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Using miles and points from credit cards is hands down the best way to save big money when you travel with your family. If you can cover airfare for a family of 4 with airline miles and use hotel points to book your lodging, that takes the two major expenses out of your budget.
In an ideal world, you would be able to use points for all of your flights and hotels, but unfortunately, it isn’t always that easy. Sometimes you need to fit more people than a standard hotel room will allow. Sometimes you need to take a flight on an airline that doesn’t have a points program. You can’t use airline miles for a tour at your destination or that delicious meal you’ve been looking forward to since you booked the trip.
We’ve already talked about some of the benefits of high annual fee credit cards and also how you can enter the miles and points game with some entry level cards. However, there are still plenty of travel expenses you can’t use airline miles and hotel points for. To make travel as low-cost as possible, we want to find a way to cover those expenses as well.
Today we’re going to talk about a few credit card options that will help you pay for the travel expenses you can’t use your miles for. Specifically, we are going to look at the best cash back cards and the best cards that will reimburse a variety of travel expenses with the points you’ve earned.
Travel Reimbursement Credit Cards
We are trying to improve our experience and reduce the cost of our travel, right? So why not do that with a credit card that will let you reimburse the travel charges that you put on the card?
With return rates of 2%+, these cards are great for canceling out those flights you couldn’t use points for or that private rental with the private pool that you just had to stay in. As long as the charge codes as one of the appropriate travel categories, it will be eligible for reimbursement with the points you have earned with either of these cards.
Capital One Venture Rewards
Annual Fee: $0 for the first year, then $95
Bonus: 50,000 miles after $3,000 spend
Earning: 2 miles per dollar spent on all purchases
Limited Time Bonus Earning: 10 miles per dollar spent at hotels.com/venture (expires 1/31/2020)
This card lets you go online and request reimbursement for any travel purchases that you put on the card. Miles are worth 1 penny each when redeeming, so this card effectively earns 2% back on your spend. Travel categories for Capital One include airlines, hotels, rail lines, car rental agencies, limousine services, bus lines, cruise lines, taxi cabs, travel agents, and timeshares.
Barclaycard Arrival Plus World Elite Mastercard
Annual Fee: $0 for the first year, then $89
Bonus: 40,000 – 50,000 miles after $3,000 spend
Earning: 2 miles per dollar spent on all purchases
Like the previous card, this card allows you to go online and reimburse the travel purchases you have put on the card. Points are also worth 1 penny each when redeeming. However, there are a couple of differences.
Barclaycard sets a minimum redemption level of $100 (10,000 points) for a travel expense. If your charge is lower than that, you will not be able to reimburse it.
Also, when you redeem for a travel purchase, you get a 5% rebate back on the points you used. For example, if you redeem 10,000 points for a $100 charge, you will get 500 points back as a rebate. This increases the value of the card points and as a result, it effectively earns 2.1% back on your spend.
Travel categories for Barclaycard include airlines, hotels, motels, car rental agencies, travel agencies, discount travel sites, taxis, limousines, ferries, timeshares, trains, cruise lines, campgrounds, and buses.
This card is not currently available for new applications. We have included it here because there has been no announcement from Barclaycard that the Arrival Plus was being discontinued. In addition, Barclaycard has temporarily closed new applications in the past, only to reopen them shortly thereafter.
Cash Back Credit Cards
Cash is king. There’s a reason for this saying. When you want to cover the cost of something, it’s hard to beat good, old-fashioned cash.
Yes, the cards above are great if you want to reimburse something that is in one of the proper travel categories. But what if you want to reimburse an extravagant meal or a smaller tour that isn’t coded as travel? Well, that’s where Cash Back Cards can come in handy.
All of the cards below will earn at least 2% cash back on your purchases. The category bonuses on a couple of them can help you build your cash back balance even quicker. With strategic use of the right cash back card, you can earn enough to cover most of the miscellaneous expenses that come up as you travel.
Citi Double Cash Card
Annual Fee: $0
Bonus: $100 after $500 spend
Earning: 1% cash back on purchases and an additional 1% cash back on payments
Targeted at lower-income customers, this card earning 1% on purchases and then rewards you for paying your bill with an additional 1% cash back when you do. For those of us who pay off our credit cards in full each month, that means this is just a straight 2% cash back card. The bonus is nice with a low spend required, and no annual fee means that you can keep this card for as long as you want to.
Fidelity Rewards Visa Signature Card
Annual Fee: $0
Bonus: $100 after $1,000 spend
Earning: 2% cash back on all purchases
This card is a bit tricky for redemption. You can get 2% cash back on all of your purchases, but only if you redeem the points you have earned into a Fidelity deposit account. Of course, you can then immediately withdraw that cash if you want to, but it is important to note that you do have to set up an additional account to get the best value out of this card. No annual fee makes this card a keeper and the $100 sign-up bonus is a nice way to start off.
Blue Cash Preferred From American Express
Annual Fee: $95
Welcome Offer: $200 after $1,000 spend
Earning: 6% back on up to $6,000 in grocery purchases per year, 3% back at US Gas Stations and select department stores, 1% back on all other purchases
The earning structure is a bit complex for this card, but if you maximize the grocery spending and put a decent amount of gas and department store purchases on this card, you can really make a lot of cash back each year. There is an annual fee of $95 so you need to make sure that you are earning more than that in cash back each year to make keeping the card a good choice. The $340 you can earn from grocery purchases easily covers that fee though.
Discover It Card
Annual Fee: $0
Bonus: First-year Cash Back Match
Earning: 1% on all purchases and 5% quarterly categories
This card has a base earning of 1% on all purchases, but they also have quarterly categories in which you can earn 5% cash back on up to $1500 in purchases. If you take advantage of those categories, you can earn an additional $300 back each year. In addition, Discover will double the cash back you have earned with this card at the end of your first year. That makes this a 2%+ card the first year and the $0 annual fee means you can keep it as long as you want.
Alliant Cash Back Visa Signature Card
Annual Fee: $0 for the first year, then $59
Bonus: higher 3% cash back rate for the first year
Earning: 2.5% cash back on all purchases (3% first year)
This is the highest earning cash back card available. It earns 2.5% cash back on all of your purchases for as long as you have the card and as a first-year bonus, they will give you 3% instead of the standard 2.5% for the entire first year’s purchases. It’s hard to beat getting that much cash back. To apply for this card, you do need to be a member of the Alliant Credit Union, but you can join with a minimal donation (think less than $20). The card is marketed as being designed for those who spend more than $50,000 annually on their credit card, so approvals may be a bit tougher if you do not have a high income.
To Sum It Up
Airline miles and hotel points can do a lot to reduce your travel costs and improve your vacations, but there are plenty of expenses other than flights and hotels that come up when traveling. If you really want your vacations to be as low cost as possible, you need to work a cash back or travel reimbursement card into your rotation.
All of the cards we went over above are great options that will help you reduce your costs. You just need to decide which one is right for you, based on your spending patterns.
If you mix in cash back with miles and points earning and play your cards right (credit cards, that is), you might just be able to make your next trip as close to free as possible. If you think you’re ready, check out some of Traveling Dad’s favorite offers here.
RESPONSIBLE USE OF CREDIT WARNING: Points and miles from credit card spending are amazing if you never carry a balance on your card and never pay interest. This “hobby” — though it can quickly become a way of life — is for those who can use and pay off credit cards in full each month. Understand the FICO credit score equation, how opening and closing cards affects your score, and how you are most likely to be approved for the specific card you want.