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9 Ways Your Credit Card Can Help You Travel for Dirt Cheap

9 Ways Your Credit Card Can Help You Travel for Dirt Cheap

Let me guess…

You see pictures on Instagram of exotic places. Facebook is littered with updates of your friend’s adventures abroad, and every time you close your eyes you picture yourself on a beach in the Caribbean, or exploring the cobblestone streets of France.

Yes, you want to travel. Unfortunately, however, you can’t afford it. A flight alone costs an entire month’s pay, let alone accommodation, travel insurance, and baggage.

Luckily, travel is becoming more accessible to even those of us who need to pinch pennies. Enter the travel credit card.

Now, you can travel for less (or even for free) with your credit card with these nine benefits.

1. Free Flights with Sign-Up Bonuses

If you’ve ever seen a credit card sign-up bonus that seems too good to be true, it’s probably…not.

Yes, you read that right. As more companies begin to offer credit cards (think Home Depot, WalMart) competition is becoming fierce. Consumers benefit through generous sign-up bonuses. Companies are trying to “out-bonus” each other.

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A sign-up bonus is simply a generous offer that you get upon signing up for a credit card.

For example, a card might give you $500 in cash, or enough points for a free flight. You can get a free flight, accommodations, and sometimes even an all-inclusive vacation with sign-up bonuses.

Look for cards with generous welcome bonuses and first year annual fee waivers (making it truly free) and make sure you can afford the minimum spend requirement to be eligible for the bonus (i.e. spend $500 in 3 months).

2. Free Flights with Companion Tickets

Companion tickets are another way that credit cards are competing with each other, and it makes it oh-so-good for the user.

With credit cards, it’s simple to save up enough points and use a welcome bonus to travel for free for one person, but what if you want to bring a friend?

Well, that’s where the companion ticket comes in. More credit card companies are offering companion tickets, where you book a flight and get a second ticket for super cheap (or free) on the same itinerary. How can you go wrong with that?

3. Free Hotel Stays

Easily one of the most expensive portions of travel is accommodations. Unless you’re willing to stay in run down hostels with roaches scuttling on the floor, you risk spending more on hotels than you did on your flight.

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Unless you use the right credit card, that is. Remember when I said more and more companies are beginning to offer credit cards? That includes hotels, too.

With a sign-up bonus, you can score 5 or more free nights with some hotels. If you are strategic with which cities you use your free stays in, this can cut your costs substantially.

4. Waived Foreign Transaction Fees

If you’ve ever gone on a trip with a non-travel credit card, you’ll know what I mean. It’s painful to get back from your relaxing vacation to see that you were charged hundreds of dollars in foreign transaction fees.

See, many credit cards charge a foreign transaction upwards of 2.5% over and above the exchange rate. But an increasing number of credit cards are now eliminating the fee, making it the cheapest way to spend money out of country.

If you change money at a foreign exchange counter at the airport, hotel or a tourist area, you can get charged in excess of 10% above the exchange rate. Snagging a travel card with waived foreign transaction fees is a budget-conscious move.

5. Free Travel Insurance Coverage

One cost of travel most people forget about is travel insurance. Unfortunately, travel insurance is a necessity but it’s easy to overlook when you’re budgeting for a trip.

However, with the right card you may be able to skip the travel insurance line on your budget.

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Most travel credit cards come with free travel insurance, and sometimes even trip protection insurance, as long as you book your trip with the credit card in question. Check the terms of your card for travel medical, trip cancellation, trip interruption, trip delay, lost baggage, car rental, accidental death, and even purchase protection. These travel insurances can easily be valued at over $500 per year, and will be yours for free with the right card.

Make sure to read insurance certificates to make sure you don’t fall into any “exclusions”.

6. Free Checked Bags

Did you know that hardly any airlines that offer free checked bags anymore?

It’s true, and it’s tragic. Now, you have to spend $25 or more just to bring your luggage on the flight. More people try to travel with just a carry on to avoid the cost, but you don’t want to have to resort to that.

Many airlines now are coming out with credit card rewards that include a free checked bag, saving you that potentially expensive surprise at the airport. (Make sure to find out whether it’s free for any flight or just flights you’ve redeemed points for.)

7. Free Access to Airport Lounges

Have you ever had to spend more than an hour at an airport?

If you have, you probably craved somewhere comfortable to hang your hat while you waited for your flight. That’s why airlines have introduced lounges. Lounges are usually reserved for business class tickets and frequent fliers who achieve elite tiers, and they can cost $75 per visit ($25 per guest).

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However, many travel and airline cards offer a number of guest passes to lounges – some even allow you to bring a guest for free.

8. Cash Back at the Gas Pump

If you’re more of a road tripper than an air traveler, you can still save money to travel through your credit card. You can get up to 5% cash back at the pump with multiple no fee credit cards, that either offer the promo in the first 6 months, or offer it as a rotating category.

This is great for road trips and RVs. You can find great sign-up bonuses for gas on certain credit cards, too.

9. Avoiding Expensive Security Costs

Many cities are prone to security issues – even the most desirable destinations.

