Saving money while traveling is great – but did you know there are ways to travel for free? As a teacher, I am always looking for ways to travel more on a budget. I’m constantly on the hunt for the next money-saving travel hack, and I’m always looking for ways to travel for free!
One of the ways I’ve been traveling for free, is by using travel rewards credit cards. I recently started using travel credit cards for business and personal travel, and it’s seriously one of the best travel decisions I’ve ever made. This was after experiencing a few hard life lessons, so I’m hoping this info will save you from making the same mistakes!
At this moment, I know nobody is traveling – but everyone is hopeful and looking forward to the summer. We are all waiting with anticipation to see if we can still enjoy our summer vacations. This is the best time to learn all of the travel hacks, tips and tricks to use for future flights.
In this mini-series of blog posts, I’m showing teachers ways they can travel for free.
Today, I’ll show you how to save money and travel for free using travel rewards credit cards.
Credit Card 101 – the Basics
My grandmother, bless her heart, was terrible with money.
One of our last conversations was her telling me how I should get as many credit cards as I possibly can – because they’re just free money, anyway!
For anyone new to credit cards, let me say this is not the case at all.
Credit cards are, essentially, DIY loans.
First, you find a credit card you want, and you apply for it.
Then, once you’re approved, the bank issuing the card gives you a credit line (amount) to work with based on your credit score at the time of your application.
Your credit score also dictates the interest rate they give you for that card. Poorer credit scores result in higher interest rates. Your interest rate decides the amount of interest you pay on top of the amount you borrow.
To keep numbers easy, let’s pretend you have a 25% interest rate. If you spend $100, and let that balance carry over more than one statement period, you’ll accrue interest. You’ll now owe $125 instead of just $100.
Now, if you were raised in an American Christian household like I was, you’ve likely grown up hearing the words of Dave Ramsey. You might even have a little voice in your head right now saying something like, “Abort! Abort! Credit cards are the devil! Stop reading this!”
Let me say I TOTALLY understand the hesitation. If you struggle to keep track of your money, and if you can’t carry lines of credit without maxing them out, then this travel hack may not be for you.
But if you can handle it? Having the right travel rewards credit card can save you so much money! And who doesn’t want to travel for free?
How Credit Cards Save Money
Having worked in the travel and tourism industry in a few different capacities, I can say with certainty that credit cards can be very helpful when traveling.
Here are some of the ways you can save money with travel credit cards:
- Using the “Pay Now” option for lodging (instead of paying then)
- Car rental deposits
- Hotel incidentals and fees
- Travel perks
- Lower exchange rates
- Fewer transaction fees
Let’s dig into each of these a bit more in-depth.
Pay Now Option
Many booking engines, like Expedia, sometimes allow you to book lodging, cruises, or car rentals at a lower rate if you pay for the total all at once. The alternative to this is paying a partial deposit at the time of booking, and the rest when you arrive.
If your destination is in a different country, this can also mean that you pay less considering the exchange rate. This is something you roll the dice with. Sometimes, the exchange rate is lower when you book your accommodations. At other times, the exchange rate is lower on your date of arrival. Usually, you save more by paying right then.
If I can save money (especially if it’s hundreds or thousands of dollars!), I’ll always choose to pay the total when booking. The right credit card can help with this, as we don’t always have hundreds or thousands in our checking accounts.
Car rental deposits
If you glean one thing from this blog post, let it be this: never reserve a car rental with your debit card! When I worked in customer service at a high-end resort, I can not tell you how many people would arrive frustrated due to a car rental.
When you reserve a car with a debit card, that amount is not just “authorized” or “held.” It is withdrawn from your account, and it can take several days (or even weeks!) to get it back after returning your car. Credit card authorizations are usually released immediately. Always use a credit card for car rentals!
Hotel incidentals and fees
The reason to use a credit card when checking in to a hotel is the same as when you are checking out a rental car. When you’re check in to a hotel, the hotel authorizes the entire amount of the hotel stay, plus an estimated amount for meals, activities, incidentals, or resort fees. It’s not uncommon to authorize an additional $100 per day on top of the hotel rate, especially at nicer resorts.
When you use a credit card, this amount is pre-authorized to ensure you have enough to pay for your stay. When you use a debit card, this amount is taken from your account right away. It can be a huge hassle to get it back! Please use a credit card for this. Save yourself from unnecessary stress!
On top of free flights and free places to stay when traveling, there are other travel perks that often come with travel rewards credit cards.
I once had the opportunity to stay in the Admirals Club lounge for American Airlines… WOW that was nice!! As a budget traveler, little things like free meals, good coffee, and a comfy place to rest can make your entire day. An airline lounge can also save you from spending during layovers.
