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9 things people misunderstand about traveling on a budget

July 02, 2021
15 min read
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Many people think travel is always expensive — but regardless of how much money you save, it's possible to stretch your budget further than you think.

Budget travel may invoke images of camping, buses and hostels, but you don't have to sleep outside (or on a bus) in order to save money. Don't let misconceptions about budget travel dissuade you from hitting the road. Here's why.

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Luxury travel is possible

I once got a great deal for a night at the Loews Chicago, which allowed me to stay even when traveling on a budget. (Photo by Katie Genter/The Points Guy)

I've traveled on a budget for about 10 years now, during which time my trips have taken many different forms.

On the least expensive end, my lodging has included nights in hostels and even tents at state parks. But I've also stayed at plenty of inexpensive hotels.

For example, when I started traveling full-time as a digital nomad, I discovered that IHG Rewards' Holiday Inn Express brand and similar hotels provided the right mix of affordability and a good working environment.

But, I've also stayed at some luxury hotels using points to offset or eliminate the cash cost. And I've splurged on good value hotels through Amex's Fine Hotels and Resorts (FHR) program, including when I got $160 of food and beverages included on a $153 FHR stay at the Loews Chicago Hotel.

I've also taken my share of buses and trains -- including a trans-Mongolian train in second class -- and flown many budget airlines. But by booking inexpensive mistake fares, I've also been able to have first-class experiences. I'd never pay full price for those tickets. I've also redeemed American Airlines miles multiple times to fly one of the best business-class products available, Qatar QSuite.

All this proves that budget travel can encompass camping, hostels, hitchhiking and buses. But depending on your priorities and budget, you might not always need to choose the least expensive option. Instead, budget travel is often about deciding how to spend a set amount of money that you've set aside for your trip. Even if you don't have a set budget for a trip, you can still minimize your expenses and get good value.

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Related: How to decide whether to fly or drive when traveling on a budget

Budget travel is a choice

Some travelers may choose to travel on a budget. (Photo by fabio camandona/Getty Images)

For some people, sticking to a budget is a really important part of planning a trip. But for many people, regardless of their budget, there's simply nothing more satisfying than getting great value.

I often chose budget travel even when I don't have to. While I haven't stayed in a hostel dormitory since 2017 and I'll now pay to fly instead of taking an overnight bus, I still work to limit my expenses. For example, I usually stay at the least expensive hotels I can find in major hotel loyalty programs such as IHG Rewards, Marriott Bonvoy, Hilton Honors and World of Hyatt.

And unless I'm going to miss my flight, I'll always take public transit over an expensive taxi or Uber. I also typically opt for inexpensive local cafes (both for cost savings and for the experience).

Related: How to have a budget vacation in Italy

You can still visit luxury destinations

The bungalow I stayed in at Pension Espace Beach in Maupiti, French Polynesia. (Photo by Katie Genter/The Points Guy)

The most limiting factor to visiting some destinations on a budget is the cost of flights. Luckily, you can eventually snag a flight deal if you're patient. And if you collect airline miles or transferrable points, you can redeem points for tickets.

Of course, you'll also need to consider expenses once you arrive. But, even destinations typically known for their high prices and luxury hotels can be feasible for budget travelers.

After all, if you eat at local restaurants or shop at grocery stores, you can often save money. And if you stay at a local guest house, the owners may arrange budget-friendly activities. For example, in Maupiti, French Polynesia, I paid around $40 to go out in the owner's boat for perhaps the best excursion I've ever done: swimming with manta rays in the wild.

You can often find reasonably priced Airbnbs, independent resorts and even hostels, even in places known for ultra-luxury resorts such as French Polynesia. And even a trip to the Maldives could be feasible on a budget once you get there. You can even use inexpensive ferries to get between islands. And, if you want to add on a night or two of luxury to your trip, you might be able to do so by redeeming hotel points or getting a hotel credit card that comes with an annual free night.

Related: Financially-feasible Fiji: How to plan a trip to Fiji without breaking the bank

You can save money at upscale hotels

My husband and I used a Marriott free night award to stay at the St. Regis Osaka. (Photo by Katie Genter/The Points Guy)

Even when you're traveling on a budget, luxury hotels aren't out of the question. After all, you can book luxury hotels at budget prices in some cities.

For example, you can book the Conrad Cairo on many dates next year for as little as $77 per night. And you can book the InterContinental Bali Resort for as little as $113 in a standard room in late 2021.

You can also redeem hotel points to stay at luxury hotels. For example, World of Hyatt has several luxury Category 1 hotels, including the Park Hyatt Chennai and Hyatt Regency Belgrade, that you can book for just 5,000 points per night. You can earn World of Hyatt points by transferring Ultimate Rewards points, which are the currency earned by cards like the Chase Sapphire Preferred Card and Chase Sapphire Reserve.

