Credit cards and traveling

[FiguringItOut]

Hi all.

I read through some of the credit card rewards, travel rewards, etc, posts and unfortunately I am still very confused on what I can do.

I have a goal of taking my kids on a 1-2 week trip to Europe or South America in the next 18 to 24 months.  They will be in their early teens by then.  I am flexible as to where and such and I am also somewhat flexible on the time of the year (except the winter).  My main concern would be keeping costs affordable while giving myself and my kids an experience we’ll enjoy.  I am not looking for luxury, but basic accommodations with privacy, running water, and real beds are a must.  No camping, etc. 

I’d like to be able to cover as much of the cost of this trip with the bonuses/rewards if possible.  However, the more I read about various reward cards and different deals, ect, the more confused I get.  Some cards seem to have annual fees (which I don’t want to pay) that they wave first year, but if I use the card for 1 year and then cancel it, will I still have my awards to use later? 
I’ve never used card rewards for anything useful or have done it deliberately.  Years ago I had a Citibank checking account that gave points for using debit card which I used for car rentals few times.  But I don’t have that account anymore either.

Right now, I have 4 credit cards, Discover, Optima, Chase, and BoA.  BoA card is the only card that has any kind of reward programs (1 point earned for every $1 spent) that I could redeem for gift cards (3,000 points for $25 gift card).  I used this BoA card exclusively now for the past 4 months and have earned about 9,000 points ($3K of these were one off expenses due to medical issues).  I do not plan of redeeming anything from this card though for at least a year.

What card(s) would you recommend I looked into to use for the next year and half or so that I can build up rewards and use later to purchase air fare for 3 people and/or lodging or activities?  Airfare cost though is my main concern.

When I read that card from XYZ bank give 50,000 or 30,000 miles what does that mean?  How many miles should I be looking for to acquire to be able to cover a 3 person air fare?  I’m pretty sure they are not redeemed mile-for-mile, or will 30,000 actually buy my three round trip tickets to Europe?

I have steady income and credit score of about 790 with no dings on my credit history.  I think I should be able to qualify for most credit cards, though I’m not sure.  I haven’t gotten a new card in about 6-7 years, and prior to 4 months ago, haven’t used any of my old cards for few years (was debit card exclusively until I realized that my credit score was dropping because of lack of credit history).

I know a lot of these are stupid questions, but I am very new to this and find it all very confusing.

[shotgunwilly]

The best thing to do is the read through the credit card reward policies from each company. 

Usually, 100 miles equals $1 in travel. For example, if you get a 40,000 mile signup bonus from a credit card, then you have $400 in travel available to spend.  You will have to meet certain requirements to get the signup bonuses, such as spending something like $3,000 on the card within the first 3 months to get it.  This is not the same with every credit card company though, so that is why reading the program details for each is important. 

And my card recommendation for travel is the BarclayCard World Arrival.  40,000 signup bonus (which equates to $440 in travel expenses), plus 2.2% travel rewards on every purchase you make.

[FiguringItOut]

The best thing to do is the read through the credit card reward policies from each company. 

Usually, 100 miles equals $1 in travel. For example, if you get a 40,000 mile signup bonus from a credit card, then you have $400 in travel available to spend.  You will have to meet certain requirements to get the signup bonuses, such as spending something like $3,000 on the card within the first 3 months to get it.  This is not the same with every credit card company though, so that is why reading the program details for each is important. 

And my card recommendation for travel is the BarclayCard World Arrival.  40,000 signup bonus (which equates to $440 in travel expenses), plus 2.2% travel rewards on every purchase you make.

Thank you.

Is there a way to get around $89 annual fee on that card after the first year? 

Another question - can I combine few of these card reward bonuses for one travel purchase?  Or will I only be able to use this one card (for example) and cover the rest of the cost in cash? What is the advantage of people getting multiple cards with signon bonuses?

[arebelspy]

Go to www.richmondsavers.com and email Brad - he will help you out with his free travel coaching.

Is there a way to get around $89 annual fee on that card after the first year?

3 potential things:
1) Call at that point and ask them to waive the fee, sometimes they will
2) If they won't, ask to switch the card to another one they offer than doesn't have the fee ("downgrading" the card, but keeping it open, now with no fee).
3) Cancel it.

Another question - can I combine few of these card reward bonuses for one travel purchase?

Absolutely, depending on the cards.

What is the advantage of people getting multiple cards with signon bonuses?

More free money (literally, cash deposited to your bank account) and travel. 

[boris10475]

