Next May I’m taking my wife to Fiji for a big wedding anniversary. The round-trip flight is normally close to $2,000 from my home airport, so I must be a big spender, right?
Nope, we have just been using the right credit cards. I’m paying a couple hundred bucks.
In December I’m driving from Florida to Virginia to see family and will stay in decent hotels along the way there and back. I won’t be paying for them though because, you guessed it, I’ve been using the right credit cards.
Have you ever added up how much discretionary spending you do each month that you could put onto plastic, or how many automated bills you could pay each month via a card you’d pay off instead of it coming directly from your bank account? You could end up with a long list of travel perks just by picking the right travel rewards card.
Here’s a quick rundown of what you could be getting if you’re not already playing this game.
Free Flights and Better Airlines
Flying is no fun, especially if you’re stuck with the unholy U.S. trifecta of Delta, United, and American. They’ve all turned to a culture of hateselling where you either upgrade or are made to feel like cattle. These airlines make more profit from fees now than they do from selling flights, so they’ve turned us all into a cargo play, with our luggage contributing more to the bottom line than our warm bodies.
So why pay for that if you can avoid it? Best of all, why fly with them at all if you can use their miles to go on a superior carrier like Singapore Air, Qatar Airways, Thai Airways, Turkish Air, or Copa Airlines? I love to bank United miles and then use them for a better Star Alliance partner. You can do the same with Delta (Skymiles) or American (OneWorld). In other words, you may get a 40,000 or 50,000 mile sign-up bonus from a credit card affiliated with American, enjoying the perks that come with it like priority boarding and a free checked domestic bag, but you can use the points for a flight you’ll actually enjoy on a partner airline.
That Fiji flight I was talking about will be on AA to Los Angeles, but then Air Fiji after that. I’m guessing the latter won’t be so stingy with food and booze. I’ve used AA miles to go to Chile on LAN and Europe on British Airways. I’ve used United miles to go to Peru on Copa and to Southeast Asia on Thai Airways and Singapore Air. Because I had the right credit card though, I boarded early.
Points for Hotel Stays
If you’re a road warrior who travels every week for business, you’re used to nice perks and free hotel nights for the family breaks because you bank so many stays. We normal working stiffs can still cash in on all that though by getting the right hotel reward card—or two. In many ways these are a better deal now than the airline ones since hotel chains get a far higher satisfaction rating than airlines and the points are not so difficult to cash in.
The hotel programs change a fair bit in terms of tiers, but the point structures are generally transparent and not full of gotchas. If you have 10,000 IHG Group points, for example, you can get an off-peak Holiday Inn somewhere and sometimes they run specials where it’s only 5,000. That range may also get you an extended stay hotel suite or the bottom tier category for the likes of Starwood, Hyatt, or Hilton.
Considering the IHG card I got last year gave me 75,000 points and the Hilton one I’m using right now got me 50,000, this is a terrific deal. In the worst case scenario, I blow the whole amount on a high-end Intercontinental or Waldorf-Astoria in peak season and get a $400 hotel room for an annual fee that often doesn’t even kick in until year two. On top of that, IHG gives you a free room night each year upon renewal.
This is before the perks even kick in. With most hotel credit cards you get a world of extras, such as late check-out, free Wi-Fi, and room upgrades. It’s a pretty safe bet you’ll get the best room available and not the worst.
You have to be smart about your spending to get the most from these affinity credit cards. First of all, if you build up a balance and pay 17% interest, it doesn’t take long for that to negate any “free flights” or hotels you’ve gained.
You normally need to meet a minimum spend level to get the hefty advertised sign-up bonuses. So if you’re getting 50,000 points or miles, you may have to spend anywhere from $2,000 to $4,000 in a space of two or three months. If you have to pay fees in order to do that (like paying rent or taxes and incurring a processing fee), then that shaves off some of the benefit. Ideally you get one of these cards when you’ve already got some purchases coming up you can put on it, like furniture, a vacation, or home renovations. I recently blew through the minimum easily on two of them while moving to a new address and buying three plane tickets to get there. Sometimes you see a “can’t lose” offer like this one, where you get automatic platinum status. Spend $1K, no annual fee first year, and you get two nights in any Hyatt hotel:
If you own a business where you are making a lot of regular purchases on credit cards, you should have a whole portfolio of these things in your wallet. Or you should be putting all your purchases on a multi-program award credit card that allows you to transfer points and top off your balance in airline or hotel programs. These include Amex Platinum, Amex Starwood, and Chase Sapphire Preferred. I’ve got to admit I’m too cheap lately to own any of these since they have hefty annual premiums and I’m not spending enough each month to get the most out of them. If I were going to sign up for one though, I’d go for the Chase one these days. I’ve had the Amex Platinum in the past for the airline lounge perks, but I reverted to the green card when those collapsed a few years ago. The green card still taps into the Membership Rewards program for topping off Delta or some hotel chain balances when I need it.
Whatever you do, don’t leave heaps of money on the table by using a credit card that’s not giving you major benefits. If you like to travel, using a card that doesn’t earn you any travel perks is like refusing a free lunch buffet when you’re super-hungry.