Diversify your rewards cards to pay for bucket list trips

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A mix of airline, hotel, flexible rewards and cash back cards has its advantages

Travel and cards writer
Travel expert who writes the “Have Cards, Will Travel” column for CreditCards.com

How to earn an exotic vacation at the grocery store

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When it comes to your
financial portfolio, you’ve likely heard the advice that it’s never wise to “put
all your eggs in one basket.” This nugget of wisdom also holds true for credit
card points-collecting – especially if you’re planning a big bucket list trip. 

In the world of points and
miles travel, one credit card rewards program – even the most flexible points-earning
bank programs – will never meet every travel need. Diversifying the buckets in
which you’re earning reward points is a smart way to ensure you’ll be able
to pay for as much of it as possible with the points
and miles you’ve earned from your rewards credit cards. 

The problem with a single-card earning strategy 

In the early years of my
credit card rewards points collecting, all of my travel credit cards were from
Citi’s American AAdvantage family of rewards cards. The Citi AAdvantage Mastercard
was my very first points-earning card – and while it has undergone many
revisions in the past 10-plus years, it’s still a card I keep in my arsenal. 

The reason I selected this as
my first card was simply that I flew American a lot, so it made sense to
have a card to help me stockpile points in the AAdvantage program. 

The problem, however, was when
there wasn’t an award ticket available through American or its oneworld
partners – either  because of
availability or routing – leaving me with no other options other than to purchase the
plane ticket I needed. 

With only one credit card, all
of my points were hostage to the whim of American Airlines. 

As I grew older in years and wiser
in points, I added the Chase United Explorer card to my wallet. Even though I
didn’t fly United a lot, my goal was simply to earn enough points in this
account through my credit card spending so I had a backup plan when my
American points weren’t able to get me where I needed to go. 

Having a single credit card
strategy will help you amass great quantities of points in a single program,
but if you want to pay for various elements of a trip with rewards instead of
dollars – especially a big or expensive trip – you will want to think more broadly. 

3 steps to building the perfect credit card portfolio 

The perfect combination of
credit cards, and the number of cards you’ll want to have in your back pocket
is never going to be the same for everyone, yet there are principles you can
look to help you make the decision for yourself. 

Here are three tips for choosing
which combination of points-earning cards works best for your wallet as well as
your personal travel aspirations: 

1. Mix it up with airline, hotel and bank cards 

When
you’re thinking about a big trip, you’ll want to broaden your credit card  portfolio to include a combination of cards
that offer different types of benefits and are able to cover a range of your
travel expenses. 

Combining
the benefits from different types of credit cards allows you to earn the
rewards you need to pay for different parts of a trip. If you have, for example, both a co-branded
airline card like the United Explorer from Chase and a co-branded hotel card
such as the Hilton Honors American Express Ascend Card, through your daily spending
you’ll be banking points to cover both your flights and accommodations for your
dream trip – often the two largest expenses of any travel. 

Earning points in a flexible
program such as Chase Ultimate Rewards with a card like the Chase Sapphire
Preferred
is another way to open up your redemption options to both hotels and
airlines without having multiple co-branded cards. However, even flexible
points earners should consider mixing up their credit card portfolio to expand
the power of their rewards. 

I personally love having both
the Chase Sapphire Reserve card and the World of Hyatt Credit Card (a flexible
card and a co-branded hotel card).  Even
though I can redeem Ultimate Rewards points for Hyatt stays directly without having
the Hyatt specific card, I get maximum benefit when I use the cards together. 

Anytime I’m short on World of
Hyatt points, I can top up my account with an instant transfer from my Ultimate
Rewards stash. When I redeem my points through Hyatt for my free night, I get the
added be benefits of free upgrades and late checkout because I have complimentary
Hyatt Discoverist elite status as a World of Hyatt card member. 

As you expand your portfolio,
you’ll find you may keep some cards in your wallet because of their points
value, while others you may use simply because of the value of their associated
benefits. You may even find yourself adding cards to mirror your growing travel
desires as your bucket list evolves. 

See related: 5 ways hotel cards add up to big savings

2. Don’t forget cash back 

When we focus on travel
rewards cards, we often completely focus on points and miles programs, and fail
to consider the travel power of the old-yet-reliable cash back credit card. 

Cash back cards often come
with no annual fee and pay you a small percentage back of all the money you
charge. Within this portfolio are travel-specific cash back cards, such as the Barclaycard Arrival Plus World Elite Mastercard. These cards reimburse you the percentage of earned cash
back specifically to cover travel-related charges. 

The real benefit of having a
cash back card in your travel rewards card portfolio is that cash back cards are
a great way to cover the costs for parts of your bucket list trip that you
won’t be able to pay for with points through a traditional rewards program.   

For example, if you’re headed
to Tanzania to do the common bucket list trifecta trip of the Serengeti safari,
Kilimanjaro climb and Zanzibar recovery weekend, you should easily be able to
cover your airfare, transit hotels and Zanzibar hotel nights on points and
miles with a little bit of savvy. (I highly recommend using the sign-up bonus
from the World of Hyatt Credit Card to book the Park Hyatt Zanzibar in Stone
Town for your Kilimanjaro recovery.) 

In this case, airfare and a
few hotel nights are only two-thirds of your trip. While you can’t use
traditional points to pay a safari operator or tour outfitter, cash back
rewards can come in very handy. 

Simply pay the tour operator
with the cash back credit card you’ve been using to earn cash back credits, and
these credits will be applied to the charge of the tour. This is also a great
strategy for booking cruises, package travel deals or alternative
accommodations that points generally won’t cover like Airbnb or Vacasa stays. 

See related: Cash back cards: the key to off-the-grid travel and adventures

3. Think about how you earn (not only how you
redeem)
 

While matching the cards in
your wallet to your travel aspirations will help ensure you get the points for
the redemptions you want, it’s also smart to consider your spending patterns when picking cards to apply for. 

If your primary expenses are weekly trips to the supermarket to feed your family and gas fill-ups to
drive your kids to after-school activities, make sure you have cards in your
wallet that help you take advantages of grocery store and gas station bonuses (such
as the Hilton Ascend card that earns 6x points at supermarkets).

So, how many cards are in my
wallet? While I personally have about eight cards in my portfolio – because I
take a bucket list trip at least once a year and maintain elite status in two
airlines and four hotel programs – the average person would more commonly have somewhere
in the range of two to four different rewards cards.  

Remember, it isn’t about how
fat your wallet is, or if you have the same cards your neighbor swears by.
Picking the cards that align with how you spend money and how you want to spend
your points is the golden egg that will get you off the couch and on the road
for your bucket list adventure.

See related: Video: Master your bucket list with points




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