While I’m hesitant to post any sort of financial advice, I constantly get asked “How do you afford to take all these trips?” So I want to share what I’ve learned the past few years.
Credit cards allow me to travel, but not because of their nearly-endless monetary limits. Because of their reward programs.
I was raised to save half of whatever I made at any job, so I’m pretty disciplined when it comes to saving for an upcoming trip or expense. I also started earning credit early on, as an additional name on my parents credit card.
The most important thing to remember when using a credit card, is to forget you’re using a credit card. Treat it exactly like a debit card and don’t ever charge more than what you have in your bank account. Not even on vacation. That’s a hard and fast rule I live by, which is why I keep a high credit score and stay out of debt.
Once you’ve mastered not overspending just because you have a credit card in-hand, it’s time to focus on rewards. Not all reward programs are created equal. Some charge a yearly fee, some make you spend a certain amount of money in the first few months to get your bonus points, etc.
Research which credit card works best for you. For me, Chase Sapphire Prefered is perfect because it allows me to transfer points or make a reservation for almost any airline or hotel. It is by far my favorite card I’ve applied for. Keep in mind that you usually only get a big bonus once, but you’ll still earn rewards as you continue to use the card.
I do not recommend closing your account as soon as you use your rewards. That’s a quick and easy way to hurt your credit score. Instead, I like to put a few things on it each month- maybe groceries or gas. This way my card is still active and as long as I pay it off each month, I stay in good standing and don’t incur interest.
Because of credit card rewards, I’ve stayed in countless hotels, booked rental cars and flown across the county for free. That being said, I never let myself go on a trip unless I have an adequate amount money in my bank account.
Below are a few other great reward programs. I am absolutely not recommending that you go out and apply for them all. Start with one, and use it to earn bonuses on things you’d already be purchasing. Then most importantly- pay it off!
The great thing about travel credit cards, is they oftentimes don’t charge fees for foreign purchases. That’s a huge plus for any traveler.