When you think of credit cards you probably think: debt, fees, and compounding interest. But, if you use credit cards correctly it can actually save money. I’m serious. Travel credit cards, in particular, have a lot of perks built in, not only saving you money on vacation but also during normal life.
Before I begin, using credit cards comes with the following warning:
- Always use credit cards responsibly.
- Never spend money you don’t have.
- Always pay your credit cards off, in full, at the end of the month.
Earning Free Travel
It goes without saying, the best way to save money with a travel credit card is using points to pay for your travel expenses. Big sign-up bonus can even fund an entire trip! Check out my article last week on exactly what to look for when signing up for a new travel card.
Airline Fee Credits
Airline fee credits are one of the best ways to utilize your credit cards and save you money while you travel. These credits usually cover a broad range of travel fees, from baggage fees before you board to wifi while in flight. It can also help you pay for extra food on planes or lounge access while you wait to board. Sign up for a card that complements your travel priorities.
Rental Car Insurance
So many trips start out by picking up your rental car for the week. A great way a travel credit card can help you save money is automatically covering your rental car insurance. Always check the fine print of your card for details on where you are covered and how much coverage you have before renting.
While you can’t cancel a trip just because you don’t want to go, some cards do cover you if get ill before a trip or bad weather strikes. Again, always check the fine print, but usually, reimbursements include hotel reservations, show tickets, and flight costs.
A huge perk some credit cards offer is access to lounges in airports worldwide. I was excited to use this perk simply as a way to deal with long layovers and constantly working on the road. I definitely didn’t realize at first just how much money it would save me.
First off, not having to pay for food or water at airports is a nice easy money saver and with how much I travel, it really adds up. But the bigger, unforeseen saving, is my ability to book any flight. Even those super cheap flights that include long or overnight layovers. I am no longer hesitant to book them since, with my card, I can easily get some shut-eye in a nice lounge instead of trying my luck in a loud terminal.
Foreign Transaction Fees
The last thing you want to see on vacation is a credit card bill with everything costing way more than you thought. It’s not just the exchange rate you miscalculated, you probably forgot about the foreign transaction fee. Most travel credit cards waive this fee which will save you tons of money while you travel.
If you buy an expensive item and the price drops soon after, your credit card may refund you the difference. Price protection comes automatically on Discover and Citi cards and on some Chase cards. The cards make it pretty easy to submit a claim and receive a timely refund, which gives you a little more peace of mind when making large purchases.
In the same vein as price adjustments, automatic coverage via extended warranties is a great perk on some credit cards. Always check the fine print, but forgo buying extra warranties and save that cash instead will get you on a plane to your next vacation sooner.
In my next article, I am going to show you how to be a tourist for only $25 dollars a day.
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