For example, Barcelona is a wonderful city to visit, but there are high security issues with pick pockets and thievery. This is a surprisingly wide-spread problem across not only developing countries, but even first world countries like Spain.

A security issue is one of the most expensive things that can come up on a trip. That’s why travelling with credit cards rather than cash will save you big time.

If your credit card is stolen, you can cancel it right away and you will usually have a level of protection against unauthorized purchases. If cash is stolen, it’s lost forever.

Credit cards are sent from the travel Gods to help people save money on their trips.

And if you’re not American, don’t worry. It used to be that only Americans could benefit from travel rewards, but now Canadians have great travel credit card options, too.

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Marc Felgar

Marc Felgar is an aging, health & senior care expert focused on improving the lives of mature adults.

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Last Updated on August 20, 2019

How to Set Financial Goals and Actually Meet Them

How to Set Financial Goals and Actually Meet Them

Finances can push anyone to the point of extreme anxiety and worry. Easier said than done, planning finances is not an egg meant for everyone’s basket. And that’s why most of us are often living pay check to pay check. But did anyone tell you that it is actually not a tough task to meet your financial goals?

In this article, we will explore ways on how to set financial goals and then actually meet them with ease.

5 Steps to Set Financial Goals

Though setting financial goals might seem to be a daunting task but if one has the will and clarity of thought, it is rather easy. Try using these steps:

1. Be Clear About the Objectives

Any goal (let alone financial) without a clear objective is nothing more than a pipe dream. And this couldn’t be more true for financial matters.

It is often said that savings is nothing but deferred consumption. Therefore if you are saving today, then you should be crystal clear about what it is for. It could be anything like kid’s education, retirement, marriage, that dream vacation, fancy car etc.

Once the objective is clear, put a monetary value to that objective and the time frame. The important point at this step of goal setting is to list all the objectives, however small they may be, that you foresee in the future and put a value to it.

2. Keep Them Realistic

It’s good to be an optimistic person but being a pollyanna is not desirable. Similarly, while it might be a good thing to keep your financial goals a bit aggressive, going out of the line will definitely hurt your chances of achieving them.

It’s important that you keep your goals realistic in nature for it will help you stay the course and keep you motivated throughout the journey.

3. Account for Inflation

Ronald Reagan once said – “Inflation is as violent as a mugger, as frightening as an armed robber and as deadly as a hitman”. And this quote sums up the best what inflation could do your financial goals.

Therefore account for inflation whenever you are putting a monetary value to a financial objective that is far away in the future.

For example, if one of your financial goal is your son’s college education, which is 15 years hence, then inflation would increase the monetary burden by more than 50% if inflation is mere 3%. So always account for inflation.

4. Short Term vs Long Term

Just like every calorie is not the same, the approach towards achieving every financial goal will not be the same. It is important to bifurcate goals in short term and long term.

As a rule of thumb, any financial goal, which is due in next 3 years should be termed as short term goal. Any longer duration goals are to be classified as long term goals. This bifurcation of goals into short term vs long term will help in choosing the right investment instrument to achieve them.

More on this later when we talk about how to achieve financial goals.

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5. To Each to His Own

The journey of setting financial goals is an individualistic affair i.e. your goals are your own goals and are determined by your want to achieve them. A lot of times we get on the bandwagon of goal setting only to realize later on that it was not meant for us.

It is important that your goals are actually your goals and not inspired by someone else. Take a hard look at this step at all the goals you’ve set for after this step, you will be on the way to achieve them.

By now, you would be ready with your financial goals, now it’s time to go all out and achieve them.

11 Ways to Achieve Your Financial Goals

Whenever we talk about chasing any financial goal, it is usually a 2 step process –

  • Ensuring healthy savings
  • Making smart investments

You will need to save enough; and invest those savings wisely so that they grow over a period of time to help you achieve goals. So let’s get down to ensuring healthy savings.

Ensuring Healthy Savings

Self realization is the best form of realisation and unless you decide what your current financial position is, you aren’t heading anywhere.

This is the focal point from where you start your journey of achieving financial goals.

1. Track Expenses

The first and the foremost thing to be done is to track your monthly expenses. Use any of the expense tracking mobile apps to record your expenses. Once you start doing it diligently, you would be surprised to see how small expenses add up to a sizeable amount.

Also categorize those expenses into different bucket so that you know which bucket is eating the most of your pay check. This record keeping will pave the way for cutting down on un-wanted expenses and pump up your savings rate.

2. Pay Yourself First

Generally, savings come after all the expenses have been taken care of. This is a classical mistake which almost everyone of us do. We pay ourselves last!

Ideally, this should be planned upside down. We should be paying ourselves first and then to the world i.e. we should be taking out the planned saving amount first and then manage all the expenses from the rest.

The best way to actually implement is to put the savings on automatic mode i.e. money flowing automatically into different financial instruments (for example – mutual funds, retirement corpus etc) every month.

Taking the automatic route will make us lose control of our money and hence will compel us to manage in what’s left with us thereby increasing the savings rate.

