How to Save Money to Travel: Credit Cards (Part 2)

January 23, 2020

Tips and Tricks

Tips and Tricks

If you want to travel more, one of the best ways to do it is to take advantage of credit card rewards points and mileage programs. Properly using credit cards is an incredible way to make it so your everyday expenses can pay for your future trips. It kind of feels like winning the travel game. So now that you’ve changed your mindset and are prioritizing your spending and saving for travel, we want to show you how you can use credit cards to help you travel the world.

how credit cards work:

Before reading the following section, know that we are not professional financial advisors, nor do we claim to be. Always consult a professional financial advisor when making financial decisions.

At some point since the invention of credit cards we’ve developed a fear of using them. It’s probably because debt is dangerous, but let me be clear, using a credit card doesn’t mean you’re going to be in debt. This is how a credit card works. You buy an item for $10. The vendor gets about 97% of that and the other 3% goes to the credit card company. You generally get some sort of cash back or “miles/points,” and depending on what card you’re using it’s typically an amount between 1 and 3%, but we’ll talk more about that later. So when you buy that $10 item, you get a charge on your credit card statement for $10. When that statement period ends on a predetermined day of the month, you then have until the close of the next statement period to pay off what you purchased on the previous statement period. If you pay it off anytime before the close of that statement period, then all is well. But if you don’t, then you’ll have to start paying interest at an extremely high rate. This is how people go into debt. They spend more money than they actually have and see their credit card limit as the amount of cash they have available to them. This is wrong. A credit card limit is simply the maximum amount the credit card company will let you spend before they cut you off. It has nothing to do with your ability to actually afford the items you’re buying.

Again, let me reiterate. If you see your credit card limit as cash, you will most likely end up getting into credit card debt.

I know that sounds scary, but here’s what to do instead. Set a reminder on your phone or computer or on a sticky note on the fridge to pay your credit card bill every single week. Pay the entire card off every week and be aware of how much money you have in your checking account. If there is no money in your checking account, then there’s no money to pay off your credit card. If you follow these principles, you will not go into credit card debt.

Why wouldn’t you just use cash or a debit card? You can, but if you use a credit card, you’re getting 1-3% of your money back every time you make a purchase. That’s essentially a permanent discount. We have optimized our card usage to get both points and miles for travel and cash back to save money. Just last year, we earned well over $3000 of cash back or equivalent value in points and paid for flights to the Philippines, Barcelona, and Egypt exclusively on points.

Here are the three cards we use every single day:

THE BEST CARD IF YOU’RE LOOKING TO SAVE:

American Express Blue Cash Preferred: The Blue Cash Preferred is an amazing card. It is purely for cash back purposes, and it is well worth the $95 annual fee, because the cash back values are so high. This isn’t a travel card, so we don’t recommend taking it with you while you travel abroad.

  • Pros:

    • 6% cash back at grocery stores (up to $6,000 a year)

    • 6% cash back on streaming subscriptions

    • 3% cash back on transit (rideshare, parking, tolls, buses)

    • 3% cash back at U.S. gas stations

    • 1% cash back on other purchases

    • Other cash back opportunities

    • Easily obtainable sign up bonus

      • Earn $250-$300 after you spend $1000 in the first three months

  • Cons:

    • Foreign transaction fees

    • $95 annual fee

    We do have a referral link for this card that allows you to get access to a $300 spending bonus as opposed to the standard $250 bonus. It also helps us out, because Amex sends us a little kick back as a thank you for referring their card at no cost to you. 

THE BEST PREMIUM TRAVEL CARD:

Chase Sapphire Reserve: The Chase Sapphire Reserve is often referred to as the ultimate travel credit card. If you travel often, it’s worth it to have in your wallet. It is full of perks like baggage, car rental, and trip interruption insurance, and it earns a lot of points. When you use the Chase Ultimate Rewards portal to buy flights (which is powered by Expedia and super easy to use), you get 1.5x the value. For example, 50,000 points would buy you a $750 flight. We use this card every time we book travel or eat out.

