I hope you all had a fabulous week. I haven’t touched on it much yet, but I am a huge fan of travel. But I’m also a big fan of saving money. Seems like two conflicting things right? Well, it doesn’t have to be. Today I’m going to touch on one of my favorite tricks to make traveling more affordable: getting an airline/hotel credit card, specifically in my case, the United Card.
What Do Miles Do?
Airline and Hotel Credit Cards are pretty great for a number of reasons and those reasons tend to translate into points (sometimes known as miles). The general gist of this system is that every time you use your credit card provided by said airliner or hotel, you receive points or miles based off of the amount of money you spend. Those points can then be used for redemption at their chains and partnering facilities or agencies. For example, if you earn points at Hilton, you can transfer them over for points with United if you’d like or simply use them to decrease the price of a night at a Hilton brand hotel. Specifically in my experience and others, I’ve found that Marriott, Hilton, Delta, and United all tend to offer fabulous options in regards to points.
So what can you use points on? Well, they often offer a variety of options such as electronics, luggage, restaurant nights out, and apparel, but let’s be real, the treasure trove is in the free hotel stays or flights. Can you accumulate points in other ways? Absolutely! Hotels and Airlines generally already have login systems (which you should definitely have by the way if you don’t already as they are for the most part free) that will give you points and miles whenever you use their airlines or hotels. So why get the cards? Simply put, you will get more points faster. Which leads to our next inquiry…
United Airlines has been getting a lot of unwanted media attention lately (and for good reason, you should never have to worry about the safety and well being of your pets OR yourself while flying). However, this doesn’t mean that their credit card with Chase is any less of a financially smart card or that it doesn’t provide some of the best point earning rates and redemptions out there. And by the way, it does.
In general, United offers similar rates to other cards for transactions translating into miles, with a few slight differences. Most cards, like United, offer a general $1=1 point/mile deal, which United does, along with a $1 United Purchase = 2 miles. Pretty standard stuff. So again, what makes it different? The amount of end points needed to redeem something worthwhile, like an international flight. For example, a round trip ticket to and from Japan can cost as little as 70,000 miles with United while a Delta flight generally starts around 99,000. Way better deal with United. Oh, and if you are patient in applying for the card and apply when the deal is going on (it comes and goes), you can get 70,000 after spending $3,000 on the card within the first three months of receiving it. In other words, 1 ticket to Japan please!
Additionally, United also provides for free the MileagePlusX App. This app, which you can use without having the United Card, essentially is a way to purchase digital gift cards that you can use at various stores, ranging from Amazon, Home Depot, and even Panera. Each retailer provides different dollars to miles rates which range from .5 to 5 miles per dollar. But, for example, let’s say I buy a $10 lunch from Panera using my United Card and the MileagePlusX App. I get 10 miles for the gift card to Panera on my United Card, but then, since I purchased a digital gift card via the app, I get 50 miles through the app as Panera has (currently) a 5 mile per dollar rate, leaving me with a 60 mile bonus for my $10 lunch. Needless to say, you can certainly use the app if you don’t have a United Card, but seriously, why not use both?
Here comes the inevitable question then: If the United Card is so great, what’s the catch? Simply put, it’s hard to get and it’s not a card to be taken for ‘wild ride’ or to use as a ‘I’ll pay a few months later’ card. You have to have an excellent credit score to get the United Card and additionally, the interest rates for late payments are big. Think as big as 25% big depending on your credit score. So you spend $1000 on the card and forget to pay on time, that lands you owing $1250. Ouch. Are the other cards any better? Not really, maybe slightly, but not really. They all have different interest rates which will be determined based off of your credit score at the time of your application.
So How Do You Balance Your Options?
So why did I choose United and how do I avoid the interest rates? To avoid interest rates, I simply pay it off what I owe on time and I never put something on the United Card if I’m not sure that I can pay it off that month. So for example, I’ll use it for groceries and gas which I can cover each month with my paycheck, but not for a $1000 furniture purchase that comes sneaking up behind me that I have no savings for. But again, why United and not another card? I did a lot of research prior to getting the United Card and looked into how many different ways I could use each airline/hotel card that was out there. The United Card’s advantage to me was not only the dollars-to-miles for flights rates, but also the fact that United was simply the easiest airline for me to use and the most common. Additionally, I most often use hotels that partner with United for points, making it the most flexible and usable card for me.
Last question about these cards – why don’t I have multiple travel cards or cancel and reapply for cards to get more points faster? A few reasons. Applying for a lot of credit cards all at once brings your credit score down, making it harder to get approved for other credit cards, mortgages, loans, etc. in the future as it takes time to bring your score back up along with consistently good credit payments. Additionally, consolidating points on one card is better than having a smaller amount of points on multiple cards I find – you can use your points faster, which is key! Perhaps in the future, I will consider getting another card, but I prefer to wait a bit until I am sure my score will not be affected significantly.
So What’s the Take Away?
If you want to travel and save do your research and see if you feel comfortable getting yourself a travel related credit card. Determine if you feel responsible enough and capable of making those payments. It might lead you to significant savings down the line (convention goers, wouldn’t a free hotel room be nice??). Even if you don’t feel comfortable getting a card, get a login with any hotel or airline you use and start racking in those points/miles! While you might not be able to avoid some charges with points/miles, particularly during busy travel seasons, saving money anywhere, whether it be on a trip home or a family vacation, always means money staying in your pocket which you can use on something else. Like new books, movies, or that new hat you saw in the window the other day. Or an electric screwdriver. Or a Firebolt Broomstick. Hey, I don’t know, but I’m sure you do.
In any case, I hope this has been a good tip and advice piece on how to make your travel and vacations a bit more affordable. After all, who couldn’t use a good vacation?
For more information regarding the United (MileagePlus Explorer) Card, click here: UNITED CARD
For more information regarding the Marriott (Rewards) Card: MARRIOTT CARD
For more information regarding the Hilton (Honors) Card: HILTON CARD
For more information regarding the Delta (Skymiles) Card: DELTA CARD