Tuesday, August 20, 2013

Why A Rewards Credit Card Is Good To Have When Checking Items Off Your #BucketList

The Wings and Waves Waterpark in McMinnville Oregon

Disclosure: Sponsored by Capital One. The opinions expressed herein are those of the author and are not indicative of the opinions or positions of Capital One.

According to a recent Capital One survey, money is the most commonly cited reason why people don’t travel to a destination on their #BucketList. And over half the people who do, don’t use travel rewards. 
Sure, I am an expert in travel rewards, but I still find that to be amazing. 

I think that travel actually represents ‘the low hanging fruit’ of the personal finance world. As someone with family all around the country and all over the world, I know that travel will always be a large part of my budget (even if I didn’t have so many destinations on my #BucketList). A typical trip can cost thousands of dollars, and it just makes the most sense for me to spend my time looking for savings there rather than clipping coupons for 50 cents off of peanut butter.

Last week, I shared my Bucket List over at Wise Bread; the list of places that I had to visit sometime in my life. Everyone has a list like this either written down or in their dreams. But how do we turn a list like this into reality if we still need to plan for the rest of our lives? Like so many other costly dreams, the answer lies in our personal finances.
Have you ever gone on down a water slide out of a 747?
How rewards credit cards help you save for your next dream vacation

As a personal finance expert, I always pay my credit card statement balance in full every month, so it just makes sense to charge all of my purchases to it in order to earn the most rewards. With every jar of peanut butter and every tank of gas purchased, I earn credit card rewards that I use to fulfill my family’s dreams. For example, with a Capital One Venture Rewards Card, you earn double miles for all purchases, and each mile is worth one cent each as a statement credit towards any travel related expense, and better yet, these miles never expire. This includes airfare, hotel, car rentals, train trips, cruises, and tours. So that’s the equivalent of 2% of your spending back in the form of travel rewards that can be purchased the way your normally do.

How to take great vacations with your credit card rewards

Let’s say that a family uses its credit card as a method of payment for all of its daily expenses including gas, groceries, entertainment, and even some utilities. A family that charges $2,000 a month will earn $480 a year worth of rewards, using the Venture card that offers two miles per dollar spent. $2,500 a month earns, $600 a year worth of rewards, $3,000 earns $720 and so on.

When it comes time to book your dream trip, that money can be used to stay at any hotels, rent any car, or fly on any airline. For example, one item on my #BucketList is to stay at the Jules Undersea Lodge in Key Largo, Florida. Underwater packages for two people start at $800 and include pizza delivery, although filet mignon and lobster is available. Since you can’t use hotel points there, the only way to use credit card rewards is with miles from a card like Venture Rewards.
Yes, it is as fun as it looks!
5 tips on how to get the most out of your rewards cards

Since so many people are just getting started earning credit card rewards, allow me to share a few tips on how to get the most rewards possible:

1. Use a credit card as your primary method of payment. Credit cards offer unmatched convenience and security, so rewards are just one of the many reasons I reach for plastic whenever possible. For example, I have been able to earn credit card rewards when I pay my bills for cell phone and Internet service.

2. Choose the right card. I have written reviews on nearly every credit card offered, and I can’t tell you how many reward cards just don’t measure up. Many cards offer a mere 1% cash back or only one mile per dollar spent. Take your rewards seriously and look for the card that offers the most valuable rewards.

3. Always pay your balance in full. Credit card rewards only make sense for those who avoid paying interest on their charges. Those who carry credit card debt should be looking for the lowest interest rates, and not worry about rewards.

4. Use your rewards. It sounds obvious, but so many people save their rewards for years and never get around to using them. Eventually, some forget about them while others miss their chance in life to take their dream vacation for one reason or another.

5. Don’t overspend. Use credit cards as a method of payment, but never spend more to earn rewards. Even the best returns will never offset the cost of making unnecessary purchases.

The beauty of credit card rewards

Sure, we can analyze the value we receive from each dollar spent using a rewards credit card, just like we calculate the value of our investment portfolios. But these programs are not investments; they are rewards for our loyalty. When it comes time to cash in our rewards, our miles offer us the perfect opportunity to check off an item on our #BucketList.

I invite you to join in and share your Bucket List. You also can visit Capital One's Tumblrpage and submit some of the experiences that are on your bucket list. We will be selecting a few and you may have it brought to life in a cool illustration.

So, what's on your travel #BucketList? Have you taken any trips on your #BucketList lately? If not why haven’t you? Go ahead and share it with me via a tweet, a comment on this post, or link to a video.

1 comment:

sci said...

Travelling is na expensive pleasure to me and my family. Since some years ago now we haven't travel to destinations that are further than 10 000 miles. Our holidays are much more modest than before the crisis. Travelling Rewards on credit cards are very good idea, but it's for people who so and so travel a lot. The more you travel the more you save! But you have to have money for travel, what you save is like an extra bonus.