How Credit Cards Changed the Way Our Family Travels
I’m about to lay out just how easy it is to get into the points and miles hobby for those of you who want to travel but don’t have a lot of extra cash laying around. This is a meaty post, but I promise you it is full of valuable information! And every step of it is something we have already tackled ourselves and that took us less than 1 full year to accomplish. From applying for our first card, to taking a 10 day International vacation. It’s all right here.
So if you’re ready to get away or to change the way you travel, keep reading!
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If you know anything about me, you know I love a good deal.
Scratch that. If you know anything about me, you know I love getting things for free. Yeah, free is always better.
I’ve pretty much mastered the art when it comes to toothpaste and shampoo (thank you extreme couponing). But last year I was introduced to something that totally upped my game. I’m talking about the next level of extreme couponing.
A co-worker introduced the idea of using credit card welcome bonuses to take our family on an amazing vacation for little to no cost.
So after hearing him out and realizing that this was totally legit and very similar to couponing in the sense that it took some preparation and some basic organizational skills, I was on board.
We signed up for our first credit card in October, the Chase Sapphire Reserve. The annual fee of $450 scared me (now $550) but I soon realized the perks that it came with would easily pay for itself.
The card reimburses you for up to $300 in travel spending each year which we hit pretty quickly (my husband travels a decent amount for work but really $300 could be 2 nights in a hotel or 1 plane ticket. Easy.).
It also reimburses you for one Global Entry application each year. Since my husband already had that I applied for it and was paid back the $100 fee within days. And on top of that you get access to Priority Pass lounges throughout the world which usually means a free meal at every airport we visit!
Ok, did you do the math? $450 annual fee, minus the $300 travel credit, minus the $100 global entry fee, minus a $50 dinner for two in an airport restaurant and your annual fee is paid for!
But what about the minimum spending requirement you might ask. This particular card will currently give you 50,000 bonus points if you spend $4000 in the first 3 months.
Ok, I realize that might sound like a lot. At least it did to us. But we put every, and I mean every expense we could on that card from the time it came in the mail and we were able to meet the minimum spend with time to spare.
I feel like this might be a good time to add that I DO NOT recommend this if you have credit card debt. If you carry a balance on your credit cards, I would hate to contribute to making it worse. This free travel I’m talking about will NOT be free if you’re paying interest on a monthly balance.
OK, I said it. I feel better. Let’s move on.
The first gives you 1.5 points for every dollar you spend on any purchase. The second has quarterly categories that give you 5 points for every dollar spent in those categories up to $1500.
When you use the 3 cards together you’re talking a lot of points. It’s the credit card trifecta if you will. And the best part is that these two cards have no annual fee and each rewards you with 15,000 points after you put $500 on the card. (UPDATE: the sign up bonus is now 20,000 points! Even better!).
How are we doing so far? Are you tracking?
So after meeting the spending requirement we received 80,000 bonus points plus the points we earned for spending. We had roughly 90,000 points with just those 3 cards. That’s equal to about $1350 to spend on travel if we book through the special Sapphire Reserve portal. All for spending money we would have spent anyway!
Are you intrigued yet??
But I’m not done. After fully immersing ourselves in the Chase Ultimate Rewards system it was time to work towards another Holy Grail in the credit card points game, the Southwest Companion Pass.
Breaking down the Southwest Companion Pass
You can read a thorough explanation in this post about How to Earn the Southwest Companion Pass. But here is a quick breakdown.
The Companion Pass is one of the most valuable achievements in the points and miles world. It allows you to book any flight that Southwest Airlines offers and then book a flight for your named companion for FREE.
Ok, you have to pay the taxes but they are usually as low as $6 for a one-way flight. But the flight itself is FREE.
It felt too good to be true, but it’s true! There are only 2 ways to qualify. Either you fly 100 one way flights or earn 125,000 miles in a calendar year.
OR you take the short-cut with sign up bonuses.
So of course we took the short-cut. Because who doesn’t love a short-cut? Like baked potatoes in the microwave. Or Spanx instead of exercise. Same outcome, less work. 😉
In order to earn that many miles it takes signing up for both a personal Southwest card and a business Southwest card. The combined points earned from a personal card and a business card are enough to earn the companion pass. See this post for the current sign up bonuses.
The trick here was to sign up for these cards later in the year and wait to meet the minimum spending requirement in January or February. Here’s why.
When you finally reach the 125,000 mile mark and are awarded the companion pass, that pass is valid for the remainder of the calendar year AND the entire following year. So if you reach the threshold in February or March, you can use the companion pass for almost 2 whole years! Amazing, right?
And that’s exactly what we did. We signed up for the cards in November, began to work towards the spending requirement (Christmas helped), and then made sure that we didn’t finish until the beginning of the year. We received 100,000 miles from the sign-up bonuses, some more from the spending we did, and the rest from using the Southwest Rewards shopping portal and earning even more bonus miles.
After just 5 months we had over 90,000 Ultimate Rewards points and over 125,000 Southwest Airline miles. Not bad for a little strategic spending, huh? Then came the fun part… planning our trip.
How We Used the Points
Through Chase’s own travel portal you can book pretty much anything when it comes to travel. Hotels, flights, rental cars, experiences, you name it. But since we had so many airline miles with Southwest we chose to put all of our Ultimate Rewards points towards our lodging.
The hardest part of this whole process was choosing where to go. But after hours of research and several after bedtime conversations we decided that a trip to Costa Rica would be perfect for our family. Read all about our trip and our 10 day itinerary here.
We found the sweet spot in our family calendar, booked some really reasonable flights on Southwest (with points and our Companion Pass!), and found an adorable place with private ocean-front cottages on the Pacific Coast of Costa Rica.
