5 Easy Ways To Save Money On Travel

How I Use Credit Cards to Save on Travel

How I Use Credit Cards to Save on Travel

Travel Tips

Not being smart with your money can have a big impact on your ability to travel. Below I lay out five easy ways to stay on top of your finances so that money can empower, not limit you.

Disclosure: Thank you Capital One® for sponsoring this post! All opinions are my own, and were not directed by Capital One. To learn more about CreditWise® from Capital One®, visit: https://creditwise.capitalone.com.

Traveling doesn’t have to be expensive, especially when you find creative ways to save money on trips. Having a good travel rewards credit card doesn’t hurt either (granted, those can be hard to get, so making sure your credit is in order is key).

Now, I’m not talking about using your credit card to pay for an expensive trip you can’t actually afford – that’s a horrible idea! Always live within your means and pay off your balance every month.

Instead, take advantage of the great travel benefits that having good credit can afford.

For example, for many years I was completely oblivious to the power of traveling smart, such as collecting points and rewards that are redeemable for travel.

I’ve only started getting into this hobby in the past year, and have already collected enough miles to book a free round-trip flight to New Zealand! Now I’m hooked. Who doesn’t want to save money on travel?

Here are my top five ways to use credit wisely and save money on travel.

Ways To Save Money On Travel

Money Saving Tips

Get Smart About Your Credit

To get approved for a credit card with travel rewards, you need to make sure your credit health is in good shape.

CreditWise by Capital One is a free and easy to use tool that allows you to track your TransUnion® VantageScore 3.0 credit score, learn more about the factors that impact that score, and find helpful ways to take action to improve and protect it.

My favorite feature is the credit simulator, which allows you to choose from any combination of 17 different credit-influencing actions to see how each scenario might affect your score, positively or negatively.

For example, you could see what might happen to your score if you canceled your oldest credit card (hint – that’s usually not suggested by credit experts). You could also see what might happen if your balance increases by $400 – perhaps after buying a plane ticket, or if you are thinking about opening another line of credit.

I’ve learned a lot about what kinds of actions will affect my credit score by playing with the simulator. It’s a great tool for travelers who are looking to build their credit in order to get approved for a card with travel benefits and features.

Give it a shot, and see what your score looks like here. The app is 100% free, and available to everyone, even if you don’t have a Capital One card!

Ways To Save Money On Travel

Travel More with a Rewards Card

Get A Travel Rewards Card

One of the best reasons to get a travel rewards credit card is to earn and redeem points/miles for free travel. What does this mean? With travel rewards cards, each purchase you make earns you points that are redeemable for airline tickets, hotels, or upgrades.

Remember, you can’t get a good travel rewards card without strong credit; that’s important to keep in mind as you look at your credit card options.

These special travel benefits can save you a LOT of money, as long as you pay off your balance each month to avoid incurring interest charges, and you use the card enough to offset the annual fee.

Flights are expensive. Paying for your next plane ticket or hotel stay with reward points you’ve earned using credit cards can save you hundreds of dollars.

Avoid Currency Exchange Fees

Having your credit score in a good place gives you a better chance to get approved for travel reward cards that can give you perks like travel accident insurance and no foreign transaction fees.

When traveling, exchanging currency at airport kiosks (like many tourists do) usually means you are going to get overcharged. Currency exchange businesses love to promote “Commission free!” exchanges, but what they really do is charge you a horrible exchange rate and often a “service charge” on top of that.

It’s usually cheaper to use your bank’s debit card at an airport ATM for cash, in combination with a good travel credit card for larger purchases like hotels, tours and car rentals (while collecting points for free travel).

Always know the exchange rate for the country you are traveling to. Check online before you go at travel resource sites like http://xe.com.

Car rental insurance tip

Get Some Free Car Rental Insurance

Make Sure You Have Travel Insurance

Another wonderful benefit of some travel rewards credit cards is the travel insurance that many of them provide for their customers, free of charge.

