How to Fund a Vacation with Credit-Card Points

Rewards credit cards offer a host of benefits for frequent travelers: reimbursement for lost luggage, damage coverage for rental cars, an easy system to dispute fraudulent charges, and, most importantly, points for everyday purchases that can be redeemed for airfare, hotels, and car rentals.  But they aren’t one-size-fits-all. Navigating the vast field of plastic can be overwhelming, and something I've spent years doing as a certified financial planner. Here, I've outlined the best options and broken down how you can earn enough to fund that weekend trip you’ve been holding off on. 

How to Pick the Right Card

Choosing a card is all about finding one that best matches your spending habits while balancing sign-up bonuses, interest rates (APR), and annual fees. Some cards give you one point back per dollar spent; others offer extra for eating out, travel, or streaming services. There are also sign-up bonuses that, depending on how much you spend, could almost double your yearly points earnings. Unfortunately, rewards cards have a downside: they typically come with a higher interest rate than regular credit cards. But pay it off in full each month, and you can make up for a higher APR with bigger point boosts and redemption benefits. 

Based on this criteria, three rewards cards came out on top: the Wells Fargo Propel, Cash Wise, and the Chase Sapphire Preferred. To illustrate how much you can earn with each, let’s map out some monthly expenses an average household of two might put on a credit card, based on my own spending and chats with friends: $400 on groceries, $250 on eating out, $250 in personal products (home improvement, drugstores), $125 on streaming services (Hulu, Netflix, Amazon), and $60 on rideshare services and taxis. This equates to monthly credit card expenses of $1,085 (or $13,020 a year). With this scheme, you would earn around 13,000 points—or $130—that year, enough for a night at a decent hotel or a couple of days with a rental car, depending on where you go. But combine this with bonus points and extra sign-up perks, and you could cover a whole vacation. 

Chase Sapphire Preferred

Get this card if you travel often and eat out a few times a week. It has a high APR and annual fee, but comes with a huge signup bonus for frequent spenders. Plus, you’ll earn a redemption bonus of 25 percent when you use points directly toward travel expenses. 

• Sign-up bonus: 60,000 bonus points if you spend $4,000 in three months
• Point accumulation: Double points for every dollar spent on travel (flights, hotels, rental cars) and dining out, and one point on all other purchases
• Annual Percentage Rate (APR): 16.99 to 26.99 percent
• Annual fee: $95
• Foreign transaction fee: $0
• Rewards: Redeem at Chase’s Ultimate Rewards and get 25 percent more points when they are reclaimed for airfare, hotel stays, car rental, and cruises.

Your potential one-year earnings: 85,260 points or $852.60. 

Wells Fargo Propel Card

This card is great for someone who travels a lot, but also likes some extras at home, as it issues three points per dollar on purchases on flights, eating out, gas, and streaming services. Plus, there’s no annual fee, or interest for the first year. However, be sure to keep up with your payments: the APR skyrockets after the first 12 months.

• Sign-up bonus: 30,000 bonus points if you spend $3,000 in three months
• Point accumulation: Three points for every dollar spent on travel (flights, hotels, car rentals), transit (gas stations, buses), meals out, and streaming services, and one point on all other purchases
• Annual Percentage Rate (APR): 0% for the first 12 months of purchases, 15.74 to 27.74 percent thereafter, depending on how much you keep up with your payments
• Annual fee: $0
• Foreign transaction fee: $0
• Rewards: Redeem for travel with most major airline and hotel brands, gift cards for hundreds of stores such as REI and Amazon, or cash back 

Your potential one-year earnings: 77,460 points or $774.60. 

Wells Fargo Cash Wise Visa

This is a great first credit card for someone interested in having the freedom to spend their cash back however they’d like, as it offers direct deposits into your bank account and no annual fee. The sign-up bonus and rewards points aren’t as big as other cards, however. 

• Sign-up bonus: $150 when you spend $500 in three months
• Point accumulation: 1.5% cash rewards on every dollar spent plus 1.8% cash rewards on purchases made using a qualified mobile wallet (Apple Pay or Google Pay) in the first 12 months 
• Annual Percentage Rate (APR): 0% on purchases for the first 15 months, 15.74 to 27.74 percent thereafter
• Annual fee: $0
• Foreign transaction fee: $0
• Redeem rewards: Redeem in the Go Far Rewards program for cash-back as a statement credit or direct deposit into your bank account. Cash rewards never expire. 

Your potential one-year earnings: 19,680 points or $190.68.

How to Use Credit Card Points

My husband and I paid for a recent weekend trip to Big Sur entirely with points. It took us about a year to build the 51,250 points on our Chase Sapphire card that was able to cover two nights at a swanky resort that would have otherwise cost around $625, thanks in large part to its 25 percent bonus on travel purchases. We also exchanged 40,000 points for $400 cash back from our Wells Fargo card to pay for gas, food, and activities. 

Every card has a redemption website that allows points to be exchanged for cash back or directly for travel expenses like hotels, flights, and rental cars. Start looking two to three months in advance in order to get the lowest prices. Cards also offer bonus deals on certain purchases—in a similar way to that of flash sales at brick-and-mortar stores—so it’s worth checking in every month or signing up for email blasts from your card rewards program. 

Redeeming directly for travel expenses versus cash back is usually a matter of preference, unless you’re using a card like Chase Sapphire, which offers bonus points when certain bookings, like hotel stays, are made directly through them. Before deciding on a card, though, you should check for its partnered brands to ensure that your points will make the most impact—if you mainly fly with Southwest, don’t get a card that gives you lots of Delta miles. You’ll also earn more points by consolidating your spending into one or two cards, rather than spreading it across multiple. I prefer to have one card that offers great cash-back rewards for my day to day, and one with extra bonuses for booking travel. 

As long as you’re smart about your spending, there’s no reason to not let your card earn money for you.