The easiest way to travel for free is to have someone else pay for it. And that is exactly what we’re going to show you.
Airlines and hotels have partnerships with major banks that offer co-branded credit card products. Some banks issue credit cards with their own points programs that have even more flexibility for use. Perhaps you’ve heard of American Express Membership Rewards, Citi ThankYou points, or Chase Ultimate Rewards?
These credit cards typically offer you a signup bonus, much like you would get from signing up for a Kohl’s or Target credit card, where the stores provide you 10% off on your entire purchase on the spot. Instant gratification: cash in your pocket! However, if you have some patience and don’t need that immediate gratification, the bonuses offered on travel rewards cards have the potential to stretch a dollar even further.
That $20 or even $50 you just saved by signing up for a Target credit card pales in comparison to the 30,000 or maybe 40,000 bonus miles you’ll get for signing up for a mile-earning credit card. Those miles easily translate into $300, $500 or even more in travel (especially when you use the card and accrue more miles on everyday purchases).
Just like Target wants you to try out their credit card and build loyalty with their brand, American Express wants you to do the same thing with the Delta Skymiles credit card. Use the card every day, earn your miles and then redeem them with Delta. You get free travel for doing something you’d already do, and American Express and Delta win because they’ve built some brand loyalty with you.
Relationships are important and the loyalty associated with them is invaluable. If you’ve ever missed a credit card payment, that relationship you have with your creditor generally means they understand things happen and will apply a one-time courtesy credit of any fees charged. Even though they’re in the business of making a profit, they want to show you that they realize no one is perfect.
However, as important as loyalty relationships can be in terms of finances, we must always make sure to keep our credit portfolio strong and diverse. You wouldn’t put all of your investments in a single stock, would you? Diversity keeps us balanced and this balancing act is what really opens up the doors to free travel. Maybe instead of that single Delta American Express card, you also might carry a Chase Hyatt card. You happen to like Hyatt, you stay with them a few times a year and the card has a nice benefit that gets you Platinum status. Just as the Delta card allows you a free checked bag, the Hyatt card might get you a free night and other elite benefits.
Finding the cards and programs that work for you are a constant learning experience. What works today might not work in 6 months or a year down the road. You may find you’re flying often with Alaska Airlines or Southwest, and having one of their cards makes more sense for you. The possibilities and options are almost endless, limited only by how and when you want to travel.
The principle way card issuers determine eligibility is by obtaining your individual credit score. You see ads for these credit score services on the television every day. The three main credit reporting agencies are Experian, TransUnion, and Equifax. They each have their own separate model and method for determining your score, but the end result is almost always the same. The key determining factors in calculating your credit score are:
- Past credit payment history (always pay on time)
- Credit utilization (try to keep your balance at no more than 30% of your credit limit)
- Length of credit files (save your oldest credit cards always)
- Recent credit inquiries (too many inquiries suggests that the borrowers may need money in panicked situations)
- Types of credit (the best credit files have successful histories with installment, credit card, charge card and mortgage types of credit)
We’d be remiss to not include some important references up front so you can educate yourself, and grab your credit scores and reports (in some cases completely for free)
- Credit score for free: CreditSesame (Experian), CreditKarma (TransUnion) and Quizzle (Equifax)
- Credit report for free: (all three bureaus, once a year) AnnualCreditReport (Experian, Equifax, TransUnion)
- Credit Monitoring Services: ScoreSense.com, Triple Advantage, CreditReport.com, TrueCredit.com and Citi Identity Monitor
- Government and public references: FTC Statement on Free Credit Reports, myFICO on Credit Reports, Components of your FICO Score and Components of your VantageScore (read about VantageScore & FICO comparison too)
I carry five different credit cards in my wallet on a daily basis (Chase Sapphire Preferred, Barclaycard Arrival, American Express Platinum, Chase Ink Plus, Starwood Preferred Guest American Express Business). You may have more or less. These cards help me keep a well-rounded credit file and provide me benefits whenever I use my card, for whatever I have to purchase. And in addition to those five, I’ve got another 10+ at home and all three of my credit scores are excellent. Don’t believe it? Let’s dispel some myths, show a few pictures to prove it, and explain why these are the cards I carry in my wallet.
If you have questions about this or other topics, feel fee to email us.
Up next: Credit Myths and Facts
*Terms and restrictions apply.
More Rookie Guide:
- Introduction and Background
- Set Your Goals
- Points, Miles and Credits
- Airline Miles
- Hotel Points
- Rental Cars
- Bank Rewards
- Vouchers and Credits
- How Your Good Credit Can Help You Travel For Free
- Airline and Airline Alliances
- Hotels and Their Programs
- Program Partnerships
- Saving with Consolidators
- Priceline
- Hotwire
- Expedia Express and Others
- Double and Triple Your Bonuses with Online Shopping Portals
- Earning Without Even Thinking About It
- Rewards Network Dining
- Plink and Others
- Keeping Track of All Those Points and Miles
- AwardWallet
- FTG Wallet
- Spreadsheets Galore
- Review Your Goals
All Articles | Follow on Google+
Chase Sapphire Preferred® Card
- Annual Fee: $95 fee waived for the first year
- Foreign Fees: No
- Card Type: Bank
Add to Favorites
- Earn 50,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Chase Sapphire Preferred® Card
- Annual Fee: $95 fee waived for the first year
- Foreign Fees: No
- Card Type: Bank
| FTG Review | Reward Breakdown | Points Breakdown |
|---|---|---|
Breakdown
Earn (pt.)
Spend
First 3 months
50,000
$4,000
Travel Purchases
2.00
$1
Restaurants Purchases
2.00
$1
Coffee Shops Purchases
2.00
$1
Fast Food Purchases
2.00
$1
Alcohol & Bars Purchases
2.00
$1
All Purchases
1.00
$1
|
||
|
Already have this card? Maximize your rewards.
|
||
