Travel cheap with your credit card

Kristine Dizon
|
January 16, 2020

Got travel on the brain? Don’t worry – when the outside temps start to resemble a walk-in freezer, that’s usually the cue to start looking at warmer pastures.

We get it, and we want to help! What if we told you that you don’t have to break the bank for a sunny week in the Bahamas? Make your credit card work for you and travel on the cheap!

Step 1 – Choosing your card

A quick note before we start: Before choosing a credit card, it’s worth giving some thought to your spending and earning style. Do you spend more on gas? How about dining out? Maybe you just really love Harley Davidson? There’s probably a card for you! Take a minute to think about how you usually spend your money AND how you’d like to be rewarded before starting your search.

If you already have a rewards card but don’t know all the ins and outs of what you’re working with, a great place to start is RateHub!

Cashback cards vs. points cards

When looking at the different credit cards available to you, there’s really two ways to think about the kind of rewards you can collect.

Cashback

For the straightforward traveler, a cashback card makes it easy. You’ll know exactly how much you get back based on your monthly spending, and there’s no number crunching required to figure out how much a “point” is worth.

Cashback cards are pretty simple: spend money, get money! Better yet, make sure you use your credit card for the purchases that get you the most return, and save all that extra moolah in your travel piggy bank.

Points

You might be wondering: why bother with points when you can simply get money back from your purchases? Well, let me tell ya!

  • Welcome bonus: If you’re signing up for a new rewards card, there’s a high chance that you’ll be offered a juicy welcome bonus. That’s literally free money just for being a new customer! Don’t forget to read the fine print so you can take full advantage of the offer. Need some help? Check out RateSupermarket and RewardsCanada for a list of current offers.
  • Better return: Most cashback cards range from 1-4% return at most, but you can find rewards cards that equal up to 6% back! On top of that, rewards cards tend to be more flexible in how you earn. You’ll likely have more luck finding a rewards card that accommodates your spending categories. FYI, Get Digs is classified under “other purchases”
  • Travel loyalty: If you love travelling with a certain airline (e.g. West Jet) or frequently book travel with a specific provider (e.g. Expedia), you can easily find rewards cards that will give you more bang for your buck.
  • Travel perks: Rewards cards can come stacked with perks – everything from exclusive airport lounge access, better rates at hotels and car rental services, trip insurance and more – it’s worth reading up on what other perks your particular card offers. The best thing is that these perks don’t cost you anything more! They simply come with your card.

The real value of signing up for a rewards card is the ability to tailor your card to your preferences. While it’s a bit trickier to master, you’ll be well rewarded for your efforts.

Step 2 – Pay off that balance!

Before you get too excited with the possibilities available to you now that you found your perfect credit card, your first priority should be paying off your balance month to month. A number of reasons:

  • It’s good practice – While credit cards are pretty great, it’s also important to remember that they come with some of the highest interest rates for lending. Carrying a balance or missing payments will also negatively affect your credit score, so it’s best to get into the habit of paying off as much as you can, when you can.
  • You might not get your points or cash back – Most rewards cards won’t award you points if you happen to be owing. Even if they do, there’s a good chance that the points or cash that you earn will be worth less than your current balance.

All good? Let’s move on to the fun stuff.

Step 3 – Become an earn and redeem travel master

Maximize your spending

The best way to earn points for any credit card is to learn what tiers of redemption are available to you. Maybe you can get 4x the points or 4% cash back for gas purchases but only 1x/1% for restaurants! Read up on your card of choice to make sure that you’re using the right card to pay for those high redemption purchases. Your debit card won’t mind, we promise.

Redeeming for travel

Some cards offer flexible rewards meaning you can choose how to redeem your hard-earned points: be it merchandise, services or even paying off your balance. If travel is the goal, only spend your points on travel-related things. Don’t get tempted by the shiny Dyson vacuum in your rewards catalogue; save your points and only use them when you’re ready to book a trip!

Booking travel

You can book travel in a number of ways, but if you have a travel rewards card, there’s a high chance that your credit card will incentivize where and how you book your trip.

For some, this means booking with their preferred travel agencies will earn you double or triple the points. In other cases, your card may have its own travel agency! If you book with your card, you may receive a preferred rate, or have your booking fees waived. This applies to anything you can think of – flights, hotels, taxis – some cards will even cover your Nexus card application fee.

Better yet, plenty of cards also offer a service that lets you book anywhere, and still get points!

Other helpful tools

So you’ve got all these points accumulated and you’re ready to pull the trigger on that next beach vacation. Here’s a quick list of resources that can help you save even more money:

Booking ahead of time

Hopper: If you’re even thinking about flying, you need to be on Hopper. This app asks you when and where you’re traveling then shows you the optimal times to purchase tickets and how much you can save if you’re able to wait it out.

Hopper is the easiest way to find out exactly when to book flights and might help you save hundreds of dollars in just a few taps.

Booking last minute

  • YYZ deals: Offers daily and weekly last minute trips from Toronto. YYZ deals frequently posts some ridiculous deals, like this trip to Hawaii for just over $400
  • Flight Hub: Aggregates hundreds of flights from different airlines worldwide to always give you the best price possible

And that’s it! To recap: the goal is to pick a credit card that works for you and then spend where it gives you the most return. If you’ve got any tips and tricks you want to share, hit us up at info@getdigs.io. Happy travels!

This article offers general information only and is not intended as legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. While information presented is believed to be factual and current, its accuracy is not guaranteed and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by RBC Ventures Inc. or its affiliates.

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