Luxury Travel Without the Luxury Price Tag
In a few weeks, my husband, daughter and I will be stretched out in our lie-flat business class seats on a flight to London. Once we land, we’ll be spending six nights at a luxury hotel — and then moving on to another, even more luxurious inn in Paris. What’s better than all this first-class coddling is the fact that it’s not costing us a cent. We paid for it all with rewards from our credit cards.
The rewards card game is not for those who carry credit card balances. If you carry debt, focus on finding low rate cards to help you pay it off. If you’re paying your balances in full every month, though, chances are good you could squeeze more rewards from your plastic. Here are the most effective ways to do just that.
Go for the Big Bonus
Credit card companies these days rely heavily on so-called “sign up bonuses” to attract new business, and smart customers can use these deals to pile up masses of points quickly. American Express recently invited me to apply for its platinum card, and sweetened the invitation with an offer of 50,000 bonus points. Not bad, but I happen to know the deal has been sweeter. My husband got an Amex platinum card with 100,000 bonus points. He also got a Southwest card with 50,000 bonus points (the current offer is 25,000) and a few years ago I scored one of the British Airways cards with a 100,000-point bonus (it’s currently 50,000). So it’s worth asking if they can do better than the first offer you see.
Bonuses are tricky, though, since the offers change constantly and because each offer has a different “spend” requirement. A “spend” is how much you’re expected to charge on the card within a limited period, usually three months after getting the card, to qualify for the bonus points. Some of the richest deals require the user to spend $1,000 to $5,000 in that relatively short window. If you’re not a big spender, you can search for cards with bonuses requiring a smaller spend. Some hand over the bonus after you’ve made a single purchase on the card. The US Airways Premier World MasterCard, for example, currently offers a 40,000 mile bonus after the first purchase.
Perusing frequent-traveler sites such as The Points Guy, Frugal Travel Guy and Mommy Points can help you spot the good deals. You need good to excellent credit scores to qualify for the best cards. To keep your scores high, avoid applying for too many cards at once (I try to limit my applications to one or two a year) and don’t apply for a card if you’re in the market for a major loan, such as a mortgage or a car loan.
Use Online Shopping Portals
Many rewards cards offer additional points if you simply start your online shopping at their portal. Shop Discover, for example, recently provided an additional 10% cash back for every dollar spent at Macy’s online store. To get the bonus, you just register your Discover card at the portal, click on the Macy’s link and start shopping. The amounts charged to your card garner the regular rewards plus the bonus. Don’t have a Discover card? No worries. Several airline, hotel and bank portals also offer bonus points at Macy’s — and at thousands of other stores.
There are so many ways to earn these extra points, and the deals vary so much, that you’d be smart to check a comparison site such as Cashback Monitor to find the highest rewards rate for each retailer. The site tracks the bonus offers for over 10,000 stores via 38 online portals.
Sign Up for (and Read) Rewards Card Email Newsletters
You’ll find additional opportunities to earn extra points by perusing the reward programs’ newsletters. Often one travel provider, such as an airline, will partner with another, such as a hotel, to offer double or triple points. We recently got double Hilton Hhonors points on a Cruises Only vacation. Many cash-back cards offer extra rebates for rotating categories of spending; for a few months, you may get the extra reward at restaurants, while the next quarter you’ll get them at department stores. You won’t be able to take advantage of every opportunity, but those that work out for you can be lucrative.
Rescue Orphaned Miles
One study estimated that a third of loyalty program rewards are never redeemed. That translates into U.S. households missing out on an average of over $200 a year. Part of the problem is that it’s hard to keep track of all the rewards you may be earning, since the same study estimated the average household participates in 18 loyalty programs (yes, 18).
It’s time to stop the bleeding. You can track travel rewards programs with sites like AwardWallet and TripIt Pro and get alerts when points are about to expire (bonus tip: using online shopping portals can be one way to keep points from expiring). If you have points sitting in a rewards program you no longer use, see if you can transfer them to one of your active accounts using the Mileage Converter tool on WebFlyer.
Earn ‘Em and Burn ‘Em
It may be tempting to store up your rewards for that big score: the once-in-a-lifetime cruise or the international flight in first class. Unfortunately, rewards programs are constantly devaluing their points and miles so that it takes more of them to get the reward. If you don’t earn points fast enough, you may find yourself running on a treadmill toward a carrot hung just out of your reach. Consider adjusting your goal if it would take you more than a year or two to achieve it. You may dream of Paris, but to paraphrase Lord Tennyson, tis better to cash in points for a weekend getaway than to never cash them in at all.
Liz Weston is an award-winning journalist and author of several money books, including the best-selling “Your Credit Score.” She writes about personal finance at her site AskLizWeston. You can like her on Facebook and follow her on Twitter.