Travel around the world with credit card points

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Ever wondered what it would take to get enough credit card points for a trip around the world?

Lillian Karabaic, personal finance expert and founder of Oh My Dollar!, shared with Bankrate how it’s possible to travel the world with credit card rewards. In 2017, Karabaic used over 100,000 Chase Ultimate Rewards points to help fund a month-long train journey across 13 countries from Dublin, Ireland to Shanghai, China.

“I really like to travel,” Karabaic told us. “It’s one of the essential things I spend my discretionary income on.” Karabaic also loves spreadsheets and project management, which is one of the reasons she’s been so successful at turning credit card points into flights, hotels, and train tickets.

“If you want to take big trips, being someone who is highly organized, can meet deadlines, track expenses, and keep tabs on your credit score is crucial,” Karabaic says.

What else do you need to know to travel the world with credit card points? We asked Karabaic for his big winning tips to help you plan your next big adventure.

Travel hack takes time, but it’s worth it

Many people want to use today’s best travel credit cards for travel hacking, but, as Karabaic reminds us, people who get the most out of their travel credit card rewards need to be prepared. to turn this interest into a serious hobby.

“I see a lot of people who think they’re going to get the kind of robberies I get by signing up for a credit card and putting all their groceries on it,” Karabaic says. While using a daily spend card to earn credit card rewards can help you save money over time, you need to be a little more strategic if you want to turn your points, miles, and cash back on airline tickets around the world.

“I calculated all the flights and trips I got with my Chase points, and it was about $20,000 in plane tickets,” Karabaic told us. This type of travel hack takes time, especially if you want to do something important like redeem your travel rewards for a first class suite on Korean Air (a ticket that could have cost Karabaic over $10,000) .

Know where you want to travel and which credit cards can get you there

Some people assume that traveling the world with credit card points is as simple as applying for multiple credit cards, earning as many points as possible, and then deciding how to redeem them.

Karabaic suggests approaching it the other way around.

“Knowing where you want to go before you start asking for maps is very helpful,” Karabaic told us. When she planned her 13-country train trip, for example, she knew she wanted to take the Trans-Siberian Railway from Moscow to Beijing. Before Karabaic asked for a single travel credit card, she started researching which airlines served Moscow, which of those airlines offered good mileage deals, and which travel credit cards offered transfer partnerships with those airlines. aerial.

“I wanted to do a first class suite on a plane,” Karabaic explained, “so I researched what was the best credit card transfer availability I could qualify for so I could return from Asia to a suite first class..”

After doing some research, Karabaic decided that the Chase Sapphire Reserve® was the best travel credit card for this particular trip, not only because of its transfer partnerships with airlines, but also because the card had recently announced a high sign-up bonus: 50,000 points.

What does choosing the right cards mean? Here’s a good example: Chase Sapphire Reserve currently offers 50,000 bonus points to cardholders who spend $4,000 in the first three months of card ownership. Since Chase Sapphire Reserve points are worth 50% more when redeemed for travel through Chase Ultimate Rewards, this bonus can be worth up to $750 if you redeem it for its maximum value.

However, the Chase Sapphire Reserve card also comes with an annual fee of $550, which is why Karabaic recommends considering the sign-up bonus offered by the Chase Sapphire Preferred® card instead. This card has an annual fee of $95 and just announced a sign-up bonus of 60,000 points for cardholders who spend $4,000 in the first three months. Since Chase Sapphire Preferred points are worth 25% more when redeemed for travel through Chase Ultimate Rewards, this bonus can be worth $750 if redeemed the right way.

Yes, the Chase Sapphire Rewards card offers a few extra travel benefits in return for its higher annual fee, but if you’re primarily interested in earning the sign-up bonus, it’s worth noting that the Chase Sapphire Preferred bonus has potentially valuable value. higher. . And you can always switch to reserve after a year of owning the card if you realize this card is better suited to your travel needs.

Since credit cards regularly change their sign-up bonuses, it’s important to know which cards offer which rewards, whether those welcome bonuses are actually a bargain, and whether you’ll be able to cover the minimum spend required to earn. premium.

Make sure you reach the minimum spend to earn the sign-up bonus

In addition to planning your itinerary, researching mileage rates, and checking airline transfer partners, there’s one more thing you need to do before applying for the travel credit cards that will fund your next big trip: find out how you will earn these lucrative sign up bonuses.

“I always know how I’m going to get my sign-up bonus before I apply for the card,” Karabaic says, noting credit card welcome bonuses are among the best ways to earn points and miles for your next big one. trip, but only if you choose the right cards and reach the minimum required to earn the bonuses.

Once you’ve decided which travel rewards card offers the best welcome bonus for your needs, how can you make sure you meet the minimum spend required to earn it? Karabaic suggests putting as many big expenses on your card as possible, especially if those expenses are already built into your budget.

“I pay my taxes on credit cards,” Karabaic says, although there is a small fee to pay taxes on credit. “I also pay my rent. If your landlord doesn’t allow you to pay your rent on credit, you can use various services that will allow you to pay your rent by credit card if you’re willing to pay a small percentage on top. They will send a check to your landlord. I chose to do this because it makes more sense to meet these minimum expenses.

If you want another tip to help you hit your minimum spend and earn your sign-up bonus, Karabaic suggests dividing the minimum dollar amount by the time limit and making sure your spending stays on track. . Since the Chase Sapphire Preferred and Chase Sapphire Reserve cards require you to spend $4,000 over three months to earn your welcome bonus, you need to spend at least $1,334 per month, or about $45 per day, to get these. points.

“Don’t miss your $1-a-day minimum spend,” Karabaic says, “or 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 improve your next travel experience, Karabaic has another tip: make sure you’re also using these cards to improve your credit score.

“Since I started hacking travel, my credit score has only gone up, due to more accounts, the fact that I have a longer credit history, and the fact that my credit card usage is very, very low.”

Karabaic, like many people, initially worried about what multiple credit card applications might do to her credit. While every firm credit card application can temporarily lower your credit score, using your new lines of credit responsibly can have an even bigger impact on your credit and could raise your score far beyond the temporary drop. .

Consider the potential credit boost as an added benefit, along with points, miles, statement credits, annual flight credits, TSA PreCheck and Global Entry application fee credits, complimentary lounge access from airport and travel insurance benefits with today’s best travel cards.

That, and the ability to use your travel rewards to see the world.

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