Don’t be alarmed, but you could be SITTING on a FREE vacation. 🚨
Between airfare, hotel costs, ticket prices for various experiences, merchandise, and more, your next trip could cost you a pretty penny. But what if you could get some of that trip for FREE? Lean in close, we’ve got some information you need to know.
Credit Card Points
If you’ve got (or sign up for) a credit card that provides you with points that can be redeemed toward travel, hotel stays, and other things, you could save some serious cash on your next adventure. In fact, you could be sitting on a FREE trip right now. So let’s break down what you need to know about credit cards, points, rewards, and how to navigate this realm to help you save BIG on your next trip.
A Basic Guide to Credit Card Points
A General Introduction
Many credit cards offer points, miles, or some kind of other “reward” for charging expenses to that card and paying off the amounts due. Essentially, these points and miles act as a way of incentivizing cardholders to spend money on that card and they reward those who remain loyal to a particular card or brand.
By buying things (sometimes specific things) with credit cards that offer these points/miles/rewards, you can earn those special bonuses. But be warned — there are typically a number of limits on what the points or miles may be used for.
The easiest way to understand how this all works is to look at an example. Let’s look at the Citi Double Cash Card. With this card, you get 2% cash back on purchases (1% when you buy and 1% when you pay).
The cash back is earned as what Citi calls “ThankYou Points.” So you really get 1 ThankYou point per $1 on purchases and 1 ThankYou point per $1 paid on those purchases.
You can then use those “ThankYou Points” to get a statement credit, direct deposit, or check, OR you can redeem the points and use them on gift cards or travel, or even do some shopping with the points on websites like Amazon or other places.
Another example we can look to is Chase Sapphire Preferred. This card gives you up to 5X total points on travel purchased through Chase’s Ultimate Rewards program.
You also get 3x points on money spent dining at restaurants, 3x points on online grocery store purchases, 3x points on select streaming services, and points on other purchases as well.
So basically that’s 3 points per $1 spent on grocery store purchases, 2 points for each $1 spent on travel purchases made with your card through the Chase Ultimate Rewards program, etc.
When you’re ready to redeem these points, you can use them to get gift cards, a statement credit, book travel, and more.
Typically, when it comes to redeeming points, you’ll go through the credit card’s website, where you can see exactly how many points you have, what their value is, and what they can be redeemed for.
Note that to take advantage of the points when it comes to booking travel, you may need to redeem the points specifically through the credit card’s website.
For example, with Chase points, you can use their Ultimate Rewards system to look for travel, redeem your points, and then pay off any balance (if needed). (This is different than just going to a hotel’s website and booking a stay as you might regularly do.)
Types of Points
As you may have realized from our brief summary above, there are different types of points that you might be able to earn depending on the credit cards you have. We’ll discuss some of these here so you know what to look for when searching for the right card or examining the cards you have.
Reward points — Rewards points are points that you get/earn by making purchases (sometimes only in select categories). Depending on the card, you might earn more points by making purchases in certain categories versus others. Remember what you’re earning here is POINTS, as opposed to dollars. And the value of your points may vary depending on what you redeem them for (in other words, your points might be more “valuable” or might get you more if you redeem them for X instead of Y).
Miles — With some credit cards, you can earn airline miles as you spend money with that card. You might earn something like 1-2 miles for every $1 spent on a travel-related purchase, or you might earn more. It all depends on the card and the types of purchases. As you earn more miles, you can then redeem them to buy a trip by using your miles (as opposed to cash).
Cash back — With some cards, you get “cash back” for a certain percentage of your spending each billing cycle. This can vary in terms of percentage. For example, you might get 2% for all spending (so if you spend $100 and there’s a 2% cash back, you’ll get $2). But you might get different percentages of “cash back” on purchases made on certain things (like travel, groceries, etc.).
These “cash back” points can be redeemed as a statement credit. But sometimes they can also be used as a credit toward certain purchases or be used for other things.
Things to consider when signing up for a credit card with points
If you’re in the market for a new credit card and are looking at which one to get, there are a few things you should be aware of BEFORE jumping into an agreement with any particular card.
First, keep in mind that you’ll want to make sure you can pay off all required payments. Some cards will ONLY give you certain points if you pay off the card (like how the Citi Double Cash gives you that 1% when you pay), and others might list any points earned as “pending” until you pay.
