If you are like most students heading back to school this Fall, you have a lot going on. For many people, that includes studying for classes, extracurricular activities, hanging out with friends and Fall football games. But as Fall starts to wind down, you will start looking forward to visiting friends and family back home for the holidays. The problem with traveling is that it can be quite expensive. But, there are ways to save on your travel expenses, and your credit card (or future credit card) is a great place to start.
Many students have the assumption that a credit card is something that will get them into financial trouble and cause them to spend more money than they have. But, if you use a credit card responsibly, especially a travel rewards credit card, then you could actually save money by using it to spend on your Fall trips home. You have to remember one important thing, though: The only way to come out ahead when using a rewards credit card to save on travel is to always pay your bill on time and in full to avoid interest. If you can do that, then you literally get rewarded for spending money that you were going to spend anyway on your trip home.
Travel rewards credit cards earn rewards for every dollar that you spend, which can be used to offset any travel costs you have. Some of these cards reward you with “points,” while others offer you “miles.” They both can be viewed the same, because they are usually worth equal value. The basis for what they are worth is usually a return of 1 percent of the money that you spend on a travel rewards credit card. So for every $100 you spend, you will earn $1 in rewards. It doesn’t sound like much, but some travel rewards credit cards offer bonus rewards when you spend at certain places — sometimes double or even triple rewards. On top of that, various travel rewards cards offer you a discount when you trade your “rewards” in for travel purchases. Lastly, there are opportunities to earn reward bonuses when you open your account, and these bonuses can be worth hundreds of dollars in travel credit. So now that you know the basics of how to get free or discounted travel from a travel rewards credit card, let's look at some examples.
Venture from Capital One
The Capital One Venture Card is a great travel rewards card that makes things simple and easy. You earn double miles (2 percent back in rewards) for every dollar you spend. You also have the opportunity to earn 40,000 bonus miles ($400 in travel credit) when you spend $3,000 in the first three months of opening your account. You can use your miles anytime on any airline with no blackout dates. All you do is purchase your trip through any travel outlet you want and then use your miles to cover the cost as a credit on your statement. On top of that, you won’t pay any foreign transaction fees when you use your card to spend overseas. The only downside is that there is an annual fee of $59, but it is waived for the first year of your account.
There is a step down from the Venture Card, and that is the Capital One VentureOne Card. It earns unlimited 1.25 miles per dollar spent, and you can earn 20,000 bonus miles ($200 in travel credit) after you spend $1,000 in your first three months. All of this comes with no annual fee.
Both of these cards are Visa Signature Cards, which means you will also enjoy certain travel upgrades and savings, a 24-hour concierge service, extended warranties on items you purchase, travel insurance and special access to certain events.
American Express Premier Rewards Gold Card
The American Express Premier Rewards Gold Card is not just reserved for elite travelers. Anyone with a great credit score can take advantage of the travel savings it has to offer. To start out, you will earn triple points for every purchase you make directly from airlines, double points on gas, on groceries and at restaurants, and baseline points on everything else. You can also earn 25,000 bonus points ($250 in travel credit) when you spend $2,000 within the first three months of opening your account. And to top it all off, each year you will get a $100 AmEx airline credit that you can use toward any incidental charges you may incur (baggage fees, change flight fees, in-flight meals and drinks, etc.). You can use your points to cover any travel purchases you make, which means no blackout dates. You get access to the American Express Hotel Collection which provides upgrades and resort credits along with no foreign transaction fees. You can even transfer your points over to partnered airline frequent flyer mile programs at a 1:1 ratio. The annual fee is $195, and it is waived for the first year. You can get some great benefits along with this card such as travel insurance, extended warranties and presale ticket access to certain events.
Chase Sapphire Preferred
The Chase Sapphire Preferred Credit Card. You will earn double points on all travel and restaurant purchases, and the best part is that you can earn 50,000 bonus points (up to $625 in travel credit) when you spend $4,000 in the first three months after opening your account. When you book your travel through the Chase Ultimate Rewards Program you receive a discount, which stretches your points further (making 50,000 points worth $625). As with the AmEx Premier Rewards Gold Card, you can transfer points to partnered airline and hotel loyalty programs at a 1:1 ratio and take advantage of no foreign transaction fees when traveling abroad. The annual fee is $95 and is waived for the first year. You also get included benefits such as travel insurance, extended warranties and more.
A great place to see if any of these offers is being targeted toward you and your credit profile is the free-to-use CardMatch Tool. It has no impact on your credit score, and it can show you great offers available, like the ones above.
Now that you know some of the great travel rewards credit cards available, you can get the most out of your money on your next trip. Especially after a hard semester at school, it would be great to see friends and family and save some money in the process.
This article was written by Matthew Coan, owner of the Gainesville based personal finance website casavvy.com.
