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You’re probably wondering: how can I travel the world in luxury for free?! Doesn’t that require high credit card spend and ruining my credit score? Well I’m here to tell you that neither of those are true and you can travel for free! Traveling on a budget has never been easier. I’ve found that I can now travel to places that I once thought were out of reach because of points and miles. I prefer to maximize what my points can do by spending them on luxury items I couldn’t afford to experience otherwise. For me this is first class flights. For you, it might be staying in a 5-star hotel with your large family, or flying a family of 5 home in economy for the holidays. However you decide to travel is up to you. Anyone can do this, you don’t have to spend thousands on a credit card in order to get enough points for free travel. Your everyday expenses will get you here if you put some intention behind your spend. You want to do this too? Great! Let’s get started. This is a super basic, and straight forward guide for the beginner.

Something to note

The number one rule in the world of credit card points and miles is to pay off your credit card balance statement in full each month, period.

-someone wise

It’s very important to follow this rule. If you carry a balance on your credit card, you will be charged interest (usually around 19%), and nobody wants that. Any interest accumulated will totally negate the points you earn from spending. If you pay off your balance each month you are essentially earning free money from the bank in the form of cashback or points. Of course, in order to reap the rewards of credit card points and miles you need to be financially stable and have a solid foundation of personal finance.

Travel Credit Card Options

If you’re like the old me and have had a Southwest Airlines credit card for 10+ years, let me just tell you now that Southwest Airlines points are valued at 1.5cents/point. Say you spend $3,000 a month, or $32,000 a year. The SW credit card gives you 1x points on everyday purchases making your $32,000 worth of expenses worth 32,000. These 32,000 points can only be used for Southwest Airlines purchases and nothing else. A problem I have with these cards are that your points are only able to be used for that specific program (ex. SW card earns you points for only SW Airlines). Another problem I have with cobranded credit cards is that the spending categories are usually low.

Now, the new me uses a credit card with transferable points. These cards are from banks like Chase (Chase Sapphire- favorite beginner card) , American Express, Citi, and Capital One. Check out my Best Travel Card Offers page for the highest best offers on cards. If you use my links to apply, it’ll help my platform at no cost to you (thank you!). You can find the current highest welcome bonuses for opening a new travel credit card of your choice here. The points from these cards are valued around 2cents/point when used in their respective travel portals. This is the easy way to use points but let’s maximize them a step further. These points can be worth up to 15cents/point when transferred out of the travel portal to travel partners. The perk to using these cards are that the points can transfer to almost any major airline or hotel chain. Usually these cards have spend categories, for example, the AMEX gold card offers 4x points on groceries. This is where these cards really shine. Different cards offer higher multipliers for different categories of spend. These spend categories could be 2x on gas, 3x on travel, 4x on groceries and restaurants. Each credit card has different spend categories. This is the way to rack up points fast. These cards come with a signup bonus anywhere between 60,000-150,000 points. All you have to do is spend the minimum spend (usually around $4,000 in 3 months, or about $1,333 a month). For me that is totally doable with my normal, everyday bills. Yes, groceries, hardware stores, travel, gas all count! Now I wouldn’t recommend going crazy and signing up for a bunch of credit cards. But, having even just one transferable point credit card can change the way you travel! Once you accumulate points in your account you can transfer the points to any airline or hotel that is an affiliated travel partner. Instead of Southwest Airlines being your only option, you now of endless travel options! For example AMEX has some great travel partners including United Airlines, Delta, British Airways, AirFrance, Marriott, Hyatt. You can find a list of transfer partners with each card at one of my favorite websites here (thank you Upgraded Points!)

For me, I like to have a couple different cards with different spend categories. I like the AMEX gold for groceries and restaurants (4x points), Chase Sapphire for streaming services and travel (3x points), and Capital One Venture X for miscellaneous purchases (2x points). There are many other cards out there that have this feature. This way I can maximize each dollar I spend.

Earning

The quickest way to earn points is going to be from credit card sign up bonuses and referring friends. If you’re not a fan of opening a ton of credit cards I totally get that. And you shouldn’t be opening card after card. You only need a few to level up the way you travel. Once you open up a card, let your friend now how awesome the points are and refer them! You each will get a bonus for this. Other great ways to earn points are through shopping portals like Rakuten, AAdvantage shopping portal, and dining programs. You can link your Rakuten account to your AMEX and earn membership rewards points this way. I like to check my “offers” tab frequently (especially in AMEX) to see what the latest promotions are. I recently activated an offer for 5x points for a cruise I was already going to pay for! Of course always pay attention to your spend categories for bonus points through the point multipliers.

Redeeming

The fun part!! First thing to know: how do you know if you’re getting a good redemption? ALWAYS calculate what your cents/point valuation is. Always aim for more than 2cents/point. To do this, divide cost by points and multiply by 100. Not a math person?

With this in mind, should you be redeeming your points directly in the rewards portals? Absolutely not! By doing the math, you can see the points per dollar ratio is low from redeeming in the portal. You can book the exact same hotel or flight for much lower by transferring your points out of the portal. If you want to learn more about this, check out my post on transferring points here.

Next! How many points do I need? Well, depending on what you want to do with your points amounts vary. A business class (lay flat seat) to Europe and Asia will cost between 60,000-80,000 points per person one way. Economy class to Europe or Asia could be between 15,000-30,000. A hotel stay can range a lot, but typically a nicer hotel will cost about 25,000-50,000 points per night. At that price and if you stay 4 nights you will need 100,000 points per room. Remember programs like Marriott and Hilton offer 5th night free! Hyatt doesn’t offer this but they do not charge taxes and fees when using points.