When we finally had everything booked the first thing I thought was, “I CAN’T BELIEVE THIS WORKED!” And a short time later I thought, “Let’s start working towards next year’s vacation!”
4 Round Trip Flights: 16,926 miles per person = 67,704 miles redeemed through Southwest
1 Companion pass flight: 0 miles redeemed
6 nights lodging: 14,352 points per night = 86,112 points redeemed
There you have it. An entire family vacation (minus lunches and dinners) paid for with points earned by spending money I would have spent anyway. Seriously, I still can’t believe we pulled it off. Or that more people aren’t doing this!
And we didn’t quit there! You can read all about some of the places we’ve visited since, all paid for with points!
- Amor Arenal in Costa Rica
- Hyatt Andaz Costa Rica
- Dreams Macao All-Inclusive in Punta Cana
- Costa Rica Zip-lining excursion
- Hyatt Regency Orlando
But because I know what you’re probably thinking, here are my responses to a few questions I’ve gotten from friends.
Did signing up for all these cards hurt our credit?
Not at all! Like I said before, this game is not for you if you carry a balance or if you don’t trust yourself to pay your bills on time.
Actually, you can increase your score in the process because it shows banks that you can manage multiple lines of credit over a length of time.
Because I pay off my bills on time and don’t carry a balance each month I have actually seen our score go up since we started! Both of use have credit scores over 800!
How do you keep track of all these cards?
Even though I am a fairly organized person by nature, like most moms I’m juggling a lot at home. Between my kids school and sports schedules, our family finances, and what little is left of my social life, things have a tendency to slip through the cracks around here once in awhile.
So to keep the important information organized I created a Numbers document to keep it all in one place. I’ll explain that more in a little bit.
I also keep our family budget by using the “You Need A Budget” or “YNAB” program. It keeps all of my credit card and bank accounts in one place so I can easily track all of our spending.
You said you opened a business card. What if I don’t have a business?
The definition of business is not as strict as you might think. Do you sell anything on Amazon, ebay, Poshmark, or Craigslist? Ever rent out part of your home on AirBnB? These little side hustles are enough to qualify you as a small business.
I routinely sell clothing on Poshmark so I felt comfortable applying for a business card. And I have already been approved for 3 different business cards.
The most important thing is to not lie on your application! If you only make $100 a year selling things, than put that on your application. You can use your name as the business name and apply as a sole proprietorship. In the beginning the bank will use your personal credit history as a reference. So if you have been approved for similar personal cards in the past, you shouldn’t have a problem qualifying for a small business credit card.
My Tops 5 Tips for Using Point and Miles to Travel
1. Do Your Research
There is a wealth of information online when it comes to traveling with points. Two of my favorite sites to refer to are thepointsguy.com and millionmilesecrets.com. Both are loaded with credit card rankings, trip suggestions, and beginner guides to points, miles, airlines, and credit cards.
2. Check Yourself Regularly
As you start to work towards the minimum spending requirements for new cards it can be easy to justify purchases outside of your normal budget. If you have the money, great. But if this hobby is a temptation that will ultimately put you in debt, it ain’t worth it. Just ask yourself, “Would I have bought this before points were involved?” If the answer is “yes,” then go for it. If the answer is “no,” maybe put it back and wait until you’ve saved up enough to purchase it without regret.
Remember, the whole point of this is to earn travel rewards for things you were already buying!
3. Stay Organized
Once you have multiple cards open it can be somewhat of a juggling act to keep them all straight. I have found that using a budgeting app that lists all of your accounts in one place is really helpful for keeping track of account balances and due dates. I have tried several (I should probably write a post just on this topic… stay tuned for that) but the one I am currently using is You Need a Budget.
I also created an excel file to keep track of the following details:
Open date: This will tell you when the annual fee will be charged again. You will need to decide if you should close the card or downgrade to a no-fee card before the fee hits your account.
Annual Fee: Will help you to budget for the expense should you decide to keep the card. For some cards the fee is actually worth the benefits you receive at each card’s anniversary.
Minimum Spend: So you know what you’re working towards. For many cards it won’t be worth continuing to spend on that particular card past this amount.
Primary Cardholder: If you’re doing this with your spouse you can actually both open the same cards which means double the rewards. But keep track of which cards each person has opened and whether they are the primary cardholder or an authorized user.
4. Label Your Cards
If you have a label maker you can print on the label the places you should use each card in order to maximize the points.
For example, make a label that says “travel and restaurants” for your Sapphire Reserve or “Grocery Stores and Home Stores” for your Chase Freedom (or whatever the quarterly category is). I didn’t do this at first and I made a few mistakes because of it. So just take a few minutes and do it. You’ll thank me later.
5. Set a Travel Goal
Before you start, set a goal for where you would like to go. It will help you determine which cards to apply for and when.
For instance, if you’d really like to make a trip to Europe for your anniversary next year, I wouldn’t waste your time or money working on Southwest cards and rewards miles. Because they don’t fly there.
However, Chase Ultimate Rewards can be transferred to partner airlines like United Airlines or British Airways who do fly to Europe. Or you can try applying for a specific airlines credit card and banking the miles for that specific trip.
Well, there you have it. A crash course in points and miles brought to you by your frugal mom friend who still loves to get away. Hopefully this removes one of the barriers to traveling and making memories with your kids.
We took our first points and miles funded trip to Costa Rica and you can read all about it here.
Leave a comment below and let me know where your next vacation would be if money wasn’t an issue.
And don’t forget to subscribe to my email list so I can share stories and pictures from our trip to Costa Rica! That is, if I survive summer break with 3 boys (so many pillow forts and wet towels! But we’re making memories right? Please tell me yes.).
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