Nobody wants to come back from a trip with a big bill.
Hanging in consumer debt after the vacation is over can not only create or exacerbate financial stress when you make monthly payments, but if you drag out the commitment too long, you overpay for financing. However, it makes sense to use the card for travel purchases as well. You can get fantastic rewards, benefits and consumer protection.
This holiday season, treat yourself to no travel bills or low bills, but still get all the benefits of your card. Here’s how.
Rate the lowest price
According to Toronto-based travel expert Jennifer Weatherhead, you can avoid cost overruns on your trip from point A to point B by being flexible with your dates, especially around Thanksgiving and Christmas. Book flights on the day of the holiday or a day or two before and after everyone else travels to avoid overpriced fares.
For example, United’s round trip flight from San Diego to Chicago from December 23rd to 27th costs $737, but if you arrive on the 25th, the price drops to $634. Most airlines have seven-day calendars for easy price comparison.
Staying at a branded hotel? You may have unused Hotel Points that you forgot about. “If you have enough money, you can get one or two nights for free with this loyalty program,” Weatherhead says.
Also, look for deals you can get when purchasing travel-related services before you leave. Maybe you are going on a winter cruise to Holland, America. If so, you will receive a 25% discount if you book a spa visit before the ship leaves the dock. So not only will you be paid in full, you will pay less.
Pay with the right card
Jeremy Scott Foster, a Los Angeles-based travel expert, says travel credit cards are a powerful tool for redeeming all sorts of perks and rewards for holiday excursions.
“Some credit cards offer 3x, 5x or even 10x points on some travel purchases,” says Foster. “So if you pay for your trip with plastic, you can get a significant portion of that cost back in points.”
While cash will help you stay out of debt, you won’t get rewarded with a debit card. You leave money on the table if you don’t use the rewards you can get.
“I recently bought a full-price ticket to see my family for Thanksgiving,” Foster says. “When I bought with my American Express Platinum Card® through the Amex Travel portal, I earned 5 Amex points for every dollar spent on that flight. At a rough estimate of 2 cents per Amex point, this equates to earning 4.5 cents per dollar. And depending on how you use these glasses in the future, they can cost a lot more.”
Use your accumulated rewards
The holidays are the best time to redeem your credit card rewards. If you have a co-branded airline card, such as the American Airlines AAdvantage MileUp℠ card, you can use it to buy a ticket with either American Airlines or transfer miles to more than 20 partner airlines.
If you have a regular travel card such as the Chase Sapphire Preferred Card, you can redeem your rewards through the company’s travel portal, the Ultimate Rewards Portal.
In any case, book early to get the best redemption rate and you won’t have the flight debt that weighs you down.
You can also have a hotel credit card. If so, you can pay for your stay with these accumulated rewards. You can even get a free upgrade to your preferred room and food and drink credits you have at the hotel to cut costs even further.
The key is to take advantage of all the rewards you have accumulated now, which will greatly reduce your overall travel expenses.
Pay the invoice in full in cash before the due date
Written off your travel expenses for points? Ramona Ortega, personal finance expert and founder of My Money My Future, says it will be very important to take the next step: remove the balance immediately and not let it linger.
“Make a plan for how you will pay for your vacation before you even pay,” says Ortega. “If you need to split your expenses over a couple of months, do it, but plan for an extra percentage.”
And never spend with a card to get a reward. The value of cash, points or miles is reduced when you carry over the balance to the next month, as interest is added to them.
“If you have cash, transfer that amount to your credit card as soon as you pay your credit card fare,” says Foster. “So you get all the points, privileges and bonuses that come with paying with a card, without increasing your card balance or having to pay interest on it.”
Open a new card with a big signup bonus
Another strategy to prepay and cut vacation travel costs is a new credit card that offers a big signup bonus.
“It’s not uncommon to see offers of 100,000 points (or more!) that are more than enough to pay for two flights back and forth to Europe,” says Foster. “However, you will need to spend a minimum spend on this card before you receive your points, so make sure you sign up for the card beforehand.”
In fact, you can cover these minimum expenses while traveling on vacation.
For example, a Capital One Venture Rewards card will give you 75,000 miles after you spend $4,000 on purchases within the first three months of opening an account. Your Thanksgiving trip, as well as a few other holiday-related items, may be enough to cover the cost. As long as you pay in full to avoid interest, these miles, which are worth approximately $750 when redeemed through the Capital One Travel portal, are yours for your next trip.
bottom line
By researching the lowest travel cost rates and making the most of your travel credit card, you can charge for vacation travel now and call 2023 without hanging over your head.
“A little good planning can go a long way,” says Ortega. “Remember, you are in control of the process!”
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