This is a guest post from Brad Barrett. He is a Certified Public Accountant, husband, and father to two lovely little girls. He is an avid traveler and through his site RichmondSavers.com he helps teach people to travel the world using rewards miles and points.
My wife and I absolutely love to travel, but as I’m sure you know, it is incredibly expensive to take a family of four on a significant vacation.
We knew if we wanted our girls to really experience the world that we’d have to come up with the most cost effective way possible, and after a lot of research we found the answer:
No, that’s not a misprint, I really said credit cards!
Before you think Lauren has gone crazy letting me guest post on ‘I am THAT Lady,’ let me explain:
The major credit card companies offer huge bonuses (often 50,000 miles/points!) to consumers to sign-up for one of their top rewards credit cards. Each of these bonuses can be turned into, on average, $500-$1,000 of free travel!
We found that if we opened up a few new credit cards each year and put our normal everyday spending on them that we could fulfill the bonus requirements for each card and earn a number of lucrative signup bonuses. We could then take those large signup bonuses and turn them into nearly free travel for our entire family!
Each card has a “minimum spending requirement” that you have to hit in order to earn the bonus. A general example would be to “Spend $3,000 on the card in the first 3 months from account opening.”
In this case you would:
Since you’re paying it off on time and in full every month, there is no interest expense at all. The annual fee is waived the first year on most of these cards, so you really can earn these bonuses for $0 out of pocket.
Keep in mind – This is credit card related so it is NOT for everyone.
My wife Laura and I are both CPAs, so you know we did a ton of research on this topic before we even considered jumping into it. We determined it made sense for our family because we already used our credit cards for our normal everyday spending and paid them off on time and in full every single month. We were only getting 1% “rewards” on those cards and we just weren’t satisfied with that.
After doing this for nearly 4 years we have earned over 1,000,000 frequent flier miles and hotel points that we estimate are worth nearly $20,000 of free travel.
That’s $20,000 of free travel just for being smart about which credit cards we used to pay for groceries, gas, restaurants and all our other normal spending.
How can you beat that?
So – How do I travel to Disney for free?
Our family of four took a nearly free trip to Walt Disney World using points and miles and saved $4,000 in the process. You can get free Disney tickets, stay at the Walt Disney World Hotel, and fly for almost free!
Laura and I took a four night luxury trip to Bermuda (in a $1,000 per night suite no less!), and we are currently planning our 10th anniversary trip to Europe for later this year – all with points and miles from credit card signups.
So we know this works.
Okay, so if you think this might be good for your family, how would you get started?
There are lots of card options and it can be a little overwhelming at first, so here are my top two cards for those starting out:
Barclaycard Arrival Plus™ World Elite MasterCard®:
This card offers you a bonus of 40,000 Arrival Miles when you spend $3,000 in the first 3 months the account is open. You also earn 2 miles for every dollar you spend, so you end up with 46,000 Arrival miles.
This is worth $460 of completely free and flexible travel.
People love this card because it is so easy to use and understand: You just pay for your normal travel expense with your Arrival Plus credit card and after the fact you log into your account and redeem your miles to effectively erase that purchase off your credit card bill.
So you don’t have to change anything at all with your travel planning as there are no “blackout dates” or limits to worry about. It’s just $460 off your normal travel expenses.
These include anything coded by the credit card company as travel, which includes: airline tickets, hotels, trains, car rentals, cruises, tour agencies and tour operators (including the major online sites like Expedia, Travelocity, etc.).
Barclays also gives you 10% of your redeemed miles back as a “dividend,” so that gives you another $46 of free travel for a future redemption for a total of $506.
Chase Sapphire Preferred:
This card offers you a bonus of 40,000 Chase Ultimate Rewards (UR) points when you spend $4,000 in the first 3 months the account is open. You earn an additional 5,000 bonus UR points if you add an authorized user who makes at least one purchase in the first 3 months. When added to the 4,000 points you earn for your spending, this is worth a total of 49,000 Chase UR points.
There are 3 ways to redeem these points, which I’ll list in increasing order of potential value:
These are just two of many rewards credit card options for you to choose from, but the two that I recommend most frequently to those starting out.
If you could use a little help getting started with travel rewards, I offer a completely free 1-on-1 coaching service through my site, so visit this page I created for ‘I am THAT Lady’ readers and we’ll get you started!
On a personal note, I asked Brad to write this up for you all because he is the one that helped me get my free tickets to see my sister.
I would highly recommend that you sign up for his free 1-on-1 coaching service to help you get started. But PLEASE – I urge you to not start using credit cards and get into debt doing this. This is only for people who have a manage on their finances and can handle paying your bills off in full every month!