Have you heard of the term “travel hacking”? If not, you’re not alone. I was introduced to the concept of travel hacking over a year ago by a Travel Rewards Coach (and yes, those exist). If you listen to episode 12 of the CGS podcast: An Introduction to Travel-Hacking, you can get all of the juicy details. Now, I want to share how to use credit cards to fund your travel, a beginner’s way to travel hack!
Essentially, travel hacking is using credit card rewards to help you travel for free. There’s an entire strategy behind it that you can learn about in the podcast episode. However, to get started, you can keep reading to learn about smart ways to use credit cards to fund your travel. This isn’t as advanced as travel-hacking, but it’s a great place to begin!
6 Smart Ways to Use Credit Cards to Fund Your Travel
#1 Use points from travel cards to book travel
One of the easiest ways to use credit cards to fund your travel is to leverage credit cards that come with travel rewards. Anytime you use your card, you’re accumulating points or rewards. When the time comes to book a trip, you can pay with your points or rewards! That way you’re not coming out of pocket for the trip.
Me personally, I use the American Express Bonvoy card for just about all my spending. I pay my card in full every month because I’m only spending money on things in my budget. Over time, my points add up and I use the points to pay for hotel visits when I travel.
#2 Take advantage of sales offered through your credit card company
If you have a credit card that focuses on travel rewards, you can keep an eye out for sales offered through the card. It could be a sale on travel rewards, a sale on booking certain hotels or rental car companies, or a sale on flights. This can come in handy if you’re in the beginning stages of travel planning.
#3 Use a cash rewards card to book travel, then redeem the rewards
This is slightly advanced, so stay with me. When you go to book and pay for your travel plans, use a credit card that has cash-back rewards. Meaning, every time you spend money on a specific item or category, you get a percentage of the purchase back in the form of cash. Then, when it’s time to pay the bill, cash in the rewards as a statement credit! This will reduce the amount you spend on travel to begin with.
Certain cashback cards come with categories as high as 5% for cashback! I recommend the Bank of America Cash Rewards Card or the Discover It Card. I have both of these and they come in handy when I spend money on specific things (not necessarily travel).
#4 Redeem points for gift cards to use before or during your travel
Do you have a credit card that doesn’t offer travel rewards? Well, they likely offer points that can be redeemed for gift cards. Use the gift cards to pay for things in preparation or during your trip. You can get gift cards for retailers to help you shop for clothes for the trip. You can get gift cards for restaurants to try while on the trip. This is a great way to help you cover costs associated with your trip by using the credit card rewards available to you.
#5 Use a credit card during your travel, then redeem points or cash for future trips
We all have to start somewhere! If you’re new to credit card rewards and you have a trip in the works, consider signing up for a travel credit card! Use that card to fund your trip and start accumulating the points for future trips.
You can also leverage another type of rewards card and use the cashback or rewards for future trips as well. The point is to get more bang for your buck. You’re already spending money on the trip, so you may as well get something back for it – even if the savings only applies to future trips.
#6 Strategically open new cards during major travel points bonuses
This is another advanced strategy. If you know you’ll be starting the vacation planning process, keep an eye out for any promotions or specials from travel credit cards. You’ll often see things like “earn 125,000 bonus points when you spend $3,000 in 3 months of opening your card.” Again, you’re already spending the money, so you may as well get something back for it!
Chase, American Express, and Capital One all have great travel rewards options. Also, if you have a specific airline or hotel chain you like, you can get a card from those brands as well. That will give you extra points and discounts when you book future travel with them too!
I want to stress that the only stipulation to this entire article is this: pay your credit card balances in full each month. If you’re carrying balances and accruing interest, you’re losing money in the long run. It may feel good to get the points and rewards but you’re spending so much more in interest – it’s not worth it. Now that I’ve made that disclaimer, leveraging credit cards to fund your travel can be a great way to save money while exploring new places! Have you tried any of the strategies above? How do you use credit cards to fund your trips? Share your strategies or questions in the comments section below!