Leveraging Credit Card Points for Free Travel
Let's talk personal and business credit cards
You know those people that are seemingly always on vacation? Bali in January, Cancun in March, Miami in June?
They’ve either got (A) great income, (B) lots of debt, (C) a sugar daddy, or (D) knowledge around credit card points and travel hacking.
We’re gonna talk about the last one today.
Leveraging Credit Card Points for Free Travel
Credit cards can be a slippery slope if you’re unable to manage them effectively (a.k.a. pay them off on time and in full). If you can, however, they’re an incredible tool to earn free travel.
Credit Card Points 101
Most credit card issuers offer rewards, ranging from statement credit, to bonus points, to exclusive access to events. They do this to incentivize you to use your credit card for purchases.
When you open a new card, they’ll often offer you a sign-up bonus, usually in extra points or statement credit. For example, the Chase Sapphire Preferred comes with a 60,000 bonus point offer if you spend $4,000 in the first 3 months after opening the card.
The key? Those 60,000 points are worth $750 toward travel purchases, or $600 in statement credit. 750 free dollars.
Redeeming Credit Card Points
💸 Keep in mind: This process – called travel hacking – has several other, more complex layers. There are a ton of ways to “game the system” here and make the most out of credit card points. This is just an intro.
When you want to redeem your points, you have 2 options: book through the credit card’s portal or redeem with a transfer partner. The latter will almost always get you more value.
Transfer partners are just that — merchants that allow you to transfer your credit card points to their system, often offering even more value for your points.
Here’s an Example
Let’s say you open a Chase Sapphire Preferred credit card. You have roughly 65,000 points.
You’re interested in booking a stay at Hyatt’s Andaz Costa Rica Resort in May. Your points inside the Chase portal are worth $824.
For the King Bed with Forest View, that would get you a 1-night stay, assuming you aren’t a member.
Now, if you transferred 63,000 of those points over to Hyatt, you could afford a 3-night stay and have points leftover. This is because, if you book with points, the room costs 21,000 points per night.
Suddenly, your $824 worth of Chase points became worth $2,421 worth in Hyatt points. Crazy, huh?
Now, this is just an intro. People redeem their points for insane value. Sometimes, these transfer partners will offer bonuses, giving your points an additional 30% in value when you transfer them over.
Back to Business Cards
Business credit cards can earn points, too. And because points aren’t considered taxable income, you aren’t obligated to redeem them for business use.
This means that you can rack up points for both business and personal then redeem for insane travel experiences. Here’s a list of business cards with good intro bonuses and transfer partners.
Like I said, this can get even more complex. I found visual breakdowns especially helpful when learning this.
Credit Card Recommendations
My current personal credit card stack includes:
Discover It: My first card; Great for beginners
Chase Sapphire Preferred; Great initial travel credit card
Venture X; My most recent addition, great for more value on travel purchases, but comes with a higher annual fee
For business, I use the Chase Ink Business. I picked it because I don’t have a ton of business expenses, so it didn’t make sense to go for something with an annual fee IMO.
When I move into a rental, I’ll be opening the Bilt Rewards Card – the only credit card you can pay rent with.
Before I open a credit card, I always compare the features on Nerdwallet’s Credit Card Comparison tool. It breaks down the benefits of each card side-by-side, which is super helpful.
me in Costa Rica after this
As always, 3 new opportunities for ya.
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See ya Friday,