Looking forward to a summer vacation? January is the perfect time to start exploring destination options, looking for great deals — and planning your credit card rewards strategy to fund your trip.
With the holidays over, it’s time to think about – what else? – summer vacation. It’s not too early to plan now for a trip in June, July or even August.
Here’s how to bank points, redeem rewards, create a budget and save for that big holiday in the summer months.
See related: Essential family packing guide for summer travel
Planning summer vacations in January: A 5-step guide
1. Deciding where you want to go
For those flush in dollars and/or rewards points, the travel options are many and varied. For the rest of us, there are trade-offs.
“Anywhere you automatically think of going is going to be more expensive,” said Eric Rosenberg, a personal finance blogger and travel enthusiast. “If you go off the beaten path, you may be able to find bargains there.”
In other words, be flexible.
Start planning by seeing where your points will take you, said consumer saving expert Andrea Woroch.
Check out round-trip airfares, but also look at one-way tickets, which can sometimes be cheaper, especially if you plan to move around during your vacation.
“It takes a little bit of work, but it can help,” she said.
- Rather search by destination? One perennial budget favorite is our neighbor to the south. “You can always find a deal in Mexico,” said travel expert Lesley Murphy.
- Also consider Canada, she said – and not just Banff National Park. “You can get creative with places that aren’t all over Instagram,” she said.
- If you’re trying to save money, rather than Hawaii, think Costa Rica, Murphy said. It’s cheaper and “beaches, mountains, jungles, they kind of have it all,” she said.
Another option is Puerto Rico, which is eager to lure tourists as it rebuilds from Hurricane Maria in 2017. “You can give back by spending your tourism dollars there,” she said.
Hurricane season officially begins in the Caribbean June 1, but Frommers and other travel and weather sites say June and July are often safe, if wet, times to visit the island.
- If you’ve got your heart set on Europe, rather than high-priced Rome or London, consider heading east to Croatia or Montenegro, said travel blogger Brian Cassmassi.
- Thinking about Spain? There’s often better deals to be had next door in Portugal, he said.
When it comes to picking destinations, “my general thing is, how much do I feel comfortable targeting?” he said. “It’s about setting that initial benchmark, then playing around with the numbers. Can I make it fit? If not, maybe I need a cheaper vacation.”
2. Earning rewards points
Six months in advance is a good time for those with solid credit to shop for a new credit card with a robust rewards program.
“Some of the best rewards opportunities that also give you a lot of flexibility, come from the big-bank brands,” Rosenberg said.
For the easiest point redemption options, look into cards from Capital One and Barclays, he said.
Those who are willing to do more work when redeeming, for a somewhat better deal, might prefer a card from Chase – such as Chase Sapphire Reserve or Chase Sapphire Preferred Card – or American Express – including The Platinum Card® from American Express or the American Express® Gold Card – he said. (For more on redemption, see no. 4 below).
There are also cards that give you points on a specific airline or hotel. These aren’t Cassmassi’s favorite because they limit your options, but “if there’s a brand someone’s really happy with, it might be worth it,” he said.
One of the lures of all these cards are the sign-up bonuses. Current offers include:
- Capital One Venture Rewards Credit Card: 50,000 bonus miles after spending $3,000 in the first three months.
- Barclaycard Arrival Plus World Elite Mastercard: 70,000-mile bonus after spending $5,000 in the first three months.
- The Platinum Card from American Express: 60,000 bonus points if you spend $5,000 in the first three months.
- Ink Business Preferred Credit Card: 100,000 points if you spend $15,000 in the first three months.
These bonuses can get you a long way toward your goals – if you can afford them.
The Amex Platinum card, for example, comes with a $550 annual fee. And then, of course, you have to pay back that $5,000 in card charges.
“It’s easy to be tempted to spend a lot more to get those miles and points,” Rosenberg said. “But remember, you may not be best served by this if you’re going to have to pay interest.”
3. Booking your trip
There are two schools of thought on this.
“Say you want to go to Paris in July,” said travel blogger Jen Ruiz. That’s the most popular time of year to head to the City of Lights – the most sold-out flights and hotels, the highest prices possible on everything. But it’s when you can go, and Paris is your dream destination.
- You can start planning and booking months ahead of time, Ruiz said. “That’s when you’re going to find those good deals. It’s not going to get any cheaper as it gets closer.”
- She follows that advice herself. Many people, for instance, start booking new year’s flights in the late fall or early winter, she said.
- However, Ruiz booked her trip in June. “I knew it was going to get ridiculous,” she said.
- Ruiz saw a one-way ticket to Hong Kong for $300 “and I booked it the minute I found it.”
Rosenberg agrees. “Earlier’s better across the board,” he said.
But if you still need to rack up points, all is not lost. Cassmassi likes to look for deals about two months ahead of time. “That’s when the prices seem to be the best,” he said.
4. Redeeming your points
Every card works a bit differently. Barclays and Capital One travel rewards cards, for example, allow you to charge travel expenses to your card and then redeem them with points – including the points you earned purchasing the flight or car rental or other travel expense in the first place.
Capital One Venture cards now also offer users the opportunity to transfer points to more than a dozen airlines at favorable rates with its transfer partners.
Using points from Chase and American Express can get a bit more involved.
- Rosenberg might begin, he said, on a travel site like Orbitz or Google Flights, to see what the ticket would cost him with cash.
- Then he’d head over to the Chase or the Amex portal, to see what kind of a deal he could get on a flight using points that way.
- But since those cards also allow him to transfer his points to a slew of airline partners, he would next hop over to the site of an airline where he has a frequent flyer account, to see what they’re offering.
“It’s complicated,” he said of the process, “but the payoff can be great.”
5. Budgeting for your trip – beyond hotels and flights
You’ve done it – racked up enough rewards, and planned far enough in advance, to have booked your flights, your hotel rooms and maybe even your rental car all using points.
So, are you going on a free trip? Uh, no.
“From food to entertainment to souvenirs, there are many more travel expenses you need to add to your budget and if you don’t think about these in advance, you will not be able to plan appropriately,” Woroch said. “This is when people tend to get in trouble and end up racking up debt that becomes hard to pay off after the trip.”
See related: 9 travel rewards tips for cash back cardholders
- Try to come up with a realistic budget for the rest of your travel costs.
- Then start putting money aside, a certain amount from each paycheck.
Need some help staying focused? “Print a picture of your destination to keep somewhere you can see it,” Woroch said, “to help you stay motivated!”