Well, you can cover almost all of your airfare/hotel costs with miles and points from different programs. Very good source of information is a forum named flyertalk.com. Basically airfares  are divided into 2 categories: revenue fares ( the ones are sold for cash) and award tickets ( the ones you can pay with the miles). Award ticket inventory is more limited, but with enough advanced notice and some flexibilty in dates and destination you can find the tickets you are looking for. The same goes for hotels, with the difference that it is usually much easier to find a room for points redemption than airfare with award redemption. Every major airline has loyalty program and those programs are affiliated with certain credit card issuer. For example United Continental has several cards issued by Chase, American Airlines has Citi issued cards, Delta is affiliated with Amex, Marriott hotel program has Chase cards etc. Those credit cards offer sign up bonuses. Let's say recently Chase had limited time offer for their United credit card that after you spend $2,000 within 3 months on the card you will receive 55,000 bonus United miles plus you will get 1 mile/ $1 spend, so your total will be at least 57,000 United miles once you meet your minimum spend. The miles get posted to your United account usually in the same or next billing cycle as you minimum spent is met and there is usually no way to take those miles back. First year annual fee is waived, you just close your card 6-9 months after you opened it and this way you avoid paying the fee for the second year. There are also set of different credit cards by Chase,Amex and Citi with proprietorial and transferable points. Basically once you meet the minimum spend the card issuer will give you the number of points in their own currency, which you have to transfer to the airline/hotel partner of that particular currency before you close the card. Otherwise those points will be lost. Chase Ultimate Rewards program has number of good airline/ hotel partners you can transfer to such as British Airways,United Airlines, Hyatt etc.
So, first you have to open up the account with airline/hotel programs and then choose the right credit card for yourself. You will have to learn ins and outs of all major programs to pick the ones right for you as there is no reasonable and cheap way to combine miles/points from different programs. US based airline programs are very good as they usually pass only taxes/goverment fees in additional to miles on award tickets. Most foreign airlines have programs which also pass so called fuel surcharges on "free award tickets" which in many cases make award redemption not a very cost effective option. Generally United and American Airlines will be good choices for your required destination, charging around 60,000 miles/round trip ticket in economy to Europe and around 35,000 to 60,000 round trip ticket in economy to South America. AA also has off-season awards for fall/winter/spring travel which requires only 40,000 round trip to Europe in economy and similar to SA. Taxes on award ticket to Europe are on the high side, depending on destination anywhere between $40 to $220 (UK departure tax is very expensive), SA taxes are a bit cheaper. Every airline program has an award chart indicating redemption requirement for each destination.Since you still have plenty of time before your planned trip you can do some reading and learning, choose the program and right credit cards and start working on accumulating the miles. Chase has limited time offer now for British Airways Visa - 50,000 bonus miles after you spend $2,000 in the first 3 months on your card. BA miles are not very good to Europe, but excellent to SA as you can redeem them to fly on their partners - AA or LAN without fuel surcharges. You can redeem miles from your account for anyone incl. your children free of charge, so basically you need enough miles in your account for 2 people and the same for your wife. She can open her own cards and accumulate enough miles for 2 more people, this way you can take the whole family. And lastly, but important, you do  not have to fly the airline whose program you are using to accumulate miles. Those  miles are good to book the flights on any partner airline. United miles can be used on Lufthansa, Austrian,Thai,Singapore etc, basically on any airline in Star Alliance and even on some of their partner airlines which do not belong to Star Alliance like Air Lingus

[boris10475]

The prices I indicated in above post are per person, 60,000 miles round trip/person in economy is standard now days, with some exception like AA off season 40,000 miles round trip in economy/person or BA 40,000 round trip on Air Berlin JFK-DUS or Berlin with about $100/person in taxes, US Airways has winter fares to Europe for 30,000 miles round trip but you can not use the partners on those 30,000 fares, you have to fly USAir metal from PHI. Just google "UAL award chart" or "Delta Award Chart" etc. and you will get the picture. Delta's mile are not too shabby for Europe either since their partner Aliatalia releases lately large amount of award seats on JFK-Rome and JFK-Milano routes, but Delta requires 60,000 miles round trip economy/person yera round. Also keep in mind some programs like UAL,AA,BA allow one way redemption for a half a cost of round trip for AA it would 20,000-30,000 miles one way to Europe, for UAL it would be 30,000 miles one way/person/economy. Delta is supposed to start allowing one way redemptions on 1/1/2015. One ways basically let you kind of "hedge" the availabilty against different program, as you can fly out to Eurpoe with one program and return with the different one. On top of that one ways make it easier for you accumulate required number of miles in each program to be able to take large family on the trip. For example instead of having to have 120,000 miles for 2 round trip tickets in your United account and the same for your wife you can have 60,000 United miles and 60,000 AA miles. It will let you achieve the same goals with more flexibility. But if you never played reward credit cards game you have plenty of time untill you exhaust all credit card options as there are really a lot to go around for several years and most of issuers allow you to "churn" ( to have the same card you previously had and still collect the bonus points) after about 2 years since you had the same card

[FiguringItOut]

Thank you so much.  I had to read this twice.  And then came back in a day and re-read it again.  This makes it a lot clearer to me. 

[boris10475]

You are welcome. There are quite a few blogs specializing in frequent flyer programs. Some of them are good for the beginners - Mile Value,The Points Guy, Mommy Points, Million Mile Secrets, Te Frugal Travel Guy. Some of them talk about advanced redemptions/things - View From The Wing, Travel is Free, One Mile at a time.And flyertalk has a lot of info, but more difficult to decipher. Just google the name of the blogs above and the word "for beginners" and you will get more info to start with

[Villanelle]

If you end up needing to pay cash for any of the air or hotel, check out Cardcash.com  They sell giftcards at a discount.  The discount rate varies depending on the company, but even it it's only 3%, it's something. 

I've been using them more and more for purchases I plan to make, or places I shop regularly (like Amazon).  Inventory is low right now because many people buy cards for the holidays, but conversely, after Christmas many people turn in cards, so check back starting in early January, if you know what airline you need. (and I believe they have some hotel chains as well).

I've been meaning to start a card cash thread, so I'll do that now.