When the world “re-opens” and it’s safe to leisurely travel again, many of us will be way overdue for a vacation (raises hand). As a frequent traveler who has used points to plan “free” or subsidized trips to over 25 countries, I thought it would be helpful to share some relevant tips on how to plan your next vacation using points, even if you are not a frequent traveler.

With losses estimated to be in the billions, some experts are saying that it will take years for the travel industry to recover.

But first, for those of you who are too wary to even think about a vacation in the middle of a pandemic, let me offer some quick insight into why this may be an opportune time to start PLANNING your next vacation.

The Challenge…

The COVID19 pandemic is taking a huge toll on the travel industry as a result of travel restrictions and government regulations which have brought non-essential travel to a halt. With losses estimated to be in the billions, some experts are saying that it will take years for the travel industry to recover. Despite the grim outlook, every cloud has a silver lining.

The Silver Lining…

It means that non-frequent travelers are uniquely positioned alongside frequent travelers to take advantage of perks and travel rewards normally reserved for frequent travelers as travel companies and brands aim to entice a broader customer base through credit card rewards, points and bonuses.

Historically tourism and travel companies focused heavily on rewarding their most profitable customer base —  frequent travelers. Rewards often included perks and travel “freebies” in the form of free flights and hotel stays, amongst other things, based on miles flown and/or hotel stays. However, with travel at a standstill and frequent travelers unable to earn miles or stays from traveling, this has actually leveled the playing field amongst frequent travelers and non-frequent travelers.

So what does this mean for the average person who travels once or twice per year? It means that non-frequent travelers are uniquely positioned alongside frequent travelers to take advantage of perks and travel rewards normally reserved for frequent travelers as travel companies and brands aim to entice a broader customer base through credit card rewards, points and bonuses.

The Opportunity…

Although travel is at a standstill, bills still have to be paid and online shopping is at an all time high so one thing that the pandemic hasn’t stopped is credit card spend. With this in mind, travel brands are upping the ante on the points and travel reward offers extended through credit card reward programs, which is good news for those of us who are stuck at home and eager to plan our next vacation.

Now before you get too excited and start buying things that you don’t need on Amazon it’s important to understand the tricks of the trade so that you get the biggest bang for your buck. Below, I’ve shared a few tips to help you plan your next vacation for “free” using points. To demonstrate how these tips can lead to huge savings when planning your next vacation, I’ve created two fictional characters, Savvy Shar and Foolish Fred who are both planning a vacation using points. Their stories include mishaps that I have experienced and insights that I have gained over the last 15 years as an avid traveler and explorer. Enjoy!

Also, if you are new to credit card reward programs or booking trips with points, here’s a quick intro into what some typical credit card reward programs offer.

1. Choose wisely. Understand your options by doing your research upfront. Pick a credit card that offers perks and rewards that are aligned with your interests and desired destination(s).

2. Don’t overlook fees or bonuses. Take advantage of sign-up bonuses and other offers, but don’t allow these items to blindsight you from the overall costs. Many cards offer a points bonus for meeting a minimum spend within a certain amount of days. Some even offer waived annual fees for the first year. Carefully review the card terms and conditions so that you understand the total costs and benefits associated with the card.

3. Not all points are created equal. Understand the true redemption value of your points. Because points can be redeemed for flights, hotel stays and even cash, you should consider points as a form of currency. In the same way that 1 Mexican Peso does not hold the same value as 1 US dollar, not all points are created equal. This is important to understand so that you are not misled by the nominal value (face value) of points. Instead, evaluate the value of what you are getting in exchange for the points in order to understand the true redemption value of your points.

4. It pays to be flexible. The more flexible you are the better. Sometimes even adjusting your travel plans by just a day or two can lead to big savings. Consider doing searches using the “my dates are flexible” feature or “view award calendar” feature to see which dates give you the most bang for your buck.

5. Don’t forget the “freebies”. Many credit card reward program benefits go to waste simply because people are not aware that the benefit exists. This is why it is important to read the terms and conditions associated with your credit card and points. Nowadays it is common for reward programs to include some form of travel protection, purchase protection, loyalty program status, free nights or even incentive rewards through partnerships with other companies (for example, the Chase Sapphire card has a partnership with Lyft and Door Dash, etc.).

6. Put all your “eggs” in one (or two) baskets. There is a minimum number of points needed before you can start redeeming travel perks. If you spread your points across too many different credit cards or programs you reduce the likelihood that you’ll have enough points to redeem something of value such as a free night stay or free flight.

7. Don’t spend more than you can afford. THIS IS THE MOST IMPORTANT TIP! If you aren’t paying your credit card balance in full or on time, the value of your points will easily be diminished by interest charges and fees. Check out this interest calculator to see how quickly interest charges add up over time.

Conclusion…

Of course nothing in life is really “free” but earning a free trip from money that you were already going to spend is about as good as it gets. I hope these tips help you spend wisely and get the most from your credit card spend.

If you want to check out the credit card that I use for my every day purchases, international travel and travel rewards, here’s the link to the Chase Sapphire Preferred card which I swear by!

What’s your favorite credit card reward program and why? Let me know in the comments below.

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