There’s still time to plan an incredible summer vacation, while sticking to your financial goals. In today’s podcast episode, we explore different strategies and tips that you can use to craft the perfect and budget-friendly itinerary. 

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Here’s the recap of today’s 18-minute episode: 

• How to plan to pay cash for a trip
• The best websites for booking affordable hotels
• Strategies for booking flights
• How to use credit cards and points to maximize savings
• Creating a realistic yet flexible budget for your trip

Listen below or read the transcript that follows. 

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Eric:

All right everyone. I am so excited to be here with my friend Michelle Black. She is a credit expert and as many of you know, some might not., cCredit can often leverage into free and discounted travel using miles and points. But before we dive into that, we thought we’d chat a little bit about just general travel tips to travel on a budget. How does that sound, Michelle?

Michelle Black:

That sounds great.

Eric:

Yeah, so I know one thing I like to do when I’m searching around is to search around a lot. That’s one of my biggest ways I save money when I’m trying to find a hotel or a flight. How do you like to do a search if you are paying with cash for an upcoming trip?

Michelle Black:

Just search a lot. Don’t be afraid to take time. Check out a lot of different deal sites. Take a lot of notes. I’m old school so I like to just grab a pen and paper and jot down where I’m going to find the best deal. I leave a billion tabs open on my computer and just hunt around and see who’s going to offer the best prices. And I try to be flexible as well, so not get tied down to a particular hotel chain. I just try to go into it with an open mind and find out for whatever location I’m approaching who’s going to have the best deal on, say an ocean front hotel at whatever destination my family’s wanting to visit this summer, for example.

Eric:

Yeah, that’s a great idea. I like what you said there about multiple tabs because I am in the same club, usually let’s say I’m searching for a hotel, I try to be flexible on dates, just like you mentioned. I find that really helps. If you’re willing to maybe go midweek rather than check in on a Friday and check out on a Sunday, you might find a lot better deals. I know that can be tricky sometimes with work schedules, but again, if you plan far out, maybe your boss or your team can work together to help you get the days off that will get you the best deal. So I like to plan as far out into the future as I can because then I’m more likely to find availability on those flexible dates. And I do open a lot of tabs, like for a hotel I might search on Google and then all those different trip deal sites like Priceline and Orbitz and Kayak, and, and and.

And there’s another one that’s actually kind of new to me I like, it’s called HotelSlash. That’s a little bit slower of a search process. You don’t get the results as instantly as we’re used to, but that might still end up getting you a better deal. So I do a search for the same area and a bunch of different tabs. I personally have a little bit of a preference for one kind of family of hotels, but I’m not stuck on that. So if I find a better deal elsewhere, even if, let’s say I want to stay at a Courtyard Marriott. So those are often a good deal in the Marriott family of hotels. If there’s a really good deal in a Hilton or a Hyatt owned hotel, that’s fine. Or even a locally owned hotel, as long as it has good ratings, I always check the ratings. You don’t want to show up somewhere and find out that it’s dirty or a bad location. So being flexible on where I stay is a huge help.

The same thing goes with flights. Flights are a lot harder to change. With hotels you can usually cancel and rebook up to maybe a day or two before your trip. And I actually know someone from our FinCon community where Michelle and I met, who just wrote online on social media that he saved $30 on a hotel night about a month from now by doing that. He just searched again, found the same exact room at the same exact hotel for $30 less, canceled one reservation, and booked another. Flights, you can’t cancel as much, they’re not as flexible. But still planning as far out as you can is helpful. Often people say about two months out you’ll get the sweet spot on pricing, but with what we’re going to talk about next with miles or points, the farther out you can book, the more likely you will find something that works for you. Is that the same in your experience?

Michelle Black:

Yes, absolutely. And what you mentioned earlier, if you happen to book a flight with cash, the date flexibility can help there as well because I know a lot of airlines will allow you to look at a calendar. Southwest, for example, has a low fare calendar. So you can check a section of dates and see if it’s cheaper to fly out on a Wednesday and fly back on the following Tuesday versus the following Wednesday. Or if you have some flexibility in your travel schedule, sometimes you can save 50 or 100 bucks on your flight, just by moving your travel schedule around a little bit there with the flights.

