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Imagine planning a vacation with free airfare, free hotel rooms, premium airport lounge access and even some free spending money. Sound like a dream getaway? It could be yours if you have good credit and know how to use it.
A good credit score is useful for more than just getting a low interest rate on a loan. You can gain access to top-tier travel and rewards credit cards, and open yourself up to the world of luxury perks that can help you take the vacation of a lifetime without spending too much.
Follow this quick guide for tips on how to use your good credit to take a vacation filled with freebies and perks.
1. Inventory the Cards in Your Wallet
Do you know the specific rewards or perks each credit card you own offers? If your answer is no, then empty out your wallet and re-read the agreements for each card until you know exactly what each one offers. This is the first step to optimizing your spending so you're always working toward earning a dream vacation.
2. Get a General Rewards Credit Card
Rewards cards come in many shapes and sizes, and a general rewards card—such as the American Express® Gold Card or the Chase Sapphire Preferred® Card—will help you accrue points you can use for a variety of things. Whatever card you get, make sure you can use the points you earn with this card for travel, hotels and even gift cards. Chase and American Express both have rewards programs for point redemptions, called Chase Ultimate Rewards and American Express Membership Rewards. These programs offer you flexibility in redeeming your points and may help you take the vacation you want if you learn how to navigate them. These cards are typically offered to consumers with good to excellent credit, so the better your credit score, the better chance you'll have when applying.
3. Get a Co-Branded Travel Card
You guessed it! These cards will help you accrue reward points that can be used for travel with a certain company. Some of these cards—like the Gold Delta Skymiles® Credit Card From American Express—also come with other travel benefits, such as lounge access, priority boarding privileges and checked-baggage credits. Depending on the card you have, as you rack up points, you'll be able to cash them in for travel rewards with your specific company. And if you use your card wisely, you might even be able to use this method to pay for a free flight or two on your next vacation.
4. Get a Co-Branded Hotel Credit Card
These credit cards help you earn rewards that you can redeem for hotel stays with certain companies. They typically give you amplified earnings for dollars you spend with specific hotels, and some offer special perks like elevated membership status and free nights each year. The Hilton Honors American Express Card, for example, offers 7 Hilton Honors bonus points per $1 spent on eligible purchases within the Hilton Honors portfolio and complimentary Hilton Honors Silver status. These cards typically only offer rewards that are redeemable at hotels within certain networks. In the case of the Hilton Honors American Express Card, you will only be able to redeem those awards for stays within Hilton's network. (You can often transfer reward points to different reward networks, but rules for these transfers vary from company to company.)
5. Optimize Rewards to Make Sure You're Getting Everything You Deserve
Once you know what cards you have and the rewards they offer, make sure to optimize your spending so you can accrue the most points possible. That means using different cards for restaurant and travel purchases depending on which card gives you more points for each dollar spent in each category. It may sound complicated, but if you accrue reward points for all your spending, you may be able to redeem them later for gift cards, hotels, flights and more.
Individually, the card types mentioned above have their own benefits—some specific to a certain hotel or airline and some that are more flexible. When combined, however, having all of these cards can put you in a good position to redeem your rewards across several different categories—which could make taking a complete vacation without spending too much very possible.
If you're ready to add a rewards card to your wallet, check out Experian CreditMatch™, which will match you with offers based on your FICO® Score*. If you don't quite have the credit score you need to land one of these rewards credit cards now, learn how to improve your credit score so you'll be successful when you do apply.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
*Credit score calculated based on FICO® Score 8 model. Your lender or insurer may use a different FICO® Score than FICO® Score 8, or another type of credit score altogether. Learn more.