I’ve Taken a Dozen Free Trips This Year Just Using Credit Card Rewards

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I have a hard time saying no to travel. When I am invited to speak at a conference, visit a client or want to take a family vacation, I usually just go. It's not even a tough decision for me because I never actually pay for my travel, at least not with dollars. Instead I use the points and miles I earn from credit cards to pay for it all. Here's how I do it.

5 Ways to Earn Enough Points to Travel for Free

As someone who's been studying the credit card industry for a living since 2008, one fact always amazes me. The credit card industry is incredibly competitive but also consistently profitable. This enables card issuers to constantly out-do each other in terms of offering customers the most generous rewards. This is especially true when it comes to points and miles that can be redeemed for travel.

When you maximize both the rewards you earn and the value you get for spending them, it's possible to travel for free almost all the time. And while there are many ins and outs when it comes to awards travel, there are a few basic steps to follow as you get started.

1. Sign Up for the Best Credit Cards

The best credit card offers give you points and miles worth at least $1,000 in travel rewards, just for opening a new account and meeting a minimum spending requirement. You can also earn bonus points for certain types of purchases such as travel, dining and groceries.

Every year, my wife and I both sign up for three or four new credit cards for both personal and small business use. We make our choices based on a combination of a card's welcome bonus and the long-term value we expect to receive from rewards and benefits.

As long as you manage your credit cards by paying your bills on time and not carrying any debt, having several credit cards will add positive information to your credit history and can improve your credit score. After trying a card out for a year, we then decide if it meets our needs before renewing the account and paying the annual fee.

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2. Use the Card That Offers the Most Points or Miles for Specific Purchases 

Most people tend to use the same credit card all of the time, but that strategy won't earn you the most points. Instead, I use whichever card offers me the most points within a specific category.

Alternatively, I use my Chase Sapphire Reserve® card to earn elevated Ultimate Rewards points for travel expenses, such as parking, tolls, rental cars, ride shares and transit. Just about everything else I buy goes on my Chase Freedom Unlimited®, which earns at least 1.5x Ultimate Rewards points per dollar on purchases.

Chase Freedom Unlimited®

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Secure application on issuer’s website

• Our Rating 4.5/5 How our ratings work
• APR19.99% - 28.74% (Variable)
• Annual Fee$0
• Sign Up Bonus 1.5%Extra Cash Back More Info

  Earn an extra 1.5% on everything you buy (on up to $20,000 spent in the first year) — worth up to $300 cash back. That’s 6.5% on travel purchased through Chase Travel^SM, 4.5% on dining and drugstores, and 3% on all other purchases.

We like that the card offers a high flat rewards rate but also provides accelerated rewards on some common everyday spending categories. You’ll also get access to the Chase Travel^SM portal, which allows you to use your cash-back earnings for travel rewards, gift cards and more. If you make this your primary card for most purchases you can quickly rack up a lot of rewards.

• Overview
• Pros & Cons

Overview

The Chase Freedom Unlimited card is unique for a couple of reasons. First, it comes with purchase protection and extended warranty protection you don’t see with some other cash-back cards. Second, you earn cash back in the form of points and when paired with another annual-fee earning Chase product, you can get even more value if you love to travel by transferring to partners.

That’s because while the Freedom cards are marketed as cash-back credit cards, they actually offer points. You can use those points to book travel through Chase at a rate of 1 cent per point. But if you have the Chase Sapphire Preferred® or Chase Sapphire Reserve®, you’ll get 25% and 50% more value on those travel redemptions, respectively. (Plus, the ability to transfer your points, too.)

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Pros

• No category bonuses to remember; earn at least 1.5% back on everything
• No annual fee
• Generous travel and purchase protection benefits

Cons

• Can't transfer Chase points unless paired with another annual-fee Chase product

Chase Sapphire Reserve®

Apply Now

Secure application on issuer’s website

• Our Rating 4.5/5 How our ratings work
• APR21.99% - 28.99% (Variable)
• Annual Fee$550
• Sign-Up Bonus 60,000Chase Ultimate Rewards Points More Info

  Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. Dollar Equivalent: $1,380 (60,000 Chase Ultimate Rewards Points * 0.023 base)

This card features an annual credit for travel purchases, which can offset the annual fee, plus bonus points when you sign up. You'll also get free access to tons of Priority Pass lounges and restaurant options around the world, along with access to the Chase Sapphire Lounge network.

• Overview
• Pros & Cons

Overview

If you’re looking to elevate your travel experience, look no further than the Chase Sapphire Reserve. When you first get approved, you’ll earn a generous sign-up bonus that can be used for travel-related spending booked through Chase Travel℠. Transfer the points to one of Chase’s airline or hotel partners and they’re potentially worth even more.

Pros

• An array of premium travel perks including access to Priority Pass lounges
• Easy-to-use $300 travel credit that helps offset card's annual fee
• Generous rewards rates for spending

Cons

• High annual fee may be a deterrent for some
• Perks are starting to get stale relative to newer competition

3. Charge Everything You Can to Your Cards

There's no doubt that credit cards are my preferred method of payment, and I will always pay with a credit card before writing a check or using cash. For example, I recently used my credit card to purchase a used car from a dealer. They initially refused to accept my card, as it incurred additional costs, but I got them to reluctantly agree after I made it a condition of the sale.

I also pay my mobile phone, electricity and water bills with my credit card, along with all of my retail purchases. This allows me to rack up points on spending that I would be doing anyway.

4. Get the Maximum Value From Your Rewards

All reward options aren't created equal, and it's important to redeem your points and miles for the best possible value. In general, avoid redeeming travel points for gift cards, merchandise or cash back. You're unlikely to ever get the highest value with those options.

Instead, the best value often comes when you transfer your points to another program. I often receive several cents in value when I transfer Chase Ultimate Rewards points to Hyatt, versus the 1-1.5 cents per point value I'd get otherwise. I've also received several cents in value from my American Express Membership Rewards points transferred to airlines for business class flights. In fact, I sometimes receive great value from United MileagePlus, even for economy class flights to destinations like Hawaii and Costa Rica.

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5. Always Look for Promotions

Airlines, hotels and credit card issuers are always offering creative ways to earn bonus rewards. American Express, for example, occasionally offers bonus points for referring friends or enrolling in "Pay Over Time" (which I never actually use). I also register for dining and shopping rewards programs that give me extra points and miles for the purchases I make anyways. And I always ask card issuers if they're willing to give me a "retention bonus" before I renew my card every year.

Why You Need a Rewards Credit Card

If you're not using a decent rewards credit card, you're likely missing out on valuable travel benefits. These cards basically earn you money with the spending you're already doing. By leveraging your credit cards to earn points and miles, and then maximizing those rewards, you can find yourself traveling for free even sooner than you might have thought.

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