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Originally published: February 2, 2016
I’m sure you’ve heard in commercials that you can earn cash back as you spend with a rewards credit card. I know, it may seem too good to be true, but if you leverage a credit card the correct way, you can essentially be earning free money with purchases you make regularly! If you’ve never owned or used a credit card before, they can sound a little bit confusing at first, but they’re pretty straightforward if you know how to use them correctly. To help, I’m here to explain how to correctly use a credit card to earn travel points and rewards so you can start traveling for free!
But, a word of caution, use this option only if you know that you can be strict with yourself and your spending. Do not see your open credit line as unlimited money at your fingertips, this can quickly end with you in a good amount of debt with a high interest rate. Instead, use your card essentially as your debit card that you pay off each month.
How to Use a Credit Card to Earn Travel Points & Rewards
Choose a Travel Rewards Credit Card
First things first, if you do not have a travel rewards card, it’s time to get one. If you have a good line of credit, it’s usually fairly easy to become approved for a card with great rewards. Nerd Wallet offers a great comparison for rewards cards, with tons of user reviews to help you choose. Most cards have an annual fee, with the first years waived, but some, like the Discover it® Cash Back Credit Card offers rewards with no annual fees. While other cards earn more points per dollar, this card is still great and even more affordable for future travelers.
I opted for the Capital One® Venture® Rewards Credit Card for the reasons below:
- The rewards are very versatile when it comes to what you can spend them on (You can “erase” your travel purchases and pay yourself back or use them towards Amazon purchases)
- You receive “double rewards” on every purchase
- They offer a generous line of credit
- They offer a great sign up bonus ($500 once you spend $3,000 in the first 3 months!)
- Points do not expire so you can keep racking them up
- $95 annual fee (I get about $300+ of rewards every year so it’s worth the fee.)
This card may not be the best for everyone, but I found it to be one of the best for myself to earn travel rewards. I’ve had this credit card since 2015 and I’ve earned a few thousand dollars worth of rewards to use towards travel!
If you do not have the credit score or income needed to be approved from one of the cards above, don’t fret. Visit your bank and ask about the cards they offer just to start building your credit. Once you use your card for about 6 – 12 months responsibly, your credit should have improved, making it easier to get approved for a travel rewards card when you apply. If you still cannot get approved, it may be an issue of your annual income that determines your application.
Now, lets move on how to actually use your card to receive the best rewards.
How to Use a Travel Rewards Credit Card
Like any credit card, you are given a line of credit to spend that you must pay back on a monthly basis, or fees will be charged. Many people like to use credit cards only on purchases they cannot afford at the time, and pay it back in increments, or only pay the minimum amount due each month. But, if you want to earn rewards, and essentially travel for free, this is not the way to use your card. If it takes you longer than a month to pay back what you’ve purchased, you will have to pay interest on top of what you spend, which is losing you money, not earning it. Instead, use your card as you would your debit card.
- Pay with your travel rewards card on all purchases you regularly make with your debit card (gas, food, rent, bills, entertainment, etc…)
- Many credit cards have even partnered with certain stores to help you earn even more points when you shop.
Using a credit card to earn travel points and rewards is not super difficult, and it will only be a matter of time before you start earning tons of travel points! Since you will be spending and earning points off of purchases you would already be making, regardless of your card, you will essentially be traveling for free!
Have you started racking up travel rewards?
Let me know which credit card you decided to go with and why in the comments below!