Eric:

I was actually able to do that just recently. I’m going on a trip next week with my in-laws and the deal they made us for our family and my wife’s sister’s family is we have to get there and then they’ll cover all of our hotels and stuff once we get there. So getting there from Southern California to Montana is expensive for five flights. We have three kids, so that’s five plane tickets every time we get on a plane. And I found out, just I was doing that exact method you were talking about. I was searching on the low fare calendars on several airlines and I found that if we went one day earlier, it would be about $100 less per person and that savings is more than enough to make up for a hotel night. So we decided to get a hotel night that costs something like $150 that we hadn’t originally planned on, but we saved $500 on airfare doing that. So that $500 is dollars that I’d like to keep in my bank account. Definitely. I don’t want to give it to an airline if I don’t have to.

Michelle Black:

Absolutely. Especially when you’re traveling with a big crew like that.

Eric:

And I also like to sometimes search for my one way separate from my return. So the default for most airline websites is to search for a round trip if you’re going somewhere and coming home, most of us come home after we go somewhere, but that might not get you the best deal. Again with cash or miles and points, if you’re willing to do a little extra work and break up your travel into 2 one ways, maybe even going on two different airlines, you can find a way to save there.

So that leverages us into our next part of the conversation that I really want to pick your brain on because I know it’s something you know better than most people and that is booking travel with miles and points. And I know it could be tricky if you don’t have a great credit score. So let’s start with a couple of tips. What are the key things someone can do if they want to build an excellent credit score or a good credit score so they can qualify for those top travel rewards cards?

Michelle Black:

Well, starting with, some easy to open credit cards can actually be a great way to go. And you can do this without getting into credit card debt. You don’t have to open credit cards and charge a ton on them and then struggle with credit card debt. You can charge a little bit on your beginner credit cards and then start creating good habits of paying those credit cards off every single statement so that you don’t wind up in debt. You don’t wind up paying interest charges every month and develop those good habits. There are cards that you can qualify for when you have no credit established or even if you have maybe a little bit of negative credit history that maybe happened before you knew how to manage credit. Sometimes people wind up having a few medical collections or an apartment issue on their credit or just something from when they were younger.

Before they knew how important credit was, people can wind up starting off on a bad footing or with no credit. So in either case, you can usually start out with a secured credit card or with a student credit card or some kind of unsecured credit card for beginners and you start with something like that and build up, start establishing positive credit history. Always pay on time and create a habit of paying your credit card balance in full every month. And when you do that consistently for a while, you should start to see your credit score improve little by little over time so that better financing opportunities, better credit cards become available to you in the future. And that’s really the goal. That’s when you can start to enjoy those more attractive rewards cards that we’ll be talking about here in a moment that can open up some great opportunities for free travel for you.

Eric:

Yeah, I think the two main things that I always like to focus on for someone who’s trying to build credit or rebuild credit is to keep balances low. As you said, pay your card off in full every month. That will save you on interest and helps keep your credit score up. And two, always, always, always pay on time. If you do those two things, that makes up more than 50% of your credit score, right there. So if you focus on those two things above anything else, you’re generally going to be on the right track. It’s a slow process, but you will see your credit score rise if you can do those things.

So let’s say somebody has been on that road and they’ve seen their credit score get into that good to excellent category, maybe they’re in the 700, 720 plus club or even high five for you if you’re in the 800 plus club, what would you look for when trying to pick a credit card for travel?

Michelle Black:

Once you check your credit and you see you’re in a place to start shopping around for those premium cards, I would start looking at your spending habits. So that’s where I’d look first, your budget, where are you spending money most consistently? Do you spend a lot on groceries? Are you a family who that’s where a big chunk of your budget goes to. Do you spend a lot on dining? Do you spend a lot on travel? Are you a small business owner? Do you spend a lot? Wherever your spending is, look for a card that’s going to reward you with the most points in those areas. That way, you can earn more points to use for future travel. That’s what I like to do, what’s going to give me the most bang for my buck, essentially.

Eric:

Is there any good reason to limit yourself to just one credit card or for some people, I know everyone’s finances are different, for some people, could it make sense to have multiple cards to earn those miles and points?

Michelle Black:

Absolutely. If you can start out with one card and you feel good managing that and don’t have any problem, then absolutely. I think it’s great to add on multiple cards as long as you feel confident and trust yourself to manage that well. And by manage that well, it’s the two principles that you mentioned earlier, paying on time and then paying on time and then paying your balance off every month. If you feel confident that you can manage that well across multiple cards, then you can really maximize your rewards earning potential. And that means more points, more cash back, more miles, more free travel on purchases that you needed to make anyway. So it’s a way to, like I said, get more bang for your buck, just stretch your budget further and be able to take your family on free trips and enjoy things without having to actually come up with those funds and other ways out of your budget. It’s a way to enjoy that without having to pay for it.