Lounge benefits are a common perk for holders of certain travel credit cards, especially if your card has partnered with (or is from) an airline.
How Travel Rewards Credit Cards Help You Travel for Free
Having the right travel rewards credit card can save you a ton on foreign transaction fees, currency exchange rates, and withdrawn funds when paying for a hotel room or car rental.
And while saving money is great, free is even better.
Here are a few ways travel rewards credit cards can help you travel for free.
This may be the most obvious reason to get a travel rewards credit card – who wouldn’t want free flights?!
If this is your main reason for getting a travel credit card, I suggest that you apply for one with an airline you use frequently. You can then combine their frequent flyer program with any bonuses you receive from their credit card. Many airlines even offer bonus rewards for booking with them, so you can get 3 or 4 times the normal amount of points.
It’s important to mention that this may not work for you, if you choose airlines by whoever is offering the best deal. This is how I travel. I am constantly scanning my travel apps for the best deal.
If this is how you book too, I recommend applying for the Capital One Venture Travel Card. I’ll go more in-depth about this card in my next post, but I’ll say here that it’s been so helpful in earning free flights.
Within the first 3 months, I earned over 50,000 air miles!!!
The flexibility with redemption is really nice, too. I like that I have several partners to choose from, since I just pick whichever airline is offering the most affordable flight.
Free hotel stays
You can earn free hotel stays as well as flights with travel rewards credit cards. If this is your main goal, get a travel credit card with a booking company (i.e. Orbitz, Expedia, or Hotels.com), or with a global hotel chain (i.e. Marriott, Hilton, Hyatt or Radisson) that you like.
If you’re a member of a hotel chain loyalty rewards program, you can combine this with your credit card points to make them go farther for you. Many hotel chains will allow you to earn 3x or 4x the amount of points by booking at their properties.
Booking with points
Sometimes, travel rewards credit cards will offer you extra perks of free hotel stays, free car rentals, VIP meals at nice restaurants, and more for certain payment behaviors or spending milestones. This is huge, as you can save several hundreds (or thousands!) of dollars by paying with points instead of with dollars.
If you combine booking with points with paying for things you have due monthly anyway, you really make your bills work for you.
My husband and I spend about $1,000 per month on expenses (insurance, groceries, bills etc. – my rent is taken out of my check so I don’t see it!). I’m very thankful that our expenses are low compared to those of our friends and family. But even at $1,000 a month, one could easily start racking up some miles!
I already have 4 trips coming up that I’m not paying for.
And these aren’t trips with Traveling Teachers; these are personal vacations and getaways!
Travel insurance and trip protection
Many credit cards offer some kind of purchase protection.
Travel rewards credit cards often go a step further, offering protection for trips you book with their cards! This alone could save you hundreds or thousands of dollars per trip – and way more if the worst case scenarios happen.
Lower exchange rates & fewer transaction fees
This is something I learned the hard way; DON’T DO WHAT I DID! I wasted $600 on my first trip to Europe when I totaled the bank fees, hiked exchange rates and transaction fees. I did a few things wrong.
How I Wasted $600 on my First Trip to Europe
Sometimes, it’s just as helpful to have someone share what not to do, as it is to have someone tell you what you should do!
- Paid in U.S. Dollars instead of in the local currency. Never do this! Always pay in the local currency, even though it takes an extra second to do the math.
- Made several small cash withdrawals during my trip. I did this at the advice of another travel blogger. She lost $200 during a trip to Italy when she was mugged!! It made sense to me, as I never carry much cash at home in the States. So, I made a small withdrawal every day with my debit card. Huge mistake! Not only did I pay $3-5 to my bank every time I withdrew money; I paid an additional $3-5 to the bank managing the ATM! So much money wasted. While I will never recommend making a large withdrawal and carrying a lot of cash on you, I will say to always try to stay within your bank’s networks of ATMS if you must withdraw.
- Paid horribly high exchange rates. I hate paying with cash. If I had it my way, I’d pay for everything digitally and never deal with cash or coins again. However, this is just not feasible for certain items, and in many parts of the world. If you must get cash, withdraw from an ATM in your bank’s network, or within a partnership of your bank’s ATM network.
- Paid a TON of transaction fees. My bank debit card charged 35 cents for every purchase I made abroad. On top of that, I was charged $3 every time I tried to pay in my home currency! Those fees added up quickly. When I saw my statement after that trip, I vowed to never make those same mistakes again.
In my next post, I’ll be giving an in-depth review of the best travel rewards credit cards out there in 2020. Stay tuned for that!
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