Ever wondered what it takes to get enough credit card points to travel around the world?
Lillian Karabike, personal finance expert and founder Oh my dollar!, shared with Bankrate how you can travel the world using credit cards. In 2017, Karabaich spent over 100,000 Chase Ultimate Rewards points for funding 1 month train ride in 13 countries from Dublin, Ireland to Shanghai, China.
“I really like traveling,” Karabaich told us. “This is one of the main things I spend my discretionary income on.” Karabaych also has a passion for spreadsheets and project management, which is one of the reasons she has been so successful in transforming credit card points in air tickets, hotels and train tickets.
“If you want to make big trips, it’s very important to be a very organized person who can keep up with deadlines, track your expenses and keep track of your credit rating,” says Karabaich.
What else do you need to know about traveling the world with credit card points? We asked Karabaich for tips on how to make big money to help you plan your next big adventure.
Hacking travel takes time, but it’s worth it.
Many people are interested in using the best travel credit cards available today for travel hacking, but as Karabaych reminds us, people who get the most out of your travel credit cards you need to be ready to turn this interest into a serious hobby.
“I see a lot of people who think they will get the flights that I get by signing up for one credit card and putting all your groceries on it, – says Karabaich. Using daily expense card To earn credit card rewards you can save money over time, you have to be a little more strategic if you want to turn your points, miles and cash back into plane tickets around the world.
“I counted all the flights and trips I got from my Chase glasses, and that was about $ 20,000 for plane tickets,” Karabaich told us. This way of travel hacking takes time, especially if you want to do something big like redeem awards for a trip to a first-class suite on Korean Air (a ticket that could have cost Karabike over $ 10,000 out of pocket).
Know where you want to go and what credit cards will help you get there
Some people find that traveling the world with credit card points is as easy as applying for multiple credit cardsby earning as many points as possible and then deciding how to use them.
Karabaych suggests approaching this from the other side.
“It is very helpful to know where you want to go before applying for a card,” Karabaich told us. For example, when she was planning a train trip to 13 countries, she knew that she wanted to take the Trans-Siberian Railway from Moscow to Beijing. Before Karabaych applied for a one-time travel credit card, she began figuring out which airlines serve Moscow and which of those airlines offer. favorable mileage offers and which tourist credit cards are offered transfer of partnership with these airlines.
“I wanted to make a first-class suite on the plane,” Karabaich explained, “so I figured out what the transfer is best for. credit cards that I could qualify for so that I can return from Asia in a first-class suite. “
After conducting research, Karabaich decided that Chase Sapphire Reserve® was the best tourist credit card for this particular trip – not only because of airline partnerships, but also because the card recently announced an unusually high registration bonus: 100,000 points.
What does it mean to choose the right cards? Here’s a good example: Chase Sapphire Reserve currently offers 60,000 bonus points to cardholders who spent $ 4,000 in the first three months of card ownership. Since Chase Sapphire Reserve Points are worth 50 percent more when redeemed for travel through Chase Ultimate Rewards, this bonus can be worth up to $ 900 if you spend it at the maximum value.
However, the Chase Sapphire Reserve card also carries an annual fee of $ 550, so Karabaich recommends considering the signup bonus offered by Chase Sapphire Preferred® Card instead. This card has a $ 95 annual fee and just announced a 100,000 points signup bonus for cardholders who spent $ 4,000 in the first three months. Since Chase Sapphire Preferred Bonus Points are worth 25% more when redeemed for a Chase Ultimate Rewards trip, this bonus can be worth $ 1,250 if you spend it right.
Yes, the Chase Sapphire Rewards card offers several additional travel perks in exchange for a higher annual fee, but if you’re primarily interested in a sign up bonus, it’s worth noting that the Chase Sapphire Preferred bonus has the potential to have a higher value. … And you can always switch to the Reserve card after a year of card ownership, if you find that this card is more suitable for your travels.
Since credit cards change their signup bonuses on a regular basis, it’s important to know which cards are offering which rewards, if those welcome bonuses are really beneficial, and if you can cover the minimum costs required to earn the bonus.
Make sure you spend the minimum to earn your sign up bonus.
In addition to planning your itinerary, finding mileage fares, and checking airline transfer partners, there is one more thing you need to do before applying for the tourist credit card that will fund your next big trip – know how you’re going to make money. these lucrative sign up bonuses.
“I always know how I’ll get my sign up bonus before I apply for the card,” says Karabaich, noting that credit card welcome bonuses are one of the best ways to earn points and miles for your next big trip. but only if you choose the right cards and reach the minimum cost required to qualify for the bonuses.
Once you’ve decided which travel bonus card offers the best welcome bonus for your needs, how can you be sure to spend the minimum required to receive it? Karabaych suggests setting aside as many large expenses as possible on your card, especially if these expenses are already included in your budget.
“I pay taxes on credit cards,” says Karabaich, although for pay taxes on credit… “I also pay rent. If your landlord does not allow you to pay rent on credit, there are various services that will allow you to Pay rent by credit card if you are willing to pay a small percentage on top. They will send your landlord a check. I prefer to do this because the wisest thing to do is to cut these minimum costs. “
If you’re looking for another piece of advice to help you meet the minimum costs and earn your sign up bonus, Karabich suggests dividing the dollar minimum by a time limit and making sure your spending stays at the right level. Since both Chase Sapphire Preferred and Chase Sapphire Reserve cards require you to spend $ 4,000 over three months to earn the welcome bonus, you need to spend at least $ 1,334 per month, or about $ 45 per day, to earn those points.
“Don’t miss out on minimal spending, even on a dollar a day,” says Karabaich. “Otherwise, you won’t get those points.”
Travel hacking can improve your credit score if you do it right
If you’re still interested in using travel credit cards to enhance your next trip, Karabaych gives you another tip: make sure you use these cards for improve your credit rating also.
“Since I started doing travel hacking, my credit score has only increased due to the number of accounts increased, the fact that I have longer credit historyand the fact that mine using a credit card very, very low. “
Karabich, like many people, was initially worried about what multiple credit card applications might do with her loan. Although each hard credit card request can temporarily lower your credit rating, the responsible use of new lines of credit can further affect your credit and can raise your rating far beyond the temporary drop.
Think of a potential credit boost as just another bonus – along with points, miles, credit points, annual flight credits, and more. TSA PreCheck and Global Entry Registration Fee Credits, free access to the airport lounge as well as travel insurance benefits associated with the best travel cards today.
That, plus the ability to use travel rewards to see the world.