According to a recent Credit Karma survey, over half of Gen Z respondents (54 percent) rely on credit card points and rewards to pay for travel expenses. Additionally, nearly half of Gen Z respondents (49 percent) use credit card “hacks” to maximize their points and rewards. It’s clear that Gen Z — along with frequent travelers across all demographics — has a strong desire to see the world but is looking for creative ways to save money.
Inspired? Here’s how to book your dream vacation using points.
Understanding Points Programs
There are three main categories of points and miles: hotel loyalty program points, airline frequent flier miles, and credit card points. There’s a lot of overlap between these categories, so knowing what you want from a rewards program is important.
Hotel points and airline miles work in similar ways. You earn a certain number of points per hotel stay or flight. Most hotels and airlines also have co-branded credit cards, and when you use these credit cards, you will earn points or miles toward that loyalty program.
In contrast, general travel rewards credit cards offer points or miles that can be transferred to multiple airline and hotel partners. Some of the leading issuers are Capital One, Chase, American Express, and Citi. You can redeem your points through each program’s respective travel portals or transfer them to get a better value out of your points.
Setting Your Travel Goals
To start, you need to know what your dream vacation actually is. Maybe it’s a stay at a five-star ski resort in the French Alps or a first-class seat to anywhere.
Once you know where you want to go and what you want to do, you need to start thinking about a points strategy that will fit your travel goals. “You should be thinking about your rewards card strategy from the start of the trip planning process,” shares Alev. “Look into the rewards that your current cards offer, which may lead you to realize that you need another card in your wallet that helps you earn more points.”
Ideally, every purchase you make will be on a credit card that allows you to earn points or miles. This rule has a few exceptions, like withdrawing cash at an ATM. Whether it’s the Delta SkyMiles Reserve Card, the IHG One Rewards Premier, the Chase Sapphire Reserve, or another popular travel credit card, each point you earn will help you reach your travel goals.
Earning Points
Before applying for a travel rewards credit card, you must review your spending habits.
In this scenario, you would want to use your Gold Card when you’re out to eat or buying groceries, but you’d use your Venture X when booking a hotel room. This way, you’re earning the most points per dollar on your spending.
If you’re getting a new card, do some research on welcome offers. If the card you want to apply for has had a higher sign-up bonus in the past, you might want to wait to apply until you see a similar offer. Welcome offers typically have a spending requirement that needs to be met within a certain time period.
The current welcome offer on the Capital One Venture X is 75,000 miles after spending $4,000 on your card in the first three months of account opening. In comparison, the Platinum Card by American Express has a welcome offer of 150,000 membership rewards points after spending $8,000 on your card within the first six months of account opening. Another great way to earn points is to refer your friends to cards you love. Cards will often give you upwards of 25,000 miles per referral.
Booking Your Dream Vacation
You work hard to earn your credit card points, so you want to maximize their value.
If you’re booking a once-in-a-lifetime trip, you don’t want to rush into anything. These kinds of trips take a lot of planning and should be thoroughly researched well before clicking purchase. When researching, use your credit cards to your advantage.
If you have a co-branded credit card, you should be searching for flights or hotel stays with the branded partner. If you have a general rewards card, you should be looking for travel with transfer partners.
Example Scenario
Let’s say you have always dreamed of staying in an over-the-water bungalow in the Maldives. This June, you can fly from Paris, France (CDG) to Male, Maldives (MLE), in business class on Emirates for 168,750 points, plus €1,409 in taxes and fees. You can transfer points from Capital One, American Express, Chase, and Citi to Emirates Skywards to book your flight.
On either end of your trip, you could enjoy baguettes and espresso in Paris. Fly from New York City to Paris round-trip in Delta One for as little as 182,700 SkyMiles when you use a Delta SkyMiles credit card. This same flight would cost around $2,900 when booked with cash.
Additionally, let’s say you are a cardholder of the Marriott Bonvoy Brilliant American Express Card, which gives you automatic Platinum Elite status. You decide to stay at the Ritz-Carlton in Male. Your suite is a one-bedroom villa with a private pool over the turquoise water. As a Bonvoy member, you get your fifth night free for every four you book. You stay from June 9 through June 14, soaking in the sun and living in luxury. This would cost you 364,000 points per stay. In cash, this same room would cost you $13,249, including taxes and fees. This gives you a fantastic valuation of more than 3.6 cents per point.
Covering your major expenses with credit card points is a fantastic way to take a dream vacation. In this scenario, we are using points from multiple credit cards, which helps if you’re worried about accruing hundreds of thousands of miles on one card.
