How Credit Cards Can Help You Travel for Free

If you consider yourself  to be financially responsible and have been looking for ways to offset travel expenses such as cheap plane tickets, transportation or free hotel stays, then credit card sign-up bonuses is an option you may want to consider.

When I traveled in August and September, I flew Business Class on Turkish Airlines and stayed in luxury hotels for 12 nights, all by using credit card bonuses I earned throughout the year. I am a budget backpacking traveler so whenever there is an opportunity to travel for as little as possible, for as long as possible and comfortably as possible, I take that opportunity. Credit card  sign up bonuses opens the door to much more travel.

How to Book a Free Airline Ticket

You can earn frequent flier miles and hotels points by using a travel rewards credit card. Travel rewards credit cards usually offer lucrative sign-up bonuses worth up to 100,000 miles to get people to apply for the cards. By taking advantage of sign-up bonuses, you can easily offset your travel expenses by $1,000-$2,000, depending on what your travel goals are.

For example, Chase has a Southwest Rapid Rewards credit card and its sign-up bonus is usually 50k points. If you get the sign-up bonus, that means you basically have 50k frequent flier miles towards Southwest Airlines. With 50k points, I can fly to Portland, Oregon from Burbank, California and back roughly about 7 times because with Southwest’s WannaGetAway deals because it costs about 5-7 thousand Rapid Reward points between Portland and Burbank. That’s 7 free round trip flights I can take for just applying for a credit card.

Barclaycard Arrival Plus™ World Elite MasterCard® also has a high bonus of 40k miles which is worth about $440 in free travel that can be used to offset the price of your airline ticket or even hotel, car rental, train or cruise. These points are more flexible than traditional airline miles because you can redeem them for ANY travel expense.

This means you can buy a flight from any airline or pay for a hotel stay in any hotel and redeem your Arrival miles for a statement credit for the cost of travel. Each Arrival mile is worth 1.0 cent each plus you get a 10% rebate when you redeem miles, so 40,000 miles gets you $440 worth in free travel. Again, not bad for spending 10 minutes filling out a credit card application online.

How Credit Card Sign-Up Bonuses Work

First, you need to do some research and find out what types of credit cards are out there that fit your needs and that you will probably qualify for. If you’re credit score is above 700, you have a much better chance of approval for some of the better credit card sign-up bonus offers. I like using Credit Karma to check my credit score because it’s free and I can access it at any time without lowering my credit score.

Once you’ve decided on a type of travel rewards you want to earn there are a few things you have to consider:

• Does the credit card have an annual fee? If it does, is the fee waived the first year?
• How much is the sign-up bonus?
• What is the minimum spend requirement to earn the sign up bonus?
• How long do you have to meet the minimum spend?

Does the credit card have an annual fee? If it does, is the fee waived the first year?

If the credit card does have a fee, usually the fee is waived the first year. If it’s not waived the first year, you have to decide whether the fee is worth paying for to get the sign up bonus. If a card has a $70 annual fee and the sign-up bonus is worth at least $500 in free travel, that might be a fee I wouldn’t mind paying.

How much is the sign-up bonus?

Credit cards have different sign-up bonuses that you can redeem for airfare, hotel stays, products, gift cards, etc. If you’re looking to earn airline miles, go for a credit card with a sign up bonus that’s at least 30,000 points or miles, but a great bonus offer would be 50k-100k miles or points.

American Airlines Award Chart
Alaska Airlines Award Chart
Delta Airlines Award Chart
Frontier Airlines Award Chart
JetBlue Airlines Award Chart
United Airlines Award Chart
US Airways Award Chart

Not all credit card travel rewards are for airline miles and not all are valued equally. A credit card that’s co-branded with a hotel program will earn you points for free hotel stays.

For example, the Club Carlson Premier Visa card earns you points towards free Club Carlson hotel stays which include Radisson Blu hotels. Though, in most cases you can’t transfer your points to miles and vice versa, but depending on the reward program you may be able to.

Most co-branded credit cards also offer a sign-up bonus. The Club Carlson Visa’s current sign-up bonus is 85,000 points which is enough for 9 free nights at a category 1 hotel, plus you get a free night when you redeem two nights in a row. This means you can get up to 18 free nights at Club Carlson hotels from just one credit card. Now you see the incredible value you can get from sign-up bonus offers. This is how we booked our free stays at three Radisson Blu hotels in Turkey and Croatia and they were amazing hotels.

Club Carlson Hotels Reward Nights
Hilton HHonors Reward Nights
InterContinental Hotels Group Reward Nights
Marriott Hotels Reward Nights
Best Western Hotels Reward Nights

Again, here are hotel rewards charts to help you compare how many points you need to redeem a free hotel night. Each hotel has its own chart and points redemption rate, and obviously some are more valuable than others.

What’s the minimum spend and how long do you have to meet it?

To earn a credit card sign-up bonus you have to meet either the minimum spend requirement or make a single purchase. A minimum spend requirement is so that the credit card company is not just giving you valuable miles for free and that there is activity happening on your credit card. Most credit cards have a minimum spend requirement anywhere from $500 to $5,000. Typically, it will be around $1,000 in three months.

Before you start to panic, you usually have three months or ninety days from the time you get the card to meet the spend, check the terms and condition for the exact length. $1,000 in three months breaks down to about $340 a month which, even for budget travelers, is not unreasonable to meet if you have bills and house hold expenses to pay for. Just remember to charge them to your credit card and depending what your paying for, you can earn more points. For example, some cards will earn you 5x more points per dollar spent on gas, grocery stores, or other bonus categories.

Here are a few practical ideas on how to meet your minimum spend:

• Monthly cell phone plan
• Groceries
• Car Insurance
• Cable/Internet
• Utilities
• Tuition/Loan repayment

Best Current Credit Card Offers(as of January 12, 2014)

 

Barclaycard Arrival Plus™ World Elite MasterCard®

Bonus: 40,000 miles (up to $440) after $3,000 in the first 90 days
Annual fee: No annual fee first year (then $89)

The US Airways® Premier World MasterCard®

Bonus: 40,000 miles and two companion certificates after making a single purchase in the first 90 days
Annual Fee: $89 annual fee

Club Carlson Premier Rewards Visa Signature Card

Bonus: 85,000 points after spending $2,500 in 3 months
Annual fee: $75 annual fee

Citi^® Hilton HHonors^™ Reserve Card

Bonus: Two weekend nights after spending $2,500 in 4 months
Annual fee: $95 annual fee

Citi Platinum Select / AAdvantage World MasterCard

Bonus: 50,000 miles after spending $3,000 in 3 months
Annual fee: $95 annual fee

Check out my Travel Credit Cards section for a list of credit cards that don’t have a foreign transaction fee.

Always Pay Your Balance in Full

If you do decide that you want a travel rewards credit card, you need to pay off credit card balance in full every month! If this is something you can’t do, then you might want to reconsider applying for a credit card. Carrying a balance into the next billing cycle means you will have to pay interest which takes away from the value of your sign up bonus. Plus, paying your credit card off in full every month will help bring up your credit score.

If you have any questions about traveling with points earned through credit card sign up bonuses or  how to book trips with points, please don’t hesitate to ask!

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