Have you ever heard of people who travel around the world practically for free by simply accumulating rewards with their credit cards? For many, this mode of travel seems complicated, time-consuming and near impossible. The good news? It is not that hard to earn enough rewards to travel for free.
In this article, we’ll explain how to use credit cards and rewards programs to travel for free.
Sign Up for the Best Travel Credit Cards
To qualify for the best travel rewards credit cards, and eventually travel for free, you need to have excellent credit. If you don’t have great credit right now, work on improving your credit by taking care of past due balances and establishing a positive payment history.
There are generally two types of travel credit cards: brand-specific credit cards which pay higher rewards on travel purchases from a specific airline or hotel and general-purpose credit cards which pay higher rewards on all travel related purchases.
If you are loyal to a particular airline or hotel, you can choose a co-branded credit card. These cards generally come with a generous sign-up bonus, which usually includes a base amount of points. Many airline credit cards offer at least 1 mile per dollar on any purchase, which will help you accumulate points for traveling. With the right credit card, you can earn enough miles each year to cover at least one plane ticket and often more.
On the other hand, if you make a lot of travel purchases across all brands, a generic card will suit you better. Points or miles earned under a general travel rewards program often have a fixed value. For example, you’ll earn 1.25 cents per point with the Chase Sapphire Preferred Credit Card when redeeming points for travel through Chase vs a single cent with the Bank of America Travel Rewards Credit Card, regardless of how you redeem.
AIR MILES is also one of the most popular travel rewards programs. If you are looking for an Air Miles rewards travel credit card, you might be interested in the American Express AIR MILES Credit Card. You earn 1 mile for every $15 spent at AIR MILES Partners and 1 Mile for every $20 spent in card purchases everywhere else. As well, the card has no annual fee.
You may need more than one credit card to accumulate enough travel rewards for a full trip or to travel regularly using rewards only. With many travel credit cards, you’ll not only increase the number of points or miles you earn from welcome bonuses, but you’ll also be able to diversify your rewards to cover more areas of your trip.
For instance, you can use a general travel credit card to pay for your rental car, a hotel card to cover your stay, and an airline credit card to book your flight.
If you already have great credit and aren’t afraid to pay higher annual fees when the benefits outweigh the costs, you might want to jump straight to a premium travel rewards card. The Chase Sapphire Reserve® Credit Card and the Platinum Card® from American Express hold two of the top spots in this category.
Managing multiple credit cards like this requires discipline and organization. You don’t want to miss a payment and pay interest charges, which can offset the value of the travel rewards you redeem. After all, a free trip isn’t really free if you have to pay late fees or interest charges to get there.
Snag a Credit Card Welcome Bonus
Getting a credit card with a welcome bonus is the fastest way to earn enough miles to travel for free. Many travel rewards credit cards offer very lucrative sign-up bonuses, including a hefty stack of points or miles, often tens of thousands. Some of the bonuses are so big that you immediately win a free flight. You earn this welcome bonus when you register as a new cardholder and then spend a certain amount on your card, usually within the first three or six months after opening.
With many credit cards, it will take approximately four to six weeks after earning the bonus for it to be credited to your account. Be patient, this means that it may take around five months from the time you open your account before you receive your welcome bonus.
For example, the Capital One Venture X Rewards Credit Card offers a welcome bonus of 100,000 bonus miles to qualify, make purchases of $10,000 or more within the first six months of opening your account. This bonus equals $1,000 in travel, enough for a free trip.
Pay Your Balance in Full
If you want to travel for free then this is one of the most important rules to follow when using a rewards credit card, especially a travel rewards credit card. Paying off your balance in full each month (and on time) will help you maintain excellent credit, which will help you qualify for better credit card deals.
In addition, you must pay interest each time you carry a balance on your credit card beyond the grace period. Interest cancels out any rewards you receive on your credit card. To truly use your credit card for free, you must pay all of your fees each month to avoid interest.
If you’re charging more money to your credit cards than you can afford each month, the high-interest rates will likely wipe out your rewards. Those “free” vacations won’t really be free if you’re wasting hundreds or thousands of dollars in interest to earn points.
Plus, if your credit reports show large balances on your credit cards (especially if your balance-to-limit ratio is high), your credit scores could drop.
It’s not smart to spend extra money to get more credit card rewards. But you might already be spending money each month on things you could pay for with a credit card instead, like insurance, phone, and internet. The more you use your credit card, the more rewards you can earn.
Are Airline Loyalty Programs Worth It?
The majority of airlines and hotels have a loyalty program that will give you rewards for your flights and stays. By joining these programs for free, you can increase your rewards when you provide your loyalty number when booking.
Stick to the same hotel and airline brands as much as possible. The more you use the same brands, the more points you can earn. You will also progress through status levels which will give you additional benefits as well as bonus points on your flights and hotel stays.
By following these steps you will be well on your way to start to travel for free!
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