With summer upon us and your thoughts wandering to visions of paradise, have you questioned how to save money on expensive trips? Major travel expenses like airline tickets, hotel nights and rental cars can push trip costs into the thousands. Travel credit cards are an excellent way to save money while traveling and improve your entire vacation experience. However, no single card is perfect for every traveler. Let’s review the factors that set some cards apart and how to find the best card for your travel plans this summer. So what kinds of rewards can you earn with top travel credit cards?
Unlike cash back credit cards, travel card bounties typically come in the flavor of rewards points or miles. You will earn points or miles for every dollar spent, and some cards offer additional rewards for spending in specific categories like hotel accommodations or restaurants. To choose the best card for you, it’s important to know your major spending categories. For example, a card may offer 3x points for travel and dining, as well as 1 point per dollar spent on everything else. Unless you spend a considerable amount on travel and dining, a different card that offers 2x points on all purchases might help you earn more rewards.
One example we can look at to illustrate rewards differences is if you spend $4,000 per month on a credit card and are also planning a $5,000 trip this year. You could earn 3x points on $5,000 of travel spending and 1x points on $48,000 of monthly spending for a total of 63,000 points that year. However, earning 2x points on your entire budget with a different card nets you 106,000 points. That’s over two-thirds more rewards for using another card!
Types of Travel Cards
Now that you know how to earn rewards, the next step is examining types of travel credit cards. Travel credit cards feature two main categories of rewards options—co-branded versus generic.
Co-branded cards bear the name of specific airlines, hotels or rewards programs and often have strict rules for redeeming points. For example, you may be limited to redeeming rewards with the card issuer or their program partners. While co-branded cards are less flexible for where you can spend rewards, they often come with other perks. Some cards allow you to get priority boarding, avoid baggage fees, earn double points on brand purchases or have annual discounted hotel stays.
Extra perks can help you feel like a movie star on your next trip, but rewards on other spending like groceries are often less with co-branded cards. If a co-branded card sounds appealing, we recommend checking out how to use multiple cards across all your spending to maximize rewards. Aligning your purchases with credit cards that offer the best reward for each spending category can help you earn more bonuses. Whether you’re using a travel card to earn 3x miles on your next ticket to Maui or buying groceries with a 2% cash back card, researching the best card for each of your major spending categories pays off.
Compared to co-branded travel credit cards, generic cards offer more flexibility and are not tied to a specific travel company. Generic cards may be used for any airline, hotel or cruise without requirements for redeeming your rewards with a specific brand. This is a great option for people who aren’t committed to a single frequent flier program, loyal to any particular airline, or always stay at the same resort. With a generic card, you can choose travel options that fit your itinerary, even when surprises pop up (like missing the last boat for the night and being stuck staying in the hotel across from the dock, don’t ask how we know). If a generic card fits your style, check out whether your card of choice offers valuable perks like trip cancellation or rental car insurance coverage. Co-branded cards are not the only plastic with awesome perks.
Evaluating Card Benefits
Once you narrow down your travel card options, evaluating other benefits like sign-up bonuses, low annual fees and higher value rewards can help you make the best choice.
Sign-up bonuses can be worth hundreds of dollars and may be the deciding factor between two cards.
Annual Fees offset rewards. You will need to assess if your spending level justifies the potential benefits from higher fee credit cards.
Point Valuations determine how much you get from your reward points. A point on one card or a specific reward option might not be as valuable as rewards offered by another card or different redemption choice.
When you’re thinking of backpacking through Yosemite or hiking up to Machu Picchu, travel credit cards are a great way to save money on your next trip. Credit cards are valuable tools, but it’s also important to use credit wisely and be wary of carrying a high-interest balance. We recommend reaching out to a Merriman advisor if you have questions about credit, spending, or other ways to enhance your finances. We are here to help and offer guidance throughout your financial journey.
A lot goes into planning a great trip – choosing flights and hotels, making sure you have all the necessities, finding a house sitter, etc. Personally, I’m never able to relax and enjoy the trip until I’m on the flight to my destination. I’m always worried something might go wrong, and some unforeseen circumstance may force me to cancel all or part of the trip.
By the time you get to the airport, you’ve usually spent a good chunk of money that’s not refundable. If you have to cancel last minute, you miss out on the trip you’ve been looking forward to for months, and you lose the money you spent so far. (more…)
Before traveling, it’s a good idea to figure out what your health insurance covers in case you have to make an unplanned visit to the hospital. Also, if you rent a car while traveling, the rental agency will ask if you want to buy rental car insurance, so it’s good to know whether you need it. Understanding how and where your health and auto insurance extend when out of town is important, especially if you want to avoid being on the hook for a big bill. First things first, though – make sure you travel with your healthcare insurance card for you and your family members, and bring proof of auto coverage. (more…)
Client review meetings always give me something to look forward to. Not only do they present an opportunity to ensure we are on track for meeting the client’s financial goals, they also give me a chance to find out what is new in the client’s life.
I especially love hearing about the travel adventures of my clients – everything from the destination and local sights to the food and the culture. For me, it is a great opportunity to learn about new places and always gives me new ideas for my own dream vacation list. I only wish I could share this information with other travel seekers. Fortunately for my clients, I am busy working on their financial plans, and putting together an archive of travel information is not something I have time for. The good news is there are plenty of websites that have already taken care of it.
Frommers is a great place to start. The website has an interactive map of the continents which lets you narrow in on specific destinations. Once you’ve found the place you’re looking for, it offers an array of helpful information, including suggested itineraries, organized tours, and suggestions for restaurants and hotels.
TripAdvisor is another great resource to consult in addition to Frommers. The thing that makes TripAdvisor stand out is its ability to create community around travel. There are thousands of reviews covering everything from activities to restaurants and hotels. There are also forums that allow you to interact with other travelers who can help answer your questions. This site will help you cut through the weeds and create a trip worth remembering.
Once your trip is mapped out, make sure your itinerary is organized. The last thing you want to do is miss a flight or be late and lose out on a hotel reservation. This is where TripIt comes into play. Simply email your confirmation emails to TripIt it will build your itinerary for you to print or access from your mobile devices.
A few other quick mentions:
1) Travel blogs: Once you have a destination in mind, search for blogs that cover it. You can sort through older posts and be alerted when new content is posted. All in all, it is a great way to get “in the know” on your destination.
2) For privately-owned accommodations: try Airbnb and VRBO
Our job at Merriman is to help you invest wisely, freeing up your time so you can focus on living fully.
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