How To Use Credit Cards To Earn Cheap/Free Vacations

How To Use Credit Cards To Earn Cheap:Free VacationsBack in March, I published the article Are Rewards/Bonus Credit Cards Right For You? This is a personal finance blog, and I know that many are against credit card use.

However, while there are negatives to using credit cards, if you know how to use them to your advantage then there should be no negatives. Using credit cards to your advantage is a huge positive.

One of the main positives of using credit cards is that many nowadays have a rewards system in place (such as the one at the bottom of this article – Barclaycard Arrival Plus™ World Elite MasterCard) to earn free rewards such as gift cards, cash, vacations, and more.

You can use your credit cards just like you normally would, and earn free things along the way.

What’s bad about that?

Nothing!

There is a common myth out there that you have to be rich or well-off in order to travel. That is just simply not true! I often go on vacations where I hardly have to open up my wallet. This is because I save up my rewards points for travel.

 

I have used my rewards for many different things. I have earned:

  • 5 round trip flights to Las Vegas that I used in May of this year to fly me and my friends to Vegas;
  • 3 or 4 round trip flights to Las Vegas in 2012;
  • Over $500 in gift cards to stores like Lowes and Target (you can also buy gift cards for hotels, cruises, etc.);
  • Around $1,000 cash back (yes, it’s actually cash!), and more.

 

Here are the ways I plan on using credit cards to earn cheap and free vacations:

 

Spending like I normally would.

I plan on spending money just like I normally would.

I don’t think anyone should be spending extra money just to earn rewards points, because you will be hurting yourself more than helping yourself most likely. If you cannot control your credit card spending, then please stop reading this article! Using credit cards for rewards points is definitely not for everyone out there. Some are much better with cash. Do not feel ashamed!

Anyway, there are plenty of ways to spend money by using credit cards to earn cheap and/or free vacations.

I put my groceries, clothing, gas, phone bill, and everything else that I can onto my credit cards.

It all adds up quickly so I am always able to meet the minimum spending limits that new credit cards ask you to meet in order for them to give you your sign-up bonus (more on this below).

We got married earlier this month, and I put nearly everything on my credit cards. Yes, that means that I will have to pay a lot come this time next month, but I already have the money saved so I can just make one big lump-sum payment towards my credit cards when the payment is due.

 

Using sign-up bonuses to my advantage.

Most of the rewards that you will earn are from signing up (and being approved) for rewards credit cards that have high sign up bonuses. This is where a credit card may have a bonus of $400 in travel for you signing up. You usually have to spend somewhere around $1,000 to $3,000 within the first three months to qualify for that though.

All you have to do is spend the minimum amount within the specified time period and then you are on your way to earning free rewards. Yes, it is really that easy.

Also, to some $3,000 may seem like a lot of money to spend in 3 months, but if you add up your normal monthly spending, then you might be somewhere around that. We are around that number, so it’s easy for us to earn bonus rewards.

There are many different types of bonuses out there. I have seen credit cards that offer a measly $25 for you to sign up, and then there are credit cards out there like the Barclaycard Arrival Plus™ World Elite MasterCard where you can earn $440 for travel fairly quickly.

 

I will pay my credit card bills on time.

I have always paid my credit card on time.

I have never paid a late fee or paid money for interest.

There is a myth out there that if you use credit cards that you will 100% have to pay interest and that is simply not true. For most credit cards (I can’t think of a single credit card that doesn’t do this), you only pay interest when you are late paying your credit card bill and you let your balance accrue.

The key here is to pay off your balance by the due date (I always like to pay a few days before just in case something goes wrong with my payment), and then you will NOT have to pay any interest.

 

I will keep a log of everything.

If you really get into using credit cards to your advantage for rewards points, then it can be easy to make a mistake and end up having to pay interest.

This is something that you definitely do not want to do, as interest rates on credit cards can be fairly high.

Because of this, I will make an Excel sheet that lists out where I am for different credit cards. This way I can use my normal monthly spending to my advantage by knowing which expenses should be charged to each credit card.

 

 

If you want to learn more about this credit card, please check out my article Barclaycard Arrival Plus™ World Elite MasterCard Review – Get $440 For Travel.

 

Do you use credit cards to your advantage? In what ways?

Are you working towards earning free/cheap vacations? Why or why not?

 

Comments

  1. RJ says

    A few years back before the financial collapse when banks were paying actual interest in their savings accounts instead of the 0.01% that they pay now I would take advantage of the 0% APR transfer for 12 months or longer. Opening credit cards and receiving checks from them to pay my “other credit cards” off. Sticking that money in a savings account paying 5% and getting hundreds to thousands back after a year in interest. It was fun while it lasted, it was a form of gambling for me before I knew any better ^_^

    • Michelle S. says

      Oh no! That really stinks. That’s exactly why I plan on keeping track closely because I would hate for a small amount to prevent me from getting a bonus.