  • Pros:

    • 3% points back on travel (4.5% when used toward travel)

    • 3% points back on dining (4.5% when used toward travel)

    • $300 annual travel credit

    • Global Entry or TSA Pre-Check credit

    • Complimentary Airport Lounge Access with Priority Pass

      • This alone is a game changer in our opinion. It makes the entire airport experience significantly easier and just think of all the money you’ll save on airport food.

    • No foreign transaction fees

    • Various types of incredible insurance like car rental and lost luggage insurance

    • 50,000 bonus points after you sign up and spend $4,000 in the first 3 months (that’s $750 in travel!)

    • Lyft Pink Membership and 10x points back on Lyft rides for at least one year

    • Dash Pass Membership from Door Dash for a year and $120 of Door Dash credit

Cons:

  • $550 annual fee

    • It’s essentially $250 after you get your $300 credit. We make all that back and much more each year. Plus, this year they’re offering perks like 10x back on Lyft rides and free delivery with Door Dash. In our opinion, if you take advantage of all of the perks the Chase Sapphire Reserve offers, it’s well worth the annual fee.

 

THE BEST CARD IF YOU WANT A LITTLE OF BOTH:

 Capital One VentureThe Capital One Venture is what we use for everything else not mentioned above. It gets us a flat 2% back on everything. The best part about this is that the points are incredibly easy to redeem. Rather than waiting for a good opportunity to purchase a flight with points, like some travel credit cards, you can simply use your miles to erase old travel purchases. I find their definition of “travel” is rather broad, and in addition to plane tickets and hotels, it also includes things like Uber, Lyft, and other public transportation. I put this under “both” because although it’s a travel card, the miles are pretty much as good as cash. 
  • Pros:

    • 2% back (when used to erase travel purchases) on all purchases

    • $0 annual fee for the first year

    • No foreign transaction fees

    • Rental car insurance and other travel benefits

    • Earn $500 worth of miles to erase travel purchases if you spend $3,000 within the first three months of opening an account

  • Cons:

    • $95 annual fee after the first year

We have a referral link for this card that helps us out if you decide to go with this card. Capital One sends us a little kick back as a thank you for recommending new credit card holders at no cost to you.

Here are some other great credit cards and some of their perks:

The first travel credit card Sam ever got was the Gold Delta SkyMiles card! We absolutely love flying Delta and skyline loyalty is something worth considering when you’re choosing travel credit cards. If you’re loyal to an airline and use their credit card, you get perks like free upgrades, lounge access, etc. We chose Delta because we’ve never been disappointed with their quality or customer service, and we always recommend it to our friends and family. We recently upgraded to the Platinum Delta SkyMiles, because we were about to fly to Spain on Delta, and it was going to cost us $60 each way to check a bag. The card gives us free checked bags, and it also offers an annual companion pass. The free checked bags and the free companion plane ticket will more than makeup for the $195 annual fee.

    • Pros

      • First checked bag free

      • One annual companion pass

      • No foreign transaction fees

      • Airline loyalty perks

      • Main Cabin 1 priority boarding

      • Baggage insurance

      • 35,000-75,000* points plus $100 statement credit when you spend $1000-$3000 in the first 3 months

      • 1x miles on all purchases

      • 2x miles on Delta purchases

      • After January 30

        • 2x miles at restaurants and grocery stores

        • 3x miles on Delta purchases and hotels

        • $100 TSA Pre-check/Global Entry Credit

    • Cons

      • $195 annual fee (to increase to $250 after January 30)

*We have a referral link for this card that helps us out if you decide to go with this card. It also gives you the 75,000 point offer as opposed to the standard 35,000 point offer. Amex sends us a little kickback as a thank you for recommending new credit card holders at no cost to you.

SOUTHWEST RAPID REWARDS CARDS:

 It is possible to get both a business and a personal card and if you time it right, you can end up with 125,000 points or close to it. That’s a big deal, because Southwest gives you a companion pass for the remainder of the current year and entire following year if you hit 125,000 points. Imagine all the free flights you could take with the companion of your choice!
 