3. Make a Plan and Vow to Stick with It

Budgeting is the best to get around the uncertainty that financial plans always pose. Decide in advance how spending has to be made.

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Nowadays, several money management apps and wallets can help you do this automatically. It’s easy and who knows, you may just end up doing what people fail to do.

At first, you may not be able to stick to your plans completely but don’t let that become a reason why you stop budgeting entirely.

Make use of technology solutions you like. Explore options and alternatives that let you make use of the available wallet options and choose the one that suits you the most. In time, you will get accustomed to making use of these solutions.

You will find that they make it simpler for you to follow your plan, which would have been difficult otherwise.

4. Rise Again Even If You Fall

Let’s be realistic. It’s not like the world will come to an end if you made one mistake. This isn’t called leniency but discipline.

If you fail to meet your budget for a month, don’t give up the entire effort just like that. Instead, start again.

Remember that flexible plans are the most realistic plans. So go forward and try to follow your financial goals as planned but if for some reason, the plan gets out of hand for you, do not give up on it just yet. This has a lot to do with your psychology rather than any material commitment.

All you have to do is to stay on the road and vow to stay on it, no matter how much you fall down.

5. Make Savings a Habit and Not a Goal

In the book Nudge, authors Richard Thaler and Cass Sunstein advocate that in order to achieve any goal, it should be broken down into habits since habits are more intuitive for people to adapt to.

Make Savings a habit rather than a goal. While it might seem to be counter intuitive to many but there are some deft ways of doing it. For example:

Always eat out (if at all) during weekdays rather than weekends. Usually weekends are expensive. Make it a habit and you would in turn be saving a great deal.

If you are travelling buff, try to travel during off season. Your outlay will be much less.

If you go out for shopping, always look out for coupons and see where can you get the best deal.

So the key point is to imbibe the action that results in savings rather than on the savings itself, which is the outcome. Focusing on the outcome will bring out the feeling of sacrifice which will be harder to sustain over a period of time.

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6. Talk About It

Sticking to the saving schedule (to achieve financial goals) is not an easy journey. There will be many distractions from those who are not aligned with your mission. And it would be rather easy to lose the grip over your discipline.

Therefore in order to stay the course, it is advisable that you keep yourself surrounded with people who are also on the same bandwagon. Daily discussions with them will keep you motivated to move forward.

7. Maintain a Journal

For some people, writing helps a great deal in making sure that they achieve what they plan.

So if you are one of them, maintain a proper journal, where you write down your goals and also jot down the extent to which you managed to meet them. This will help you in reviewing how far you have come and which goals you have met.

Use this journal to write down all essential points such as your short term, mid term and long term goals, your current sources of income, your regular expenses which you are aware of and any committed expenses which are of recurring nature.

When you have a written commitment on paper, you are going to feel more energised to follow the plan and stick to it. Moreover, it is going to be a lot more easier for you to follow you and track your progress.

At this point, you should be ready with your financial goals and would be doing brilliantly with savings; now it’s time to talk about the big daddy – Investments.

Making Smart Investments

Savings by themselves don’t take anyone too far. However savings when invested wisely can do wonders and we are at that stage where we will talk about making smart investments.

8. Consult a Financial Advisor

Investments doesn’t come naturally to most of us therefore rather than dabbling with it ourselves, it is wise to consult a financial advisor.

Talk to him/her about your financial goals and savings and then seek advice for the best investment instruments to achieve your goals.

9. Choose Your Investment Instrument Wisely

Though your financial advisor will suggest the best investment instruments, it doesn’t hurt to know a bit about them.

Just like “no one is born a criminal”, no investment instrument is bad or good. It is the application of that instrument that makes all the difference.

Do you remember we talked about bifurcating financial goals in short term and long term?

It is here where that classification will help.

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So as a general rule, for all your short term financial goals, choose an investment instrument that has debt nature for example fixed deposits, debt mutual funds etc. The reason for going for debt instruments is that chances of capital loss is less as compared to equity instruments.

10. Compounding Is the Eighth Wonder

Einstein once remarked about compounding,

Compound Interest is the eighth wonder of the world. He who understands it, earns it… He who doesn’t… Pays it.

So make friends with this wonder kid. And sooner you become friends with it, quicker you will reach closer to your financial goals.

Start investing early so that time is on your side to help you bear the fruits of compounding.

11. Measure, Measure, Measure

All of us do good when it comes to earning more per month but fail miserably when it comes to measuring the investments; taking stock of how our investments are doing.

If there is one single step where everything (so far) can go wrong, it is at this step – Measuring the Progress.

If we don’t measure the progress timely, then we would be shooting in the dark. We wouldn’t know if our saving rate is appropriate or not; whether financial advisor is doing a decent job; whether we are moving closer to our target or not.

Do measure everything. If you can’t measure it all yourself, ask your financial advisor to do it for you. But do it!

The Bottom Line

This completes the list of tips for you to set financial goals and actually achieve them with not so great difficulty.

As you can see, all it requires is discipline. But guess that’s the most difficult part!

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Featured photo credit: rawpixel via unsplash.com

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