Lavish trips seem to be all the rage on Social Media. Every other post includes the hashtag, #Baecation, #GirlsTrip, #SoloTravel or something of the sort.
But how are people traveling like this? And who’s got the money to stay away from work for so long? I mean, don’t we all have bills?
Yes, we do. But it’s the way that we pay our bills that lets some people travel a lot more than others.
Enter, the game of credit cards.
Did you know that some credit cards will actually reward you flyer miles and points just for using them? Of course you knew this. You see the ads all over the commercials. The tagline goes something like, “What’s in your wallet,” or “Everywhere you want to be.” But the truth is, it’s how you use what’s in your wallet that will get you to where you want to be. And right now, you want to be on vacation.
So what should you do? How can you use your bills to help you travel?
First off, make sure that you have a credit card that offers flier points. Most travel cards, on average, will offer between 1-3 points for each dollar you spend using the card. And while the value of each point isn’t very much (some equal only one penny) they most definitely add up. And they do so quickly.
My favorite airline, Jet Blue, offered me 30,000 points just to sign up for their JetBlue Plus Master Card. The catch, I had to spend $1000 within the first 90 days of owning the card. This may sound like a lot to some. But it was very easy for me to do. Especially since I paid my rent, car, utilities and groceries using the car. In just one month, I was awarded a point for every dollar I spent (money that I would have spent anyway paying bills), plus an additional 30,000 bonus points for spending over $1,000 in the first 90 days. (I hit that mark within 30 days. But hey, who cares!)
Now, let’s do the math.
I used the card to pay my basic monthly utilities. This added up to be exactly $2,276, which earned me 2,276 points. Because I spent over $1,000 during the 90 day promotional period, I was awarded an additional 30,000 points, for a total of 32,276 points added to my tally. Each point is equal to about 1 cent. So when it was time for me to cash in on a flight ticket, I had $322.76 to spend on a flight! And I did nothing more than pay my bills!
As it turns out, I hadn’t anywhere to go during my first month of using the card. So, instead of cashing it in on a short flight, I saved up my points until I could afford a much longer trip. And every month, like clockwork, I’m awarded an additional 2,276 points just for paying my bills.
Jet Blue is my most favorite airline. So of course, I would use a credit card that favors them. However, other credit cards offer the very same advantages including all American Express charge cards, the Chase Sapphire and Sapphire Reserve cards and the Capital One Venture card.
It’s also important to keep in mind that some credit cards are better than others. For example, some may require you pay an annual fee, while others may require you to have stellar credit. Some credit cards may offer you valuable rewards that cannot be redeemed in travel points, and still others may offer you travel points that can only be redeemed during certain times of the year. In the end, it’s important for you to sign up for the card that best serves you and your travel needs.
But what’s the catch, this can’t all be so easy.
Well, it is. And then it isn’t. See, in order for this technique to be worthwhile, you must pay your credit card bills on time. And you must pay them off completely. See, the interest that you may possibly accrue by leaving a balance each month can potentially cost more than the value of the points that you would possibly receive. And if that happens, then you’ve really done yourself a disservice.
Let’s do the math…again.
The APR rate on my JetBlue Plus Mastercard is 17.24%. If I charge $2,276 to the card and do not pay it off at the end of the month, I will be assessed an interest fee of $392.38. That’s an additional $392.38 that could have gone towards a flight ticket to anywhere. But instead, it would be going towards interest. That’s not good at all! If I do pay my credit card bill on time, Instead of owing interest, I will be awarded 2,276 points, which is about $22.76 of free money that will go towards a ticket to anywhere JetBlue flies.
I don’t know about you. But I’d rather be paid $22 than to owe $392. Especially when the money adds up, either way. At the end of the day, if you can’t afford to pay for it in full, don’t buy it at all. At least, not with your credit card.
But if you can afford to pay in full, use your credit card (the one with travel rewards) and be rewarded for just paying your bills!