We have a referral link for these cards that helps us out if you decide to go with this card. Chase sends us a little kickback as a thank you for recommending new credit card holders at no cost to you.

WORLD OF HYATT:

If you’re interested in picking a hotel loyalty credit card, the Hyatt isn’t a bad option. You can get 25k points after spending $3,000 in the first three months, which can be redeemed for five nights in the lowest level Hyatt hotel, for one night at one of the more luxurious Hyatt hotels, or somewhere in between. This also comes with one free anniversary night at any category 1-4 Hyatt Hotel. If you opt to go this direction, we recommend having a friend or a spouse get one as well so you can combine your anniversary nights and make an annual weekend out of it.
 
We have a referral link for this card that helps us out if you decide to go with this card. Chase sends us a little kickback as a thank you for recommending new credit card holders at no cost to you.

 Other beginner cards:

If you’re no longer interested in paying for the Chase Sapphire Reserve or Preferred, consider downgrading to the $0 annual fee Chase Freedom. Every quarter, the Chase Freedom offers 5% cash back on rotating bonus categories, like gas stations, department stores, cell phone bills, grocery stores, etc. These points can then be transferred to a Chase Sapphire Reserve account (if your “family member of the same household” has one) where they can be redeemed for 1.5x their value or (7.5% of the initial purchase). Not too sure you have good enough credit for a premium card or don’t want to spend on an annual fee? This is a great beginner card. 

It also gives you $200 once you spend just $500 in the first three months.

We have a referral link for this card that helps us out if you decide to go with this card. Chase sends us a little kickback as a thank you for recommending new credit card holders at no cost to you.

BLUE DELTA SKYMILES CARD:

This is a great card for beginners as it has no annual fee, but you’re still able to earn 10,000 points after spending just $500 in the first three months of having this card. It’ll earn you 2x miles on Delta and restaurant purchases, and after January 30, 2020, it will have zero foreign transaction fees, which is a must for travel!
 
We have a referral link for this card that helps us out if you decide to go with this card. Amex sends us a little kickback as a thank you for recommending new credit card holders at no cost to you. To access this link, click the link in the top left of the page to find the Blue Delta SkyMiles Card.
 

 Business Cards:

CHASE INK BUSINESS

Business cards are great for even people that are self-employed. This has great point bonuses for social media ad spending and utilities and perks like cell phone insurance, but the best part is the 80,000 point bonus offer if you spend $5,000 in the first three months. That 80,000 points is worth $1,200 when used in the Ultimate Rewards Portal, if you also have the Chase Sapphire Reserve.
 
We have a referral link for this card that helps us out if you decide to go with this card. Chase sends us a little kickback as a thank you for recommending new credit card holders at no cost to you.

 

Credit cards can be overwhelming! There are so many options, and it can feel really intimidating. If you have any questions about what direction you should take when it comes to credit cards, I’m happy to give you my opinion. They really are a great tool when used correctly! Take the time to educate yourself about how to earn and maintain a high credit score using a tool like Credit Karma. This will help you feel more confident in your use of credit cards, which will allow you get the most benefit out of them! We used to rely on these cards to travel more, but now that we’re full-time travel bloggers, we’re able to use credit card points as a supplement as opposed to being relied on for our travels.

NOW THAT YOU’VE SAVED MONEY FOR YOUR TRIP AND MADE THE WHOLE THING CHEAPER BY USING THE BEST CREDIT CARDS OUT THERE, FIND OUT THE BEST WAYS TO SAVE MONEY WHILE YOU’RE TRAVELING HERE!

 It’s been our mission since the beginning of Our Travel Passport to help people create memories. And being able to afford to travel is a huge part of this. Even the aspiring travel bloggers in our community who are working towards getting paid to travel should implement these techniques into their financial strategy. We’ve been getting paid to travel for a couple of years now and we haven’t let up on our money saving strategies. It’s key to sustaining our company and our lifestyle and that’s exactly what we intend to do! We hope you’ll join us!

 

If you’re interested in learning more about travel blogging or how to get paid to travel the world, check out our online course Passport to Travel!

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