credit cards

Take a vacation on your credit card rewards

Racking up the points

Using a robust rewards credit card to pay for everyday purchases -- with the caveat, of course, that you're paying off monthly balances in full, lest you lose the points to interest -- is the obvious way to accumulate points over time. "Run as many household bills through your preferred credit card," Perkins says. You'll still be paying off your credit card bill every month with the funds you had planned to use to just pay the bill, but this way you're getting something out of it.

There are also ways to rack up rewards more quickly.

"The most lucrative by far is credit card sign-on bonuses," says Greg Davis-Kean, author of the Frequent Miler blog. These promotions allow prospective cardholders to earn tons of miles or points once they meet certain spending thresholds. For example, one credit card company is offering 40,000 bonus points -- the equivalent of $400 in gift cards or $500 in travel rewards -- if a new cardholder spends $3,000 in the first three months of opening the account.

Example

  • Initial bonus offer: Spend $3,000 within three months and earn 40,000 points.
  • Bonus points: Earn two points per dollar on dining and travel expenses.
  • Initial sign-up points: 40,000
  • Points from initial spending: Between 3,000 and 6,000
  • Total points: 43,000 to 46,000
  • Cost per point: Approximately 6.9 cents

Note: Some credit cards offer even more points and dividends that can make your cost per point even better.

The caveat here is to pick your introductory incentives -- and their associated credit cards -- wisely. Remember, you'll have to spend to qualify for the bonus and you don't want to wind up with credit card bills you can't afford. Plus, opening too many credit cards in a very short time frame could ding your credit score.

Shopping for extra points

You can also earn extra points or miles by patronizing your issuer's online shopping portal. Oftentimes, these portals offer well over standard earning percentages on purchases you could be planning to make anyway. One credit card company, for example, has been known to feature 10 percent cash back at Macy's. "Depending on your shopping habits, the points can add up fast," Davis-Kean says.

And if you're looking to bulk up on airline loyalty points, check to see if your preferred carrier has a dining program. "If you drink at one of their approved restaurants or bars, you automatically get points," says Jason Kessler, founder of FlyandDine.com.

Other tips and tricks

Travel rewards credit cards "come pretty well-loaded with benefits," Winship says, so anyone who flies enough, even for business, to warrant their often high annual fees may want to add one to their payments arsenal.

Benefits include free airport lounge access, waived baggage and/or foreign transaction fees and even additional redemption options, such as redeeming miles for a travel statement credit.

The best card for you, however, depends primarily on which airline or hotel you're most likely to frequent. It's not a good idea, for instance, to apply for an airline card if the carrier doesn't have a hub in your area.

Winship also suggests customers call up airlines if they're hitting a wall when trying to book award tickets online. While many carriers charge for phone service, the fee will be imposed only if the customer books a flight, and the trade-off may be worth it.

Customer service representatives "can do things that you can't do," Winship says, which in turn enables customers to "increase significantly their odds of getting where they're going using" miles or points.

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