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Planning the Summer Trip of a Lifetime, Using Credit Card Points

Credit card points can allow for free travel, but the strategy is not for everyone. Find out how these savvy travelers saved big on epic trips.

April 26, 2022

This article is provided for informational purposes only and should not be construed as legal or investment advice. Always consult with a professional financial or investment advisor before making investment decisions.

Travel can be an incredibly rewarding experience — but it’s not cheap. 

It’s particularly true if you plan to travel during the summer months, which tend to be the busiest and most expensive time of the year for many destinations. 

But are there some cheap summer vacation ideas that won’t cost an arm and a leg? How about paying for an epic trip with the use of credit card points? 

In this guide, we’ll explain how it’s possible to save money on travel using credit card rewards — and provide examples of people who’ve successfully “travel hacked” their way into epic trips on a budget. 

“Travel hacking” basics

Travel hacking, also known as “churning,” is a hobby that involves earning credit card rewards in order to use them for free or discounted travel. 

Many credit cards earn rewards. For instance, you might have an airline credit card that earns one airline mile for every $1 you spend on the card. 

Over time, these rewards add up — and miles can be used for free flights. Other cards offer cashback, hotel points or other types of rewards. 

Chasing sign-up bonuses

Many people go further with their summer vacation ideas than standard rewards by strategically earning credit card sign-up bonuses. 

Credit cards often offer an initial bonus for new cardmembers. For example, an airline card might offer 50,000 miles if you sign up for the card and spend $3,000 on it within the first three months. 

Those purchases can be anything — groceries, bills, etc — so many families will meet these spend requirements easily. 

In this case, once you spend $3,000 on the card, you earn 50,000 bonus miles, which might be good for up to two free domestic round-trip tickets. 

The dangers of credit cards

Before we go any further, keep in mind that these strategies are not for everyone

If you have existing credit card debt, or you tend to carry a balance on your cards, you likely should not attempt travel hacking. 

Why? Because you could end up paying more in interest than you would otherwise save from free travel perks. 

For example, if you were to put the $3,000 initial spend requirement on a credit card and not pay it off, it would start costing you interest — a lot of interest. 

The average credit card APR is around 19.5%. On a $3,000 balance, that’s at least $585 in interest payments each year. 

This math is simple but the story is clear: credit cards are very expensive if you carry a balance. 

It’s not a good idea to chase travel rewards, unless you can afford to pay off the charges in full. There are still cheaper summer vacation ideas — like a local road trip — that don’t require much money. 

Do you have existing credit card debt? Tally† might be able to help. Tally is a personal finance app that helps qualifying Americans consolidate credit card balancesto save money on interest by offering a lower-interest line of credit. 

A $12,000 vacation for $217: The power of credit card rewards

Need some inspiration on the power of credit card rewards?

54-year-old Lisa Phillips ended up taking a dream vacation to Norway, spending only a total of $217 on the trip. The out-of-pocket cost had she not used credit card rewards would have been over $12,000! 

Lisa achieved this feat by signing up for two credit cards with sign-up bonuses. A few months later, she was booking a trip to Norway — in first class — using points. All she had to pay were some taxes and fees on the award ticket. 

Lisa earned a moderate amount of credit card miles from the two sign-up bonuses. She was able to extract so much value out of her points by maximizing on the redemption side of things. By transferring miles to different airlines, she was able to book very expensive tickets for a very reasonable amount of miles. 

Lisa’s story doesn’t mention how much time she put into this research — but it was likely a lot of time. Redeeming miles, especially through multiple partners, can be quite a process. 

Even if she spent dozens of hours researching, in this case the benefits were clearly worthwhile.

Note: Lisa also booked first-class tickets, which probably wasn’t necessary (but made sense because she had the points). Had she been paying cash, she might have opted for economy tickets, which likely would have been closer to $1,500-$2,500. 

A $22 trip to Hawaii: Using advanced strategies

Ben Luthi, a long-time credit card aficionado and contributor for U.S. News and World Report, reported how he saved more than $5,000 on a trip to Hawaii using credit card points. 

Ben’s story is complex and highlights the lengths some people will go to save money on travel. 

Is it for everyone? No. Is it inspiring? You bet.

To sum up, Ben:

  • Applied for many credit cards over the years to accumulate points (several of the cards he applied for are no longer available)

  • Redeemed some flexible credit card points for a unique package deal that included airline miles and hotel points (the same deal is no longer available) 

  • Redeemed around 57,000 miles for two round-trip tickets to Hawaii

  • Redeemed 200,000 hotel points for a five-night stay on Maui

  • Paid for hotel and resort fees out-of-pocket, but was partially reimbursed from a benefit on his credit card (though this card has a high annual fee)

  • Paid for a rental car using a credit card with flexible point redemptions. This card allowed him to “erase” the charge by redeeming points

  • Paid for activities using the same flexible point rewards card described above. 

Cheap flights with minimal effort: A more realistic strategy

The above examples include advanced strategies and summer vacation ideas that likely aren’t accessible for most of us. 

Consider the following example that’s a bit more realistic.

Alex’s strategy with credit cards is to apply for a new card once or twice per year. They use the new card to pay for their everyday expenses and always pay off the entire balance in full at the end of the month. 

Alex focuses on airline credit cards that offer good mileage sign-up bonuses. Then, they redeem those miles for free (or very cheap) economy-class tickets. 

Over the years, they’ve redeemed all sorts of free travel, including:

  • 2x round trip tickets to Southeast Asia (paying around $45 in fees)

  • 2x round trip tickets to Eastern Europe (paying around $100 in fees)

  • 2x round trip tickets to Hawaii (paying around $22 in fees)

  • Many domestic round-trip tickets

Alex’s strategy is to keep things simple. They enjoy plenty of perks from their efforts but they try not to put too much time into the hobby. 

Wrapping up

Credit card miles can help lower the cost of travel — but the hobby is only worthwhile if you are very responsible with credit. 

If you carry a balance on credit cards, the interest charges will quickly outweigh the benefits you receive from discounted travel. 

Finally, keep in mind that many of the credit cards with generous signup bonuses are only available to those with excellent credit. If your credit is less than ideal, read more about how to improve your credit score here

†To get the benefits of a Tally line of credit, you must qualify for and accept a Tally line of credit. Based on your credit history, the APR (which is the same as your interest rate) will be between 7.90% - 29.99% per year. The APR will vary with the market based on the Prime Rate. Annual fees range from $0 - $300.