Sponsored content by Navy Federal Credit Union.
It seems like everyone has a travel rewards credit card to offer, and travel rewards are everywhere. Getting a card and earning rewards is easy, but maximizing those rewards is something else altogether.
You can get cash back (always great in a pinch), or you can strategically use the points for more than their cash value by using them to purchase things you already want to buy. And if you’re a traveler, the points can take you even further—literally.
Here’s what you need to think about when you know you want to use your points to get cheaper (or even free) travel.
1. The Opening Bonus
When you first open a travel credit card, check out the bonus points being offered. Chances are, they’ll go a long way towards your first trip. They usually come with a minimum spending fee in a certain period of time, so you may want to consider switching your automatic payments to that card or time opening the card with a big purchase.
The Flagship Premier Visa Signature® credit card from Navy Federal Credit Union offers 50,000 bonus points (a $500 value) when you spend $4,000 in your first 90 days.
2. Double/Triple/Quadruple Points Earned
The standard is a point earned per eligible dollar spent, so pay attention to the cards that offer more. If you know you dine out a lot, check that your card has bonuses on dining out. If you know you shop at a certain store or buy gas from a specific station, you can get rewarded for brand loyalty.
Go into your credit card portal to see what kinds of rewards they offer and then opt in. Some of the bonuses may have a time limit (for example, 4X points for the month of December) so it pays to check in frequently or opt in to email notifications.
The Flagship Premier Visa Signature card offers 4X points on travelincluding hotels, flights, rideshare, parking, and more. Furthermore, it offers 3X on dining and 1X on everything else.
3. Bonus Rewards
From annual airline credits—straight up cash to spend on travel—to statement credits for TSA Pre✓® or Global Entry to mobile data plans and more, credit cards can come with a lot of bonus rewards. It’s worth it to frequently familiarize yourself with their partner programs and offerings and take advantage of them. Some will also have bonuses on travel days, such as going to a coffee shop or a parking terminal, so get to know those offers and treat yourself!
The Flagship Premier Visa Signature® card offers a $100 annual airline credit, up to $120 in statement credit for Global Entry or TSA Pre✓®and a complimentary 3GB GigSky® global mobile data plan.
4. Travel outside of peak windows.
If you book during low-demand seasons, you’re more likely to get deals for stays and flights, which means you’ll spend fewer total points for the trip you want. This can even allow you to enjoy luxury upgrades like business-class or first-class international flights and accommodations.
5. Understand the Cash Per Point Formula
The Cash Per Point (CPP) Formula measures the monetary value you get from each loyalty point (or airline mile). To calculate the CPP, subtract any out-of-pocket cash taxes and fees from the cash price, divide by the points used, and multiply by 100.
Here’s an example. Let’s say you want to book a flight that costs $400 or 25,000 points.
(400/25,000) x 100 = 1.6
Which means you’re getting $1.60 per point.
Anything under $1.00 is below baseline value, meaning you should just pay cash instead. $1.50-$2.00 is considered good value and is generally the standard for a domestic flight. Anything about $3.00 is considered elite value and is usually found on international premium flights or luxury hotels.
You can also use an online calculator if you don’t feel like doing the math.
Start practicing with one card. Sign up for the card, earn the bonuses, pay off the balance entirely each month, track your rewards, opt in to bonuses, and watch those points accrue. Then, when you’re ready, start planning a trip and notice how great it feels to let the points pay your way.
Source: www.wearethemighty.com
