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LESSON 03

How To Win With Travel Rewards

 

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Updated, January 28, 2020

What You’ll Learn In This Lesson

How to earn travel rewards the easy way
How to use your travel rewards the optimized way

Given the opportunity, many people would love to travel the world for nearly free. After reading our prior lessons, you’ve seen that it is possible for those pursuing financial independence.

So far, we’ve discussed how this all works in theory, how credit score comes into play, and whom this strategy is not for in general.

Now let’s look at how you can win with travel rewards.

Basic Practices That Make Earning Rewards Easier

Keep An Eye On Your Credit Score

Like we discussed in the previous lesson, your credit score is an essential part of your travel rewards journey, so you want to pay attention to it and understand the different ways that the score can change.

A credit score that’s at least rated “good” is going to be necessary to even think about getting started, but those whose scores are “very good” and “exceptional” are more likely to get approved for cards with the best bonuses. According to the credit scoring agency Experian, FICO scores at and above 670 are considered good. Scores from 740-799 are very good and those above 800 are exceptional. Please note, however, that these numbers can vary between different bureaus.

You also want to protect your credit file by keeping your credit frozen for free with each of the three credit reporting agencies, and only temporarily unfreezing it when applying for a new credit card (or when you need to apply for other forms of credit).

Organization Is Key

Someone who can be a little organized, especially using the right tracking tools (get a sample sheet here on Google Drive) has the best shot at succeeding with travel rewards.

Some organization is important so you know when new card accounts are opened, and when the minimum spend must be met. You don’t want to miss out on earning a bonus due to a simple lack of organization.

If you choose to use our sample sheet, or any spreadsheet in fact, be sure to password protect it because points and miles are valuable, and should be treated with the same care as you would your bank account information.

It’s also important to know what your log-in details are for the various airline and hotel loyalty programs. You can use the second sheet in the sample tool, or, sign up for a service like LastPass.

Pay Off Your Card In Full Each Month

As we have mentioned previously, the cash flow to pay off credit card statements in full every month is crucial. Never spend more than you would have spent otherwise.

If you have multiple credit cards that aren’t being paid off, your credit will take a serious dive and the interest expense you pay will outweigh any “free” travel you earn.

Basic Practices That Make Using Rewards Easier

Make Travel Plans Early

Make some initial travel plans as far ahead as you can, preferably more than 12 months ahead. Then make a note in your calendar for when the airline you are after opens up redemption capacity. This is usually between 300-355 days out (roughly 10-12 months prior to the flight), depending on the airline.

When that date comes around, and you have the necessary points, grab those flights! Then you can start figuring out all the other details, like whether a visa or international driver’s license is needed, where to stay, what to do, and how to get around.

Be Flexible

Be flexible with where you want to go. Want to go to Seoul but can’t find the best redemption? Try getting to Tokyo, spending a few days there, then getting a flight on a Low Cost Carrier (LCC) to Seoul.

Be as flexible as you can with when you travel. If you can shift your travel days by a few days, that could mean the best deals open up.

Have Backup Destinations

Plan on some backup options if you really want to travel in a given period.

If you just can’t get a flight to Hawaii during the year-end holidays, try someplace else. Maybe the Caribbean!

Actionable Takeaway And Final Thoughts

The actionable takeaway for today’s lesson is to download the sample organizational tool, and to get familiar with the different columns in each sheet. Don’t apply for any credit card or loyalty programs just yet, though.

Today you’ve learned how to make rewards work for you. A little flexibility and organization are key, so if you want to get the best rewards, make sure you can do those two things.

Now that we’ve got you set up for success, let’s dive into the world of travel rewards.

If you found this course on travel rewards helpful, you may also enjoy this free illustrated guide, packed with many other ways to get more for your buck and win back your financial independence.

Course content originally produced by ChooseFI was edited/updated by CardRatings for this lesson.