Budget travelers can also unlock luxury hotel experiences using the annual free night certificates that come as a perk of select hotel credit cards. For example, you can use the 35,000-point free night awards that come as a perk of the Marriott Bonvoy Boundless Credit Card or get one free weekend night upon opening the Hilton Honors American Express Aspire Card (and each year after your account renewal).

The information for the Hilton Aspire Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Personally, I prefer limited-service hotels over luxury chains. So, I usually only stay at five-star hotels when I find an excellent deal or redeem an expiring free night certificate for a high value. But, if staying at luxury hotels is a priority for you, don't automatically assume you can't do so when traveling on a budget.

Related: High/low travel strategy: Mixing luxury and budget travel on the same trip

You don't need to fly budget airlines

You don't necessarily have to fly budget airlines, like Spirit, as a budget traveler. (Photo by Zach Griff/The Points Guy)

Budget travelers may assume they can only afford to fly budget airlines. But, especially since many full-service airlines now offer basic economy fares, you may find the best price is actually on a full-service airline. Just be sure to understand what's included in your fare and account for any extra costs you'll incur (think: baggage fees and seat selection fees).

If you plan to check a bag, it may make sense to sign up for an airline credit card before your trip. Select credit cards can get you free checked bags, such as the Delta SkyMiles® Gold American Express Card. I'm able to make up for the annual fee after checking a bag on just four Delta flights per year.

You can also use an aggregator like Google Flights to compare fares before booking. But remember to check Southwest since it won't appear in these searches. And, especially if you have flexible dates or are even flexible regarding your destination, you may be able to snag a good deal.

Related: 8 tips and tricks for finding a great travel deal

Airport lounges can save money

When departing Punta Cana, you could rest and recharge in this Priority Pass lounge. (Photo by Summer Hull/The Points Guy)

Airport lounges can provide a lot of value, especially for budget travelers. After all, airport lounges are a great place to get a snack -- or even a light meal if money is tight -- and a drink.

In fact, travelers on a budget can potentially benefit from lounges even more than the average traveler. For example, budget travelers who sleep overnight at the airport might enjoy showering in the lounge before boarding their flight. And I've used the lounge computer to print travel documents on several occasions.

Luckily, it's relatively easy to get lounge access. Some of the top travel rewards cards offer lounge access, frequently in the form of a Priority Pass Select membership. But, most of these cards have high annual fees. So, if you don't want to pay a high annual fee, you may prefer one of the following cards that offer several complimentary lounge visits each year:

The information for the Amex Green Card has been collected independently by The Points Guy. The card details on this page have not been reviewed or provided by the card issuer.

Related: The best way to share lounge access with a spouse or family member

You can get value from premium travel rewards cards

The Hilton Aspire and its Hilton Diamond status made my budget-friendly stay at the Hilton Doubletree Fiji pretty amazing. (Photo by Katie Genter/The Points Guy)

Don't assume that premium travel rewards cards aren't for budget travelers. If Hilton hotels are in your budget, for example, you may get value from adding the Hilton Honors American Express Aspire Card to your wallet. Yes, the $450 annual fee (see rates and fees) can be challenging to accept. But, once you consider the card's many perks (such as top-tier Hilton Honors Diamond status and one weekend night reward each year) you may see the value.

The Hilton Aspire also has two statement credits ($250 for eligible Hilton resort purchases and $250 for airline fees) that can provide more than the card's annual fee in value each year.

There's an argument to be made for most other premium travel rewards cards too, even for budget travelers. For example, my husband and I get a lot of value out of The Platinum Card® from American Express, especially since I'm an authorized user on his Platinum Card.

Of course, a premium travel rewards card won't make sense for every traveler. So, it's critical to consider how much value you'll get from a card before signing up.

Related: 3 ways to experience New York City, whether you’re on a budget or have money to burn

You can get travel perks without a premium card

You don't need a premium travel rewards card to get valuable travel perks. (Photo by Isabelle Raphael/The Points Guy)

Sure, premium travel rewards cards offer a ton of travel perks. But, you don't necessarily need a high annual fee card to get them.

Indeed, many modestly priced cards also offer lounge access, free checked bags, free night certificates and help toward elite status. So, you may want to see if a cobranded card with your favorite airline or hotel would provide enough perks to justify the annual fee.

The United Explorer Card, for example, only has a $95 annual fee that's waived the first year. Cardholders get two United Club one-time passes per year, a free first checked bag for the cardholder and a travel companion on the same reservation and an up to $100 Global Entry or TSA PreCheck application fee credit every four years.