You could also get penalized by some places if you don’t at least make a timely payment of the minimum amount that is due on your statement. So if you’re really hoping to use your credit card to earn points, make sure you read all terms and conditions carefully when it comes to what payments will be required, and plan on making ALL necessary payments (a.k.a. not missing any payments along the way).
Another thing to keep in mind is that some cards that can earn you a lot of points come with an annual fee. That fee might be totally manageable, or it might push the card out of your realistic budget. You’ll have to determine if the fee is worth it for the potential points you could earn.
Finally, make sure you pay attention to where or how the rewards/points/miles can be redeemed and whether it makes sense for you. If you sign up for a card that only allows you to redeem points with one airline, but that is not the airline you prefer to use, then it likely wouldn’t make sense for you.
Are credit card points worth it?
It depends. This truly is something that only you will be able to answer depending on your spending habits, your budgets, and what you want to do. If you spend enough money to really earn a substantial amount of points and feel comfortable getting a credit card, it could be.
Some people see it this way — if you’ll be spending the money anyway, credit cards that give you the chance to earn points can give you a benefit for doing what you already plan to do. Why not get rewarded for something you’ll be doing anyway?
But not everyone likes using credit cards, some prefer to simply use a debit card, and there might be other personal reasons you may not want to opt for this route.
Additionally, you may find that you’ll need to really use the card and stick to using it for most (if not all) of your purchases to really rack up enough points to get a “free” vacation.
If you’re looking to really maximize your ability to earn points, you’ll want to look carefully at bonus point promotions that are offered when you sign up for a new card and spend a certain amount within the first few months.
For example: right now if you sign up for the Capital One VentureOne Rewards credit card right now (which has NO annual fee), they’re offering 20,000(!) bonus miles if you spend $500 within the first 3 months of opening the account. You can earn even more ($75,000 bonus miles) if you get the Venture Rewards Card from Capital One (which has a $95 fee) and spend $4,000 within the first 3 months.
Some of these spending thresholds might sound like a lot of money but if you’ve got rent payments coming up, a wedding you’re planning with lots of costs associated with it, or will be spending a lot during the holidays (thanks to all of those presents you have to buy), signing up for one of these cards could be worth it and could get you enough bonus miles for a nice trip.
Disney Credit Card
One card you might be wondering about when it comes to points is Disney’s own Chase Visa card.
You can click our post above for a full rundown of ALL the details you need to know about the card, but here’s a quick summary for the purposes of this post.
Disney has 2 credit cards: a free/basic card (no annual fee) and a Premier card ($49 fee annually).
Here are some details on the Premier Card:
- Sign-up bonus: If you are a new card member and you opt to get the Premier Visa, you could earn a $300 statement credit after spending $1,000 on purchases within the first 3 months of opening the account.
- Earn 2% in Disney Rewards Dollars on card purchases made at gas stations, grocery stores, restaurants, and most Disney locations.
- For all other card purchases, Premier Visa cardholders earn 1% in Disney Rewards Dollars.
- Redeeming rewards for travel: Rewards dollars can be redeemed for a statement credit to use toward airline travel. You’ll have to purchase your airline tickets with your Disney Premier Visa Card on any airline to get this benefit. Then, you can “pay yourself back” by redeeming any of the Rewards Dollars you have toward a statement credit.
Here’s what you need to know about the basic Disney Visa card:
- Sign-up bonus: If you spend $500 on purchases within the first 3 months after opening your account with a new Disney Visa Card, you could earn a $150 statement credit.
- Rewards: Earn 1% in Disney Rewards Dollars on all purchases made with their card.
- Redeeming rewards for travel: Those with the basic Disney Visa can’t redeem their Disney Rewards Dollars toward a statement credit for airline travel.
Redeeming “Disney Rewards Dollars”
With Disney’s credit cards, the points/rewards that you earn for your purchases are called “Disney Reward Dollars.” After you earn these, you can redeem them for a LOT of things.
Essentially, the way this works for most of the rewards is that you’ll redeem the Disney Reward Dollars to a redemption card. You can then use that redemption card to make Disney-related purchases.
