Vacation pay and time off can only go so far in enabling you to explore that destination that’s been on your mind for a while. Working out the logistics of transport and accommodations early on can help you get even more value out of your vacation. But if you haven’t been taking advantage of travel perks offered by airlines, then there’s still more you can do to experience your ideal vacation and all of the luxuries it entails.
Partnerships between credit card companies and airlines generate perks to help fill seats and establish new credit accounts, allowing travelers to take advantage of deep discounts and enhanced vacation options.
Collecting Points for a Better Vacation
You’ve probably heard them announced over your flight’s PA or have seen them advertised inside of airline magazines. Rewards credit cards help you accrue “points,” or credits, towards flights and accommodations for your travels. The points you collect while using your rewards credit card can serve as the boost required to elevate your next trip from good to great.
First Year Perks
Just about all credit cards with travel perks will help you launch a rewards account with a solid start and a healthy cache of points. First year offers, or “welcome packages,” generally have a spending requirement you must meet in order to receive all of your sign-on benefits. Milecards.com reviewed and observed, for example, several Southwest credit card offers award you enough points for hundreds of dollars in airfare if you open a new account and meet spending requirements for the first few months it is open. If you’re wary of meeting spending requirements, remember — you can divert routine spending through your rewards credit card to reap the benefits of using it.
Integrating Rewards Cards into Your Spending
Managing your rewards credit card should be approached just as you would any line of credit. By subbing in your rewards credit card for necessary purchases and keeping its balance in check, you’ll earn your sign-on benefits. The credit card company will earn interest and your selected airline while have your patronage again.
Turning Your Points into Perks
Before settling on a rewards credit card, you’ll first need to learn how the airline’s point system works. Armed with the knowledge of how your points convert into airfare and travel perks, you can budget accordingly for your next vacation.
Determining how much of your fare your rewards points will cover depends on the destination and cost of tickets. Airlines like Southwest offer an online utility to help you determine how much of your fare will be covered by your rewards points. If you’re unhappy with the amount of credit you’ll receive on a specific flight, consider diverting your points to another area of your trip. With airlines that allow their points to generate discounts on accommodations and airport services, you can apply the savings to other areas when you’re unhappy with the rebates you’ll receive on a particular flight.
Your first year with your rewards card will likely garner you the highest yield of points and the lowest amount of card maintenance fees you can expect to receive from the card. Once your first year has passed, you may experience increased interests rates and the assessment of annual fees. As with any card, you’ll need to take time to fully understand your agreement with the credit agency before signing up for a rewards credit account.
As long as you keep your rewards credit card in check and maintain a balance low enough to easily pay it off, you should keep an eye out for other credit card offers. Many credit card companies will allow you to receive first-year perks all over again, after signing up for another one of their products. Closing out one card and moving to another can be especially beneficial, if you find the card’s annual fee too steep for the amount you use the card. Conversely, you may elect to hold onto the rewards credit card if you use it regularly.
Accruing Points after the First Year
After your first year, your point accrual will generally follow a point-per-dollar formula. Each dollar you spend on eligible items will net you a predetermined set of points, usually a point or two per dollar. Airlines often double the points you receive per dollar when you purchase their services.