CINCINNATI, OH (FOX19) - Finding hotel discounts and cheap airfare will save you money on family vacations. But using the right rewards card the right way can really boost savings.
Disney and Yosemite are just a few of the places Brad Barrett’s family has traveled to for free.
“We went to Europe this past summer -- the four of us flew for free. We went to Bermuda. We went to Boston for a little trip -- a whole bunch of these nice little family vacations," he said.
It was that first trip to Disney five years ago that forever changed Barrett’s life.
“I realized, OK, this is going to cost me $4,000. But maybe there’s a smart way to do it,” he said.
He figured out that by targeting specific, high-value credit card rewards programs he could cover all of his family of four’s travel expenses. That Disney trip only cost him $150.
“That was the point where we said, ‘OK, this is real, how can we benefit from this in the maximum amount?'” he said.
The family started deliberately opening up credit cards and getting the sign-up bonuses. They put all of their spending on the cards, but there’s one key: Barrett said as long as you are paying it off on time and in full, then to him, there is no downside.
That means never leaving a balance on the card -- then you can’t accrue any interest.
“If you pay any interest on these cards it immediately cancels out the benefit of any rewards that you’re earning," said Kim Palmer, who researches the benefits of credit card points when traveling for the website NerdWallet. “You want to really try to get a card that’s best for you at least five months before your traveling because that gives you time to accrue those points."
Palmer says you want to be earning at least 1 percent back on all your spending.
Nerdwallet has a comparison tool to help you figure out which card could be right for you. The website also crunched the numbers and found if you meet the spending requirements needed to receive the valuable point bonuses, and most Americans could see money back.
“If you just put all of your every day spending on a travel rewards card you will earn $901 the first year and $277 on each subsequent year," Palmer said. “So that’s really significant savings you can put towards your trip.”
Barrett ultimately left his job as a CPA at age 35 and started working full-time on his website richmondsavers.com teaching others how to use credit rewards points to travel. Then he teamed up with a like-minded friend and started the popular podcast ChooseFI, or choose financial independence. It has now reached 5 million downloads.
The Simply Money Point is that 60 percent of Americans with rewards cards make an expensive mistake by carrying a balance. That wipes out those rewards’ benefits. So only charge what you can pay off each month. Here is the link you’ll need to that travel card comparison site.