Vacations You Can Take With Credit Card Rewards

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Using credit card rewards can make a trip to Disney World -- and many other places -- more affordable. Photo: Randy Pertiet

Using credit card rewards can make a trip to Disney World — and many other places — more affordable. Photo: Randy Pertiet

The average vacation for a family of four rang in at a staggering $4,580 in 2014, according to a recent study from American Express. That total includes the cost of lodging, transportation, food, and entertainment, and of course the excessive taxes and fees that are levied on every component of your travel itinerary.

Furthermore, a recent survey from Glassdoor showed Americans only used about half their vacation days in the last 12 months. And with huge costs like that, it’s easy to see why.

Fortunately, there are many ways to take the sting out of your annual vacation bill, whether you opt to take cheap vacations closer to home or simply shop for deals online. Even better, certain travel rewards credit cards can help you stretch your budget by helping you earn free hotel stays, airfare, and more. But how do those offers work?

Using Rewards to Get the Most Out of Your Travel Budget

A wide range of travel providers have partnered with credit card issuers over the years to offer co-branded rewards cards. These serve multiple purposes for both the businesses involved and the consumer: First, they provide consumers with a line of credit they can use for regular purchases or emergencies. Second, they bolster consumer loyalty by providing rewards specific to a particular travel brand. And third, they provide an additional stream of revenue for card issuers who offer these deals.

Most rewards credit cards offer individuals who qualify a sign-up bonus in exchange for meeting certain requirements. In most cases, that involves spending a certain amount of money on the card within a defined time frame, such as three or six months.

Some travel rewards cards come with an annual fee, although many of them waive the fee for the first year so you can try out the benefits before making a commitment. Once you meet the requirements of the card you sign up for, you are generally rewarded with either cash back, airline miles, or hotel loyalty points that can be traded in for free hotel stays and more.

But that’s all technical jargon and, quite frankly, it’s not all that interesting. To put things in perspective, I created a list of vacations you could feasibly take using credit card rewards:

Starwood Preferred Guest: Hawaii, London, and More

The Starwood Preferred Guest® Credit Card from American Express offers 75,000 Bonus Points after you use your new Card to make $3,000 in purchases within the first three months of account opening.

SPG points are redeemable at a slew of hotels and resorts all over the world. The SPG program separates Starwood hotels into seven categories with different point requirements for each level. This table provides a breakdown:

Starwood Hotel Category Points for Redemption
Category 1 2,000 weekend – 3,000 weekday
Category 2 3,000 weekend – 4,000 weekday
Category 3 7,000
Category 4 10,000
Category 5 12,000 off-peak – 16,000 peak
Category 6 20,000 off-peak – 25,000 peak
Category 7 30,000 off-peak – 35,000 peak

Here are some popular SPG hotels you can book with points:

Park Lane Sheraton Hotel in London – Category 6

My husband and I stayed here for four nights earlier this year. It’s within walking distance of Buckingham Palace, London’s West End, and the Green Park Underground station, from which you can go anywhere in the city.

The Westin Fort Lauderdale – Category 4

The Westin Fort Lauderdale is just a 10-minute drive from the ocean and has a pool — the perfect place to bring the kids. 

Walt Disney World Swan – Category 4

The Walt Disney World Swan (and Walt Disney World Dolphin) in Lake Buena Vista can both be booked for 10,000 points per night. Using points for your stay won’t take the sting out of pricey park tickets, but they can help make your Disney trip more affordable.

The Westin Grand, Vancouver – Category 4

This boutique, all-suites hotel is in one of the trendiest districts in downtown Vancouver, British Columbia. Take a swim in the outdoor, heated lap pool or explore the local theaters, museums, public squares, and upscale shopping destinations.

Le Meridien Pyramids Hotel and Spa, Cairo – Category 1

This hotel is within walking distance of some of the world’s treasures, including the El Giza Pyramids and the Sphinx, and is only a 15-minute drive from the busy center of Cairo. On-site dining is also available.

Sheraton Princess Kaiulani, Hawaii – Category 5

With an outdoor freshwater swimming pool and sweeping ocean views, the Sheraton Princess Kaiulani is the perfect place to bring the kids or enjoy some quiet time with your partner or spouse. On-site dining is available, but you also benefit from the many eateries within walking distance.

These are just some of the hotels and resorts that can be booked for free with SPG points. If you want to browse through the hundreds of other options available, go here.

Almost-Free Flights or Hotel Stays with Chase Ultimate Rewards

Chase Ultimate Rewards points are typically considered some of the most valuable points out there — for a few reasons. However, the main value lies in the fact that they are so flexible.

