Jet Around the World on Your Credit Cards' Dime

March 21, 2017

What’s in your wallet (insert Samuel L. Jackson or Jennifer Garner’s voice here—whomever you prefer)? Well, chances are you’ve got a whole bunch of plastic—your driver’s license, your insurance card, your King Soopers card…maybe even a relic Blockbuster’s Video card, if you’re lucky (#nostalgia). What we’re talking about today though, dear readers, is what most of us associate with the term “plastic:” credit cards. More specifically, reward credit cards.

Reward credit cards are the most popular by far. There are cards that offer cash back into a checking account or IRA, others that are retailer-specific (think Banana Republic and the like), and still others that offer airline miles. There are LITERALLY hundreds of different reward credit cards to choose from, each targeted to a specific type of spender and his or her goals.

The type of reward cards that travelers and their wannabes might be most interested in is the latter category mentioned above. In fact, did you know that if you’re able to accumulate enough miles or points on purchases, you could jet set to that secluded beach in Thailand that you’ve been eyeing for little to no money out-of-pocket? To sweeten the deal, many credit cards offer a generous bonus of additional miles if a minimum dollar amount is spent on the card within a specific time period.

This brings us to churners—those who readily take full advantage of credit card rewards. For instance, while the average person may have a few credit cards over the course of his or her lifetime, someone who’s a churner may apply for ten or more cards per year. Churners, therefore, are able to amass hundreds of thousands of points or miles, and use them to fly and/or stay for practically nothing just about anywhere in the world at the drop of a hat. Not too shabby.

If you’re interested in learning about reward credit cards for travel, you best Google that ish. Want to visit your friend in San Fran? You’ve got options. Interested in backpacking through Ireland next summer on a shoestring? That could happen. Are you a ride-or-die Hilton fan who just wants to experience a few free nights at your all-time favorite hotel chain? You’re covered there, too.

It isn’t unusual for reward cards to charge annual fees, so don’t be too surprised if you come across some in your aforementioned Google search. Before deciding to forego a card with an annual fee, however, do the math. For example, one popular card has a $450 annual fee, but a $300 annual travel credit. In other words, if you were to accrue $300 in travel-related expenses, the card would reimburse you for that amount, making the annual fee just $150 when all is said and done. The key learning here? Make sure that the card’s perks outweigh its fee—otherwise, move on to the next.

If you’re skeptical about all of this, we don’t blame you. Credit cards aren’t exactly known for giving away free vacations. Well not to worry—they’re still making money. In fact, Visa, Mastercard, American Express, and other major credit card companies take a percentage of the total purchase price from each transaction that’s completed with one of their cards (which the retailer pay—hence why your local coffee shop may very well still be cash-only).

For all intents and purposes, however, people who enjoy traveling but are limited on funds may find reward credit cards to be just the answer they were looking for. So, whether you’re looking for a little extra cash at the end of the month, a free trip home for Thanksgiving, or a discount at Banana, any one of the plethora (big word, huh?) of cards out there could be a good bet. Just proceed with caution.  

Have you earned any free or low-cost trips through credit card hacking? Chime in below!