Your holiday travel expenses can be significantly reduced by using reward points from credit cards. How does this work? The award space may be limited, so plan early since you won’t be the only one using this strategy.
In a recent American Express Trendex report, 88% of respondents said they would use credit card reward points to offset travel prices.
This holiday season, 86% of participants intend to earn rewards with their credit cards, and 88% plan to buy online with their credit cards to earn rewards.
You don’t have to lose hope if you haven’t already booked your travel. Using points for holiday travel can still save you a lot of money. You can accomplish it with the help of these strategies.
Time is of the essence
There are more and more early holiday shopping seasons every year. Booking your holiday travel can never be done too early. No matter what time of year it is, there’s never a bad time to book.
A majority of airline loyalty programs open their award calendars at least 330 days in advance. The demand for holiday bookings is high, so this is important. Saver award spaces are more likely to be available if you book earlier.
You might be able to find an award space closer to departure if that proves difficult. The majority of people do not book their holiday travel a year in advance, and those who do might cancel.
Additionally, some airlines make award space available closer to departure. Premium seats are typically available two weeks in advance with Alitalia and Luftha, for example. Therefore, if you’re just now planning your holiday trip, you might still be able to secure your travel plans.
Consider using bank reward points instead of travel miles if you cannot find saver-level award space using miles. You can redeem points for direct travel bookings with all of these rewards programs:
- Amex Membership Rewards
- Capital One Venture miles
- Chase Ultimate Rewards
- Citi ThankYou Points
Consider applying for a flexible rewards credit card before the holidays if you don’t already have one.
When to use points for holiday travel
Due to increased airfare and hotel prices, using points for holiday travel is a great value proposition. When you travel on a low-cost airline or to a destination where travel demand is low, you may find cheap deals.
When choosing between using points or paying cash, consider how much each is worth. Calculate the redemption rate by dividing the cost of travel by the number of points required. If the value of the points is equal to or greater than that, redeeming them makes sense.
In the event that the redemption rate falls below the valuation, consider paying cash instead. Through the end of the year, United Airlines is offering round-trip fares between San Francisco (SFO) and Maui (OGG) for $240.
There are fewer than 22,000 miles round-trip for these flights. This means you’d be redeeming miles at a rate of 1.09 cents.
Use your miles wisely
Using flexible travel points can reduce your expenses considerably, but you need to plan how you will use them. Couples with children tend to have higher expenses.
Become familiar with the different airline programs in effect and the destinations they will take you to. A good airline program allows you to travel for the least amount of miles, so you need to choose one based on how many miles it will take you to reach your destination.
Whether you are traveling within or outside of the country, it is important to compare airline programs to ensure you are not using too many miles. As you accumulate miles, you can put them towards future vacations or add them to your account before taking another trip.
Put your rewards toward a cash ticket
The airline you want to fly with may not accept your miles. The rewards you earn from other rewards credit cards will likely still be able to help you save on your flight costs.
Consider a credit card that earns rewards points. Travel purchases can often be made with points redeemed for cash. Before you do this, make sure you understand how much value you will receive. The points should be worth at least $0.01 each, so saving 10,000 points would save you $100. Redeeming your points is probably not the best idea if you’re going to get less.
Using a cashback card works almost the same way. Make the most of your cash back when you book your ticket by using your statement credit to cover as much of the flight as possible.
Use a 0% APR credit card
When your credit card payment is due, make sure you pay off your holiday flights in full. However, if you want to travel but tickets aren’t within your budget, a 0% APR credit card may be an option. For a limited time, such as 12 or 15 months, these credit cards offer 0% interest on purchases.
You should use 0% APR credit cards if you need to pay off a balance over time, whether it’s for a holiday flight or anything else. For the intro period, you will not be charged interest on your balance. Make sure you pay off the balance before the intro period ends, or you will be charged the standard APR.
Summing up
There is no doubt that holiday travel can be costly, regardless of whether you are using points or paying cash. You can save a lot of money by booking in advance or looking for a last-minute deal. You don’t have to spend tons of points or pay substantial cash markups when you use special award sales and companion passes. You’ll get the most value out of your points if you do your due diligence about your options and make educated decisions about how to redeem them.