  2. Christine Berry - Wealth Way Online says

    I’m actually trying to build up points for the first time in my life. I think I earn one point (with one dollar value) for every $90 I spend… it’s not a great rate of return but considering the number of things I book on credit cards such as hotels, flights etc I’m sure it’ll add up fast. Well – I hope so!
    Christine Berry – Wealth Way Online recently posted..How Hard is it to get a Home Loan When You’re a Blogger?My Profile

    • Michelle S. says

      Yes! Credit cards can be great for those who know the rules, and everyone should learn about all the different parts of having a credit card before they have one. For example, I know someone who thought that paying the minimum payment each month was all that they needed to do so that no interest would build up. Sadly, they were paying tons of money in interest each month without even realizing it.

  3. Brad @ How To Save Money says

    Your advice sounds great. but I am in the group that has to pass on using credit cards. I can never seem to organize myself enough to pay on time, and I always seem to charge more than I intended to. I cut up my credit cards years ago and have no intention of ever getting more (although I can see how they might be good to have in an emergency). More power to you for your control. It is not for me though!
    Brad @ How To Save Money recently posted..Drive a Fuel Efficient Car to Save MoneyMy Profile

    • Michelle S. says

      Yes, credit cards are definitely not for everyone. For me, I’m bad with cash. When I say bad, I am just horrible! I don’t know what it is, but with cash I can never remember what I spent my money on, and I sometimes treat it as “free money” because it’s not recorded as closely.

  4. Tania says

    I’m with you, I’m a CC user. But as I always say, I only use them as debit (that is, with cash in the checking account as back up). I haven’t gotten a LOT of rewards because I really spend very little (about $200/mo). But over the past 5 years, I fancy I’ve made over $800 in rewards one way or another, especially with my Amex card.
    Tania recently posted..What’s in your Life Binder?My Profile

  5. DC @ Young Adult Money says

    Both my wife and I churned the Barclaycard earlier this year and the hardest thing for us is finding time to travel, not the expense that comes with it! We did get one hotel room comped when we went to Des Moines for a night/day. I plan on using them for an out-of-town wedding in August as well. I’m thinking Vegas might be a fun little weekend trip for us as well. It’s so nice having the rewards to use!

  6. Andrew says

    I remember when I first heard about travel rewards and I thought they were too good to be true…but once I got in the travel hacking game…I got addicted. It’s pretty awesome when you get travel for free or close to it! Can’t wait to get back in once I get my mortgage and passed my co-op board interview…didn’t want any dings to my credit.
    Andrew recently posted..If it’s too good to be true…My Profile

  7. Kristin Bonot says

    I am definitely on board with smart and strategic credit card use, though I agree that it is not for everyone and people need to find out what works for them best! The best is when I make business purchases- I get reimbursed ANDit contributes to my cash back or points! My boyfriend and I just used our points to book a trip to South America. We had to pay a bit extra as we didn’t have quite enough- but still much better than paying full price tickets.

  8. Dan @ Our Big Fat Wallet says

    I think it’s a great idea to use credit cards to get some free trips. The problem is that here in Canada I think we have much less selection (and competition) for credit cards. There are a few decent ones available but nothing as lucrative as you have down there. I do have a cash back card I love though – 4% cash back on gas and groceries
    Dan @ Our Big Fat Wallet recently posted..Asset Allocation For All AgesMy Profile

  9. Squirrelers says

    There are tons of rewards that can be earned, and I too enjoy travel rewards. What I really like is how you highlight that bills should be paid in full on time. As long as we do that, and don’t change our spending habits just to get rewards, it can be more than worth it to find the right card with a rewards structure that works for you. Otherwise it’s like leaving vacations on the table :)
    Squirrelers recently posted..The World Cup is Big Business, but Why Don’t Americans Care So Much?My Profile

  10. Dana Wilson says

    They are not called REWARDS for nothing. Pay bills on time and do go beyond your budget just to get rewards especially if it’s beyond you can afford. Thanks for sharing this!

  11. Jonny Pean says

    Generally, I avoid using credit cards. However, I do use them now. However, I make it sure that I always pay in time so that I don’t have to pay interest. Once I got real taste of reward points, I started using it more often now than before. I accumulated lots of points which I didn’t redeem for quite sometime. She was hankering for a particular ‘gift’ (not disclosing here, it’s private :) ). So, one day I just brought her the gift. She’s happy and I too didn’t have to shell out my hard earned money as I redeemed them to buy the gift. Win-win situation for everyone here.. I hope my wife is not seeing this post, otherwise I’m done. However, I want to add here that one third of the $48 billion rewards given by credit card companies are not utilized. I was part of it so long. But I’m not now. I think I’ve become prudent nowadays. :)

  12. Karen Martínez P. says

    Good post, Michelle.

    People have a bad perception of credit cards. I always pay with mine!

    From car maintenance and insurance to restaurant meals and grocery. As long as you have the budget for it and make the full payment on time, it shouldn’t be a problem.

    Credit cards earn points, help you manage a better cash flow and keep track of your expenses. You also avoid losing money (if someone steals your purse -that’s why insurance fraud exists).

    Aiming for the 50″ TV! :D

  13. Michelle S says

    It definitely helps to keep a log of all the companies, pts, rewards, expiration dates. I agree with the spending like usual- don’t go and buy something just to rack up cash back because it’ll take you time to accumulate points and cash.

  14. Rusty H says

    I think using credit cards can be used to your advantage — they can help improve your credit score, but only if you pay the balance every month. It’s easy to get trapped in credit card debt.

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