Eric:

Well, I’m glad you said yes there because I know in my house we use one card mostly for gas and we have another card that we use mostly for groceries and restaurants and then we have another card we use as our everything else card where we can’t get a bonus. And between those three, it seems like we’re always building the fastest miles and points balance we can based on spending we already do. We’re not making extra purchases to get rewards because that ends up costing us more in the long run. But we already need groceries, we already need gas, so we might as well get the most we can get out of each of those purchases.

So let’s say someone has built up their big pile of miles and points and they want to book a trip. What tips do you have for someone to get the best value out of miles and points they earn from a credit card?

Michelle Black:

So I would probably defer to you on this one Eric, because you are a bit more knowledgeable about stretching those points and miles than I am. I know how to get your credit ready to qualify for the best card, but when it comes to getting the most value for your points and miles, I think you’re going to know a lot more than I do on that subject.

Eric:

Well sure. Well I’ll tell you my tips and tricks that I use. So one thing that I do is I always look to make sure when I’m redeeming that it’s going to get me at least 1 cent per point in most ways I redeem. Hotel points are usually worth less than airline points, but if you have a general miles and points card, which there’s a few families of those out there, you can sometimes transfer to travel partners or book right through that website. And I always compare to what it would cost to book in cash so I can figure out a value per point or value per mile I’m getting. And if I am doing a transfer, let’s say from my credit card to a specific airline, I search ahead of time to make sure the flight’s available with rewards and I can get one of what they often call like a super saver deal, which lets you book with half the points that you might have to using what they call a standard booking.

So, I always do a little bit of extra math and it’s not hard math, we’re not talking algebra or I guess it is a little algebra, but it’s not calculus, it’s stuff you learn probably in middle school. It’s just simple division. It’s divide the cost of the trip by the number of miles or points it would take and that’ll give you a value of your number of cents you’re getting per point. And if you do that, you’ll probably notice if you transfer to a hotel, you’re going to get a lot less value. So I only transfer to that to top up if I’m really close to a redemption to get me over that last little hurdle if I need the last couple thousand points.

But usually I’d rather pay cash for a hotel if there’s an opportunity and use my miles and points for flights because you get so much more value there most of the time. And most of us aren’t going to be flying in first class or business class regularly. But if you want to do that, if that’s something on your bucket list or your dream travel list, you can usually get more value per point. Of course, you’re going to need more points to book a first class trip than you do in economy, but if you are able to book first class compared to the cost of paying out of pocket and cash, you’re going to get a lot more sense per point booking that way. So those are my most common tips.

Michelle Black:

I think those are great.

Eric:

So do you have any other budget travel tips you’d want to offer anyone? I know you have a family, you like to get out of town once in a while. Any other fun tidbits come to mind?

Michelle Black:

I always try to plan ahead with my budget so I know how much I can afford to spend before we travel. That way I can avoid going into debt because when you get on vacation, we all have this mindset of, we’re relaxing. We want to just forget about our worries and our troubles and it is so easy to overspend. Just really forget about that we live in a real world and we are going to come home to our regular budget when we get back. So I do like to set a budget ahead of time and stick with that so that I don’t have those regrets when I get home. We can still have fun, but I try not to overspend so that I’m not spending months of regret trying to pay off credit card balances. I’ve been guilty of that in the past, my husband and I have. So we just take a different approach to it now when we travel so that we don’t make those same mistakes that we did when we were younger.

Eric:

Yeah, I know. Something I also like to look for when I’m traveling. I’m glad you mentioned that. If I’m using a card for purchases, I want to use one with no foreign transaction fee if I’m outside the US. So let’s say you’re going down to Mexico, whether you’re hanging on the beach or visiting family or whatever you’re doing, if you use a card with foreign transaction fees, you could end up spending about 3% more, which adds up over days and weeks of travel depending on how long you’re gone. And also if you’re using cash, remember that colorful money isn’t play money, it’s not monopoly money, it is real money.

So well those pesos might not feel like they’re worth as much, depending on where you’re going in your travels, it is real money and you don’t want to be in debt. You don’t want to overdraft your accounts. You want to make sure you stay within your spending plan for the trip and then you can have a nice time and know that you can afford the trip you’re on. So thank you so much Michelle for being with us and sharing your wisdom, especially around earning the best miles and points possible and building your credit. If someone wants to connect with you and learn more, where should they go?

Michelle Black:

My website is creditwriter.com and you can connect with me on Instagram as well @creditwriter.

Eric:

Awesome. Well thank you so much for spending your time with us today and have a great rest of your day.

Michelle Black:

Thanks for having me, Eric. It was fun.

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