While it varies depending on the card, many companies offer free car rental insurance, flight delay insurance, lost luggage insurance, and more.

Make sure to read your credit card agreement for exact details on what is covered, what isn’t, and for how much.

Forget Foreign Transaction Fees

Foreign transaction fees are charged by credit card companies for using your card at a non-U.S. retailer. Some credit cards charge up to 3% for each purchase overseas.

Certain travel-friendly credit cards, like the Capital One Venture® Card that I use, have unlimited rewards no matter where I jet off to. It’s one of the reasons I’ve been traveling around the world as a Capital One customer for the past 6 years.

If you’re planning to spend time traveling in the future, download CreditWise now to get ahead of managing your credit health. It’s 100% free.

Now go save some money, and happy travels! ★

Learn More: CreditWise By Capital One

Disclosure: Thank you Capital One® for sponsoring this post! All opinions are my own, and were not directed by Capital One. To learn more about CreditWise® from Capital One®, visit: https://creditwise.capitalone.com.

Any Questions Or Comments?

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24 Comments

  1. I’m still really on the fence about credit cards because of the bad press they get. It can be an easy trap to fall into where you just say ‘I’ll stick it on the credit card’ and I personally know people who returned from a RTW trip in a lot of debt. I understand that as long as you are careful there are great rewards but I am yet to take the risks! This post gives a great run down on what I’m missing out on! Definitely a lot of food for thought and I will pursue more information on the matter before making a final decision!

  2. Great! now I feel dumb about my expenditure on every trip that i have made. Better late than never, I never thought about saving money in this way possible. Great help, thanks a ton!

  3. I’m quite young (under 20), don’t make much money, and have no credit history at all whatsoever. I’d like to get a travel rewards credit card but I got rejected by one company already. How do I get a travel rewards card?

    1. Hey Leanne,

      I got my first credit card at 18 and the easiest way to do that is to apply for a “store” card. So if you go to any big box stores and they offer to sign you up for one of their branded credit cards OR my personal favorite is the Amazon Chase card. You can typically apply and get these cards with little to no credit and they are free. You will have a very low balance and the APR will be crazy (24-25%) so you want to make sure to pay it off in full each month BUT it will start building your credit history to have one. Once you have some good credit history and pay off each month you should get a nice enough credit score to apply for the good travel cards (700+ credit score).

      1. Excellent advice Alex. Another option is to apply for a “secured” credit card. Basically you put down the money up-front, maybe $500, and you then borrow off that deposit amount. With time, and regular payments, the company can increase your card’s limit without additional deposits, meaning you’ll have actual credit to use.

  4. Matthew,
    I can’t believe I’ve found something that I have been doing for quite a while and have done to a larger degree more than you. Wonders never cease! LOL! I actually started using my Citibank Advantage credit card in 1993 when my brother told me about frequent flyer miles. Over time I collected almost 1,000,000 miles in total. Can’t wait until I hit the magic number soon. Our entire family (wife, 3 sons and I ) took a free trip in first class from Austin to Hawaii (Kuai) for a week and then back through Vegas. It was unbelievable and the family loved it.

    I’m back earning again and have flown 3 times to Japan, twice to Ecuador, once to Barcelona and one time to Italy. Not to mention another family trip to Mexico. Believe me we love frequent flyer miles. All members of my family now have their own programs.

    Thanks for bringing this up and allowing my comment. Nothing finer in my opinion, especially now that so many new credit cards have large mile giveaways just for signing up and making minimum purchases. That’s a whole different story than equal Mikes for dollars spent. Safe travels young man!
    Mike

  5. If only I payed attention to the little things to save some money the first time I travelled alone. Didnt make the same mistakes again thats for sure. The biggest supprise was how quickly money can dissapear in cheaper countires like Thailand. If you dont watch the pennies they soon add up! Great article keep them coming!

  6. Travel hacking with credit cards is something I would love to learn more about. Can you recommend any good resources?