second tallest waterfall in the world, spent a decent amount of money on that trip, all while enjoying the benefit of no foreign transaction fees—a benefit of most travel cards. Back home I used the card to pay my medical insurance premiums as well as my car insurance. Having successfully spent $4,000 in 90 days, I earned the 50,000 bonus points as well as 1 point for every dollar spent on the card (2 for travel related expenditures). In total I ended up with over 60,000 points. The way the rewards work on this card, I can now redeem these points for cash back (60,000 points = $600 cash back) or book future travel through Chase’s own travel portal (60,000 points = $750 worth of travel).
Another card I currently enjoy is the American Airlines Aviator Red World Elite card. With this card, there is no required spending to earn the sign-on bonus. To earn 50,000 miles, I simply had to make one purchase with the card and pay the $95 annual fee. So for $95 plus the cost of coffee, I earned 50,000 American Airlines miles—enough for at least a one-way flight anywhere in the world. This is one of the best deals I have seen.
Travel Cards I Recommend
Here are a few of the credit cards I have used and recommend.
Disclaimer: I am affiliated with some of these links below and may receive compensation. I have used the products below and recommend them regardless of any affiliations.
• Hilton Honors: 50,000 points after spending $1,000; no annual fee
• IHG Rewards Club Select: 60,000 points after spending $1,000; 1st annual fee waived
• Marriott Rewards Premier: 75,000 points after spending $3,000; 1st annual fee waived
• AAdvantage Aviator Red World Elite: 50,000 mile after first purchase; $95 annual fee
• Gold Delta Skymiles: 30,000 miles after spending $1,000; 1st annual fee waived
• Southwest Rapid Rewards Plus: 50,000 miles after spending $2,000; $69 annual fee
• United Mileage Plus Explorer: 50,000 miles after spending $3,000; 1st annual fee waived
Travel Reward Cards
• Chase Sapphire Preferred: 50,000 points after spending $4,000; 1st annual fee waived
• Barclaycard Arrival Plus: 40,000 points after spending $3,000; 1st annual fee waived
• VentureOne from Capital One: 20,000 points after spending $1,000; no annual fee
Cash Back Cards