Dreaming about jetting off to the warm sands of Bali, or the historic streets of Paris or even enjoying the holiday magic in New York City, but your bank account doesn't exactly agree? The secret to affording your travel dreams might be lurking in your wallet right now without you even knowing.
Credit cards have a bad rap, and there is no argument that many misuse those little pieces of plastic. Paying interest and fees is not exactly a solid financial plan. However, with a bit of strategy, a credit card could be your passport to a new way of traveling.
Just the six of us
Between points, cash back and special offers, credit cards are as necessary to your travel strategy as a good guide map.
According to Jonathan Roisman, credit card expert at NextAdivsor.com, "Even though debit cards are touted as more financially responsible to use, debit card users miss out on a lot of free benefits that credit card users get, such as rewards, fraud protection and the opportunity to improve their overall credit score."
There are a few winners, six in fact, that when combined can offer you many different ways to travel for less.
Matthew Goldman, Co-founder & CEO of Wallaby Financial, and creator of WalletBoost, says that your travel credit card strategy boils down to one question, "are you loyal or not?"
If you are loyal, you have to work with what you have utilizing the points and programs for the cards that are already in your wallet. However, if you aren't loyal, then alongside a good credit score, you can really supercharge your travel budget.
#1 The Chase Strategy
Combining both a Chase Freedom and Chase Sapphire Preferred card can provide some serious rewards.
Chase Freedom offers 5% cash back rewards each quarter up to $1,500 for things like dining out, gas and online purchases.
Chase Sapphire Preferred is where you will find an amazing sign up bonus of 40,000 points after spending $4,000 on purchases in the first three months. Not to mention, earning 2 points on all travel and dining purchases. It is easy to score a free plane ticket without even blinking.
When you combine the points from the two cards together, you can utilize Chase's Ultimate Rewards programs to spend your points on just about anything travel related.
#2 Cash Back Strategy
Using the same Chase Freedom card, or the Discover it card, and pairing it with a lesser-known point powerhouse, Barclay Arrival Plus card, is a match made in travel point heaven.
Chase Freedom and Discover it offer the same great 5% cash back rewards option each quarter in certain categories.
Barclay Arrival Plus offers 2 points on every single purchase and 10% miles back every time you redeem for travel statement credits. You can book the travel you want and then redeem miles for a statement credit, giving you the choice of when and where you want to travel with a bonus. Barclay also offers a 40,000-point bonus after spending $3,000 in the first three months.
#3 American Express - The Old Standard
American Express cards have been in and out of fashion over the life of their credit card history. What they have done exceptionally well the last few years is strengthen their membership rewards program.
Just this month, American Express announced that they formed a partnership with Airbnb. Airbnb is a nemesis to the boring hotel room.
Through Airbnb you can rent a cottage in England, live like a local in Tuscany or escape to a private home in Hawaii. The choices are simply endless and the prices will blow you away - they are that good.
"When it comes to travel, our Card Members love unique experiences they can't find anywhere else," said Michael Rouse, VP & GM for Membership Rewards & Loyalty Experiences. "Travel is the most popular way our Card Members use Membership Rewards points, and our relationship with Airbnb gives them a chance to use points in a way that's truly one of a kind."
Use any American Express card and start building points. Those points can be used to purcahse eGift cards in $100 and $250 denominations good for any rental on Airbnb. Card Members simply redeem points at MembershipRewards.com, and then receive an eGift card via email that can be used to book stays directly with Airbnb.
There are many great credit cards out there and countless more strategies and tips.
As Goldman of Wallaby Financial pointed out, "It's not about just having a great card. It's about what you do with it. There are some cards that are better for how you spend your money. At the end of the day, it is all about finding the combination that will get you the most."
For more personal finance and lifestyle tips, head over to Everyday Finance.