Even if none of the cobranded hotel or airline cards make sense for you, you could still consider a travel rewards card like the Chase Sapphire Preferred Card. I often recommend this card to causal travelers since it offers valuable travel protections and bonus earnings on travel and dining purchases in exchange for a modest $95 annual fee. Plus, this card currently offers a sign-up bonus of 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening. This bonus was enough to take TPG credit cards writer Stella Shon on a dream trip to Costa Rica. And based on TPG's valuations, this bonus is worth $1,200.

Related: 7 travel hacks for college kids on a budget

You can fly in premium cabins

You can redeem points and miles to fly in Qatar QSuites. (Photo by Zach Griff/The Points Guy)

Many budget travelers never dream of flying in business class or first class; they'd rather spend their hard-earned points or cash on more or longer trips. But, points and miles can unlock premium cabin experiences and, in some cases, the upcharge to book a business-class award instead of an economy-class award is worth paying.

My favorite example is flying Qatar business class from the U.S. to South Africa. I could redeem 40,000 American Airlines miles plus $15.70 to fly one-way in economy on this route or 75,000 miles plus $15.70 to fly one-way in business class (including Qatar QSuite between the U.S. and Doha on most routes). Considering how great Qatar QSuite is, you might want to save up until you can redeem for business class on this route.

If you're flying internationally, booking a business-class award may also provide access to some spectacular lounges. So, be sure to consider the whole experience you could get when deciding whether to splurge.

In fact, any time you're traveling on a tight budget or looking to save money, it's important to keep the big picture in mind. By doing so, you can focus your funds on what matters most.

Related: The 6 best airline award chart sweet spots

For rates and fees of the Hilton Surpass, please click here.
For rates and fees of the Amex Green, please click here.
For rates and fees of the Hilton Aspire, please click here.

Featured image by Getty Images
Editorial disclaimer: Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

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Cons

  • Steep annual fee
  • Difficulty meeting $15,000 welcome offer for smaller businesses
  • Limited high-bonus categories outside of travel
  • The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.
  • Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases.
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1.5XEarn 1.5X points on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year
1X1X points for each dollar you spend on eligible purchases.
  • Intro Offer
    The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.

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  • Annual Fee

    $695
  • Recommended Credit
    Credit ranges are a variation of FICO© Score 8, one of many types of credit scores lenders may use when considering your credit card application.

    670-850
    Good, Excellent

Why We Chose It

It's hard to find a card that competes with the mile-long list of benefits that come with the Amex Business Platinum. While it's certainly not the card for the average consumer, a business owner with tons of expenses -- especially related to travel -- will find this card incredibly valuable. This card is similar to the consumer version that Amex offers, but with more business-oriented perks around statement credits and earning rates that are a better fit for business owners.

Pros

  • An up to $100 credit for Global Entry or TSA PreCheck application fee every four to five years
  • Up to $400 annual credit for eligible U.S. Dell purchases (enrollment required)
  • Gold status at Marriott and Hilton hotels (enrollment required)
  • Access to the Fine Hotels & Resorts program and Hotel Collection
  • Extended warranty protection
  • International Airline Program and Cruise Privileges Program

Cons

  • Steep annual fee
  • Difficulty meeting $15,000 welcome offer for smaller businesses
  • Limited high-bonus categories outside of travel
  • The Points Guy Exclusive Offer: Earn 150,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card® within the first 3 months of Card Membership.
  • Get 5X Membership Rewards® points on flights and prepaid hotels on amextravel.com, and 1X points for each dollar you spend on eligible purchases.
  • Earn 1.5X points (that’s an extra half point per dollar) on eligible purchases at US construction material & hardware suppliers, electronic goods retailers and software & cloud system providers, and shipping providers, as well as on purchases of $5,000 or more everywhere else, on up to $2 million of these purchases per calendar year.
  • Unlock over $1,000 in annual statement credits on a curation of business purchases, including select purchases made with Dell Technologies, Indeed, Adobe, and U.S. wireless service providers.
  • $200 Airline Fee Credit: Get up to $200 in statement credits per calendar year for checked baggage fees, lounge day passes, and more at one selected airline.
  • $189 CLEAR® Credit: Use your Card and get up to $189 back per year on your CLEAR® membership. CLEAR® is available at more than 50 U.S. airports and stadiums.
  • The American Express Global Lounge Collection® can provide an escape at the airport. With more than 1,400 airport lounges across 140 countries and counting, you have more lounge location options than any other credit card on the market as of 9/2021.
  • $695 Annual Fee.
  • Terms Apply.