Credit cards can be an amazing tool in your financial planning tool belt. When you use a credit card to make purchases, there are rewards, perks, or points that come along with using that card. ‘Travel hacking’ is a method where you use credit cards with travel-related perks to earn points that can be spent on flights, hotels, or excursions.
Garrett, one of the Certified Financial Trainers at The Gym, has been traveling quite a bit recently and using credit card rewards to keep the costs low. Today, he is joined by his colleague Bevin to talk all about travel hacking. They discuss choosing the right card, how to earn points, and how to use those points to travel and explore.
Podcast Notes
- Credit card points can be used for travel, exploring, hotels, and excursions. Garrett has been taking advantage of travel perks lately, and has 9 credit cards!
- He and his partner love Disney and like to enjoy Disney parks all over the world. Most recently, he was able to visit Disneyland in Paris using credit card points, and it was more affordable than a trip to Orlando.
- Each provider has its own rewards system with different names, but ‘points’ is a good general blanket term. They’re all similar but have their own benefits and disadvantages.
- There are some with no annual fees, whereas others range between $95-$650 depending on the card.
- Think about the annual fee the same way you would a subscription. An annual fee is not a bad thing, as long as you’re planning for it, and find value in the rewards offered.
- You can ask for the annual fee to be lowered or waived when it comes time to pay again. It never hurts to ask, and if they say no, downgrading to a card with no fee is usually an option.
How to earn points:
- Sign-up bonuses are a great opportunity. A company will offer points if you spend a certain amount of money in a scheduled timeframe. If this amount is within your planned variable spending limits or money you’ve already planned for, this is a great way to earn points!
- Once you’ve signed up for cards, check for points multipliers. These are categories (gas, restaurants, groceries) that when you spend within them, more points are earned. Choosing multipliers in categories you regularly spend in is a great way to earn extra points.
- You will earn points by just using your credit cards for regular spending.
- If you plan to make a bigger purchase, save that money into a sinking fund, make the purchase on your credit card to get the points, and then pay off the balance.
Favorites at The Financial Gym
- Garrett recommends Chase and American Express for their rewards cards.
- The Chase Sapphire Preferred Card is a favorite among Trainers at The Gym. Even with the $95 annual fee, it’s one of the most popular cards.
- Check out the BFF Approved Credit Card here
In addition to using points for travel, other tips for traveling on a budget:
- Start early and do lots of research. There are deals out there, and the earlier you start planning, the more deals you can find.
- Subscribe to newsletters to stay on top of deals.
- Get creative about what traveling looks like. It doesn’t always have to be a flight to a faraway destination. Consider road trips, camping, or getting an AirBnB in a new place to unplug and recharge.
- House sitting/pet sitting is a great way you can explore while getting paid!
Things to keep in mind
- In terms of actual value, where you redeem those points matters! You may get a better return to use your points on things like travel, rather than opting for the cashback.
- If you plan to use a credit card for a big purchase in order to score some points, make sure the money is already saved.
- The most important thing to remember when using credit cards is to ‘know thyself'. If you’ve struggled with credit cards in the past, or struggle to stick with a budget, these strategies might not be a great fit for you right now.
- Opening new cards will affect your credit, so be mindful of credit pulls if you’re planning to apply for a loan soon.
- If you plan to start using credit cards, create a system that works for you and stay organized. You can get into this casually, or truly go all out and put in a lot of work.
Resources Mentioned in the Episode:
Awardhacker.com - A free product made to help people find the best award flights without being an expert in every airline mileage program.
Hopper - An app for finding deals on travel
BFF Approved Travel Credit Cards
If you want to learn more about travel hacking, and if it would be a good fit for your goals, a Certified Financial Trainer can help make it part of the plan!
Find out more about working with a Certified Financial Trainer here:
Financial Accountability Coaching & Trainer on Demand
Meet The Trainers
Meet Bevin Morgan, Level 2 Certified Financial Trainer
Meet Garrett Faulconer, Level 2 Certified Financial Trainer
