What if we told you you can travel for free? And no, not the type of free vacation where you have to sit through a timeshare presentation.
Are you buying your groceries, gas, and everyday purchases with a debit card?
If so, you are missing out on hundreds of dollars each year in cash back that could be funding your dream vacation or could be used to take your family to Disney World!
Using credit cards can be scary, but those credit cards can also be your key to free travel.
Nearly every airline and major hotel brand has their own rewards credit card. And banks themselves offer rewards credit cards. A rewards credit card is a card that earns points or miles on purchases that can be used for free travel.
With every swipe of that credit card, you are accumulating points and miles for your next vacation. So put away those debit cards and start saving for your next vacation.
On the flip side, since every airline and hotel chain has their own credit card, where should you begin, and which card should you apply for? And what should you look for when picking the right rewards credit card? We’ve got you covered!
Before we start, I must note that you HAVE TO pay off your credit card balance every single month without fail! If you don’t pay off your balance, you’ll have to pay interest and that absolutely defeats the purpose of earning credit card travel points! I can’t stress this enough. If you can’t pay off your balances every month, this is not for you.
Step 1: Check your credit score using Credit Sesame.
You don’t need a perfect credit score to get a rewards credit card.
But a decent score does help your approval chances. Each credit card issuer has different requirements, but if you have a credit score over 700, chances are you’ll be easily approved for a new travel rewards credit card.
Even scores as low as 650 stand a decent chance of being approved, depending on the credit card.
Check your credit score for free through Credit Sesame.
Step 2: Look for a card with a large sign-up bonus.
Do you have a big purchase coming up? Looking to buy or lease a new car, purchase new furniture, etc.?
Large purchases make a great excuse to get a new rewards credit card and take advantage of the sign-up bonus/sign-up offer.
Several credit cards offer 50,000 to as much as 100,000 points or miles sign-up offers after you spend generally $3,000 to $5,000 within the first three months (Generally one point or mile equals one cent, so that means a 50,000 points/miles sign-up bonus is worth roughly $500 in free travel!).
If you already have big purchases/spending planned, you might as well get a new rewards credit card and take advantage of those sign-up bonuses.
In fact, even if you don’t have a big purchase planned, start paying your bills with a rewards credit card to earn free travel.
Step 3: Check the annual fee amount to be sure it’s doable for you.
Some rewards credit cards come with annual fees, but they often come with other benefits.
For example the Delta Platinum Credit Card by American Express charges an Annual Membership fee of $195. But with that annual fee, you also get a free companion fare (fly someone with you for free), which can be worth hundreds of dollars.
So it’s important to factor the pros and cons of the annual fee and associated benefit with the different credit cards.
Step 4: Know what cards to use on your items to get the most bang for your buck.
It’s also important to factor in how particular credit cards earn you points and miles.
Some cards earn a flat point/mile per dollar, while others have bonus categories where you might earn 5 or 6 points/miles per dollar for groceries purchases and a flat point/mile per dollar for all other purchases.
For example, I always use my Hilton Surpass Card from American Express when purchasing groceries as it earns 6 points per dollar on grocery purchases.
Step 5: Pick a card and apply.
Pick the rewards credit card that best fits your spending habits, and that will help get you to where you want to go. And then go apply!
If you get approved, just be sure to keep track of your spending to make sure you hit the sign-up bonus.
If you don’t get approved, most credit card companies have reconsideration lines. It’s worth giving it a second shot. Generally the best practice is, if you are immediately denied, to call the reconsideration line as soon as possible.
A quick google search will give you the reconsideration line for most credit card issuers.
Step 6: Put away your debit card.
Put away your debit card. Period.
Put all of your monthly spending on your rewards credit card, earn the points and miles, and then pay your credit card off each month.