One of the most popular Chase credit cards that earns these rewards is the Chase Sapphire Preferred® Card. This card provides a sign-up bonus of 50,000 Ultimate Rewards points after you spend $4,000 within 3 months of account opening. In addition, you also earn 5,000 points for adding an authorized user who also makes a purchase within that time. Some other details:

  • 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases
  • $0 foreign transaction fees, plus chip-enabled for enhanced security and wider acceptance when used at a chip card reader
  • 1:1 point transfer to leading frequent travel programs at full value – that means 1,000 Chase Ultimate Rewards points equal 1,000 partner miles/points
  • Introductory Annual Fee of $0 the first year, then $95 — but it gets better. The best redemptions of Chase Ultimate Rewards points often come courtesy of their many transfer partners.

Ultimate Rewards points are extremely versatile. For starters, 50,000 Ultimate Rewards points convert into $500 cash back that you can redeem for a statement credit. Even better, you can 25% more value when you book travel through the Chase Ultimate Rewards travel portal.

But still, it gets better. The best redemptions for Chase Ultimate Rewards points often come courtesy of their many transfer partners. Because they are so valuable, Ultimate Rewards points transfer to the following programs at a 1:1 ratio:

Airlines

  • British Airways
  • Korean Air
  • Singapore Airlines
  • Southwest Airlines
  • United Airlines
  • Virgin Atlantic

Hotels

  • Hyatt Gold Passport
  • Priority Club
  • Marriott Rewards
  • Ritz-Carlton Rewards

We’ll likely delve into the benefits of each of these programs in future posts, but suffice it to say these programs can help you turn those 50,000 points into a wide range of rewards.

I like to book travel directly through the Chase Ultimate Rewards travel portal. It works similarly to other websites you might use to book hotel stays or airfare, but integrates your rewards and shows a detailed breakdown of your potential costs — whether you use cash, points, or a combination of both to book.

Barclay Arrival Plus World Elite MasterCard

One of the most popular travel rewards cards to hit the scene in the past few years is the Barclay Arrival Plus World Elite MasterCard. The benefits work like this:

Spend $3,000 on the card within 90 days of account opening to earn 40,000 miles. You’ll also earn two points per $1 spent on all purchases, which means that meeting the minimum spending requirement should net you at least 46,000 miles. Those miles aren’t redeemable only for airfare, however; 46,000 miles translate into a $460 statement credit that is redeemable for nearly any type of travel. Here are a few easy ways you could benefit from the $460 credit:

  • Buy round-trip airfare nearly anywhere in North America (the average price of a domestic flight in 2014 is $496).
  • Book at least three nights in an average North American hotel (average hotel stay was $137 for the first half of 2014).
  • Buy a three-day Park Hopper ticket to Disney’s Magic Kingdom Park, Epcot, Disney’s Hollywood Studios, and Disney’s Animal Kingdom on Expedia.com (retail price: $344).

These are just a few of your options. Since the travel credit can be redeemed for nearly any type of travel expense, the sky’s the limit.

I know several families in which both spouses have signed up for the card to earn two bonuses – a total of $920 in travel credit. Those funds can easily be spent on hotel stays, train tickets, or even two full days at the Magic Kingdom for a family of four.

Pair those cards with the free hotel stays you can earn with the Starwood Preferred Guest® Credit Card from American Express, and it’s easy to see how someone could score free park tickets and free lodging for a family trip to Disney. If you’re within driving distance, that’s even better.

Budgeting for the Rest of Your Trip

Credit card rewards can help you stretch your vacation budget, but you should always create a comprehensive plan for any other expenses that might arise. After all, free hotel stays, airfare, or tickets to attractions can only take you so far. You’ll still have plenty left to budget for, including expenses like these:

  • Meals, snacks, and drinks
  • Taxes and fees
  • Entertainment
  • Transportation
  • Taxis
  • Wireless Internet
  • Laundry services
  • Rental cars
  • Incidentals

There is no such thing as a free vacation, even if you pay for the majority of your trip with credit card rewards. It’s best to plan ahead and create a travel budget you can live with before you pull the trigger — or pack your bags.

With that being said, these kinds of rewards can help you get the most out of your travel budget by making at least certain components of your itinerary free or almost free. And with the right combination of rewards cards, you might be able to travel more often, stay in higher-end resorts and hotels, and save your money for experiences instead.

When it comes to rewards credit cards, the best thing you can do for yourself is to read all of the fine print before you sign up. Understand any fees associated with the card and how you can avoid them, as well as any deadlines for the specific offer you’re considering. And most importantly, never pay interest on any purchases you make on the card or you will run the risk of seriously diminishing or even canceling any rewards you earn.

Free hotel stays and travel can be a blessing for the whole family, but credit card debt is, and always will be, a curse that should be avoided.

Have you ever used a rewards credit card to help pay for a vacation? Tell us about it in the comments.

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