You can use that Rewards Redemption Card to buy movie tickets at AMC Theaters (for Disney, Pixar, and Star Wars movies), or buy merchandise on shopDisney or in the Disney parks. You can also use your Rewards Dollars to pay for your Disney theme park tickets or pay for Disney World resort hotel stays.
Be warned though — the points you can earn with the Disney Visa Card are fairly small. You’ll only earn 1% or 2% MAX on your purchases. You may be able to earn a LOT more points through other credit cards, so you’ll need to take a look and see whether the Disney card is the best option for you.
But you’ll also want to keep in mind that the Disney Visa comes with more rewards than just the reward dollars. Visa cardholders can also sometimes get discounts on Disney merchandise, discounts on Disney vacations, and access to exclusive things in or outside of the parks.
Other credit cards may also come with their own unique perks too — like access to certain airport lounges, early boarding on flights, or other things — so you’ll want to take a look at more than just the points you’ll be getting when determining what’s worth it for you.
If you want the Disney card for the discounts and other perks, but don’t feel like it earns you enough points, you could still sign up for the Disney card without an annual fee, but focus more of your purchases on cards that provide you with more points.
Other Cards That Might Be Particularly Helpful With Disney Trips
While many credit cards could help you earn enough points to get a free vacation, some might be more beneficial than others when it comes to Disney World trips specifically.
For example, Marriott Bonvoy, which operates the Walt Disney World Swan and Dolphin and the Swan Reserve hotels, has its own set of credit cards through Visa.
If you opt for the Marriott Bonvoy Bold Credit Card from Chase (which has no annual fee), you can earn 3 Marriot Bonvoy points for every $1 spent at hotels participating in Marriott Bonvoy, and earn points on other purchases as well. Plus, each year you get 15 Elite Night Credits toward the next level of your Marriott Bonvoy Elite status.
You can then utilize your points to pay for a stay at some of these hotels. Just keep in mind that the points you’ll need might be substantial and it can take a while to earn the points needed for a stay.
If you typically fly to Disney World, then a credit card that provides you with airline miles or points that can be used toward flights might help your Disney World trip be that much cheaper too.
There are a lot of travel cards out there to pick from, so you’ll want to take a look at their respective annual fees, the percentage of points/cash back/miles they’ll provide you with, and how you can use the rewards.
Sometimes, an airline-specific card might be beneficial. For example, American Airlines has a credit card through Citi and United has a card through Chase. Depending on what airline you typically fly with and the number of miles you could earn, one of these might be worth the cost for you.
Card Tips in General
Before you sign up for a new credit card or try to utilize the points from that card for upcoming travel, here are a few tips to keep in mind:
First — look to see if there are any big bonuses you can get for signing up and spending a certain amount within a set time. If you’ve got some big expenses coming up that you could put on that card, you could get a BIG benefit for spending money you already planned to spend.
Second — remember that if you’re looking for a card that you can use to pay off your stay at a Disney-owned-and-operated hotel, you’re likely limited to the Disney Chase Visa. Other cards can give you cash back or other perks on your purchases (which might make them more worth it) but you can’t, for example, redeem Chase Points for a Disney World hotel stay.
Third — see if you have existing points on cards that have gone totally unused! As the title of this post indicates, you could be SITTING on a free vacation!
Fourth — see what you can redeem your points for. Maybe you can’t use them for airline miles or a hotel stay, but you could redeem them to buy items from places like Amazon that you’ll then use on your trip.
Make sure you look at all of your credit card redemption options and how to get the most value for your points. Can you get cash back, points, miles, or something else? How can you maximize your points and use them in a way that squeezes the most value out of them?
Sometimes it benefits to transfer those points to a travel partner or spend them within a specific category. Just be sure to look at the credit card’s specific rules.
Finally, know that it can take a lot to rack up enough points for a truly “free” trip. But even if your points can save you some money on an upcoming stay, that would be better than nothing!
And that’s a basic breakdown of credit card points and how they could get you a FREE trip. What credit cards do you recommend for those looking to get travel points and benefits? Tell us in the comments.
For more travel tips, check out our posts below:
- 5 laws you need to know before travel to Orlando
- Our team’s BEST air travel tips
- “I travel full time. Here are 8 things I keep in my car.”
And stay tuned for more Disney news!
What credit cards do you recommend for those looking to get travel points and benefits? Tell us in the comments.