How to Use Rewards Points

Make your next big family vacation affordable with points.

A lot of people are nervous about using credit cards and trying to earn rewards points, but if you have decent credit and are even a little organized, using points can save you large sums of money and allow you to have wonderful experiences that you may not necessarily be able to afford otherwise, especially if you have a large family.

So how do we do it?  The steps are fairly simple.  First, you’ll want to apply online for a credit card that offers a large rewards bonus.  I’ll use my personal favorite, Chase Sapphire Preferred, as an example.  This card offers 80,000 bonus points, which is equivalent to $1000, after you spend $4000 in the first three months.

The spending $4000 part scares a lot of people off, but it shouldn’t!  Most large families are going to spend that much in just food in three months – think about all of your trips to the grocery store, plus things like medical bills, school supplies, clothing, diapers, etc.  Plus, if you use your card to pay bills, like your cell phones, power bill, cable and internet, you can usually very easily spend the required amount, without spending a dollar more than you normally would.  If not, you can always prepay a few bills or get a few large gift cards that you will definitely use over the next few months to meet the spending threshold.  

So, say you apply for a rewards card and receive it the next week.  Set up your account online so you can easily see your spending and points, and pay your bills on time, obviously.  Then immediately start using your new card for everything. You can add your spouse or other family members as authorized users on the website or by calling, and sometimes credit card companies even offer bonuses for doing so.  There are dozens of cards to choose from with various spending thresholds (many lower than $4000), but most of them are very feasible.  This post talks about some of our favorite options.

You will need to make sure you pay off your card as you go, of course, so that you don’t get hit with late fees and high interest payments, and you never want to spend money that you don’t have, so just put your regular day-to-day costs that you normally spend on your card.  Never overspend just to meet the spending thresholds. I set calendar reminders to pay all of my cards twice a month. Because I have been using rewards points for many years and have multiple cards, I keep a spreadsheet so that I don’t forget any.

Once you have spent the required amount of money, the points will show up in your account online, and then comes the fun part of getting to use them!  I usually try to plan in advance to use my points within the first year of getting them.  Most of these cards charge an annual fee.  The Chase Sapphire Preferred, for example, charges $95 annually.  So, you’re paying $95 to get $1000 in travel.  That’s a pretty good deal!  But many cards even waive the annual fee for the first year, so if you plan well you can get the card, meet the spending threshold, use the points and cancel the card all in the first year so that you never pay a dime.  Or better yet, you can often downgrade your cards to ones without an annual fee rather than cancel them, which can be better for your credit.
  
You will typically access your rewards through a portal you find on your online account, and each type of card will offer different options for travel.  Chase is my favorite because it offers endless options.  You can find pretty much any airline, a ton of hotels and other types of accommodation, such as houses and cabins, plus rental cars, and other options, And, if you find that you’re not able to use it for travel, you can use it to make purchases on amazon, get cash back, transfer to another card, or use it in a number of other ways.  So it’s safe to say, you will get back that $95 one way or another.

Ready to give it a go? Apply for Chase Sapphire Preferred or jump on over to our list of favorite cards.  Have fun!

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