Being a mom with three kids that loves to travel but doesn’t love spending top dollar, I constantly take advantage of booking our flights and hotels using travel rewards, aka points and miles. By using points and miles we have saved $15,000 on a trip to London, $11,000 to Hawaii, $9000 on some out west ski trips, and next month, we are saving $26,000 (not a typo) on a stay in Aspen. These are only some of the highlights. Over the years we have saved thousands of dollars using points and miles to book our travel. All of our savings can be viewed here.
You may be wondering how I have all of these reward balances that allows me to consistently redeem them for free travel. Well, I accumulate them in a few different ways, but the primary way is through credit cards. I have a really hard time passing up a good credit card bonus offer and over the last few years these bonuses have gotten better and better. The banks keep sweetening the deals with the thought that they can lure you away from other banks. It works with me mostly every time!
Not only do the banks offer appealing bonus offers, but they offer bonus rewards based on spending. For example, they may offer 5x, 4x, 3x, 2x, points on dining, travel, dining, groceries, gas, etc. Do those spending categories sound familiar? I feel like I am in the grocery store everyday!
The banks also frequently offer limited time spending bonuses, ie use your Amex card on Amazon and you can earn 10x points per $1 spent over the next month. I am always on the lookout for offers such as these and jump at them when I find them. For me, it is all about earning as many points as possible.
With a family of five, I am strategic in what cards my family has in their wallets as well (I have a husband and three teens). We all use our cards independently. What we spend on the cards earns rewards. All of the rewards flow into loyalty accounts. We then use these loyalty accounts to book free travel.
It is quite helpful if you have a travel goal in mind already like “I want to earn enough miles to fly my family to Hawaii for free”. With a goal, you can focus on which rewards are the most important to earn and this will dictate which cards you apply for and ultimately use.
Sounds easy right? For the most part it is. If you have a decent credit history, can pay your bills IN FULL in a timely manner (this is very important), are willing to apply for a few new cards a year and aren’t intimidated about logging in to your online credit card and loyalty program accounts and navigating the sites, then you can travel for free as well.
Here are some simple tips to start earning A LOT of rewards so you and your family can travel for free.
1. Stop Using Cash-I don’t care where I am or how little the charge is, I use a credit card to pay. Even if I am getting just a cup of coffee at Starbucks or a pack of gum at a market, I am breaking out a credit card. In fact, many times, using a credit card will move things along more quickly for the other paying customers in line. With low amounts, many places just require a swipe and no signature. Counting out change takes time.
2. Go through your monthly expenses and see which ones can be switched to be paid with a credit card-By switching over some of your expenses, not only will it help you accumulate valuable credit card points, it can also save you time as you can set payments up to be charged automatically. Think about the following: Can you pay your cable bill, phone bill, ez pass, etc with a credit card instead of a check? Can you pay for religious school by credit card? Team registration fees? Lessons? Your gym membership? (my membership fee gets charged to my credit card each month). What about camp? How about doctor, dentist, orthodontist bills (BRACES!)? Be careful that you will not incur a fee if you switch your payments to a credit card. For example, Con Ed charges a fee and so do most colleges for tuition payments.
3. Happily charge dinner-You’re out with other people and they want to pay cash for the bill…say thank you! Charge the whole bill and collect the cash. You just earned reward points for the entire bill instead of just your portion. Apply this strategy in other areas too. For example, be the organizer of the group gift. If you are hesitant to do so because you do not want to be faced with that big charge on your bill, take the money and throw it aside or leave it sitting in your Venmo account and access it when it is time to pay the bill.
4. Know which cards to use when-Once you have a diversified wallet of credit cards, you need to know which one to use based on what you are charging or on what rewards you want to accumulate. Some credit cards offer extra points at restaurants, gas stations, supermarkets, etc. while others are linked to specific loyalty programs in which you may want to accumulate miles/points.
Let your family in on the plan as well. I have added my kids as authorized users on many of my cards and they know which card to use at the diner which is different than which card to break out at the movies. My husband, Rob, has stickers on his cards so he knows which to use when. I don’t understand how he still sometimes gets it wrong.
5. Find Good Credit Card Point Bonus Offers and Take Advantage Of Them
Many credit card companies offer big reward bonuses when you meet certain minimum spend requirements in a given amount of time. Be on the lookout for for lucrative offers that will further your goals. If you can tackle taking on more credit and meeting the minimum spend, then apply. Important-note the deadline as to when you need to spend the minimum by and make sure you meet this requirement. Also, before you apply, you may want to learn about various bank’s rules and limitations when it comes to applying for cards.
Were you denied or deferred? Read about some tricks and other tips to help your applications get approved.
6. Consider Whether To Keep The Card When The Annual Fee Is Due-When the time comes to pay the annual fee, consider whether the card makes sense to keep. Ask yourself some questions. Are you still using the card for purchases even after you received a sign-up bonus? Is it worth it to keep the card for a perk it offers, like an annual free night?
7. Don’t want the card? Try these alternatives to canceling the card before you actually cancel-If you decide that it doesn’t make sense to pay the annual fee and keep the card, before you call to cancel, consider a few other options first.
-See if the bank will negotiate the fee. For example, they may ask you to make 5 purchases or spend $100 in exchange for them waiving the annual fee. Decide if this makes sense if you receive a retention offer like this. FYI-Amex loves making retention offers, Chase, not so much.
-Another alternative to canceling is downgrading your card to a no-fee or lower fee card. Many cards have a no fee option that is not publicized online. With a phone call to the bank, you can find out if a downgrade option exists. I have downgraded numerous cards.
8. If you need to cancel the card…it will ultimately be ok. 15% of your credit score is based on the length of your credit history. You will rate high in this 15% category if once you have a credit card, you maintain that account for a long period of time. However, not all cards are created equal. Those cards that you have had for a long time are worth holding on to. These cards keep your score elevated and I wouldn’t cancel one of these cards if you can avoid it. As for some cards that you may have gotten recently for a bonus or to try something new, these are the cards that are ok to cancel and yes, your score may drop a bit. However, payment history and outstanding debt make up 65% of your score. If you make your payments on time and keep your debt at around 30% of your available credit (a 30% utilization rate), canceling a card or 2 each year should have a minimal impact on your score.
9. Get Each Family Member Their Own Frequent Flier Accounts-For those times that we actually pay for our flights (yes, we do this at times), I make sure that everyone in my family is getting credit for their flights. Teen tour kids? All of mine earned United Miles on their trips out west with camp. Most airlines do not have a minimum age to become a member of their frequent flier programs. So why shouldn’t the kids start earning rewards as well!
However, one problem that you may run into are the miles expiring due to the lack of activity in the accounts. There are ways to avoid this which you can read about here.
10. Know That You Will Make Mistakes Along The Way-When you begin to collect points and miles, take advantage of bonus and spending offers, redeem rewards and travel there is a lot to keep track of. You may realize later that you missed something in the terms and didn’t get the rewards you were supposed to. Or maybe, you could have redeemed for less had you done a bit more research. Don’t be too hard on yourself. I still make mistakes. I always share my errors with my readers so that they can try to avoid my fate. There are a lot of rules and nuances and to be the most successful at this game, you just have to keep playing!