If You Absolutely Have to Finance a Family Trip, This Card May Be Right for You

Oct 15, 2018

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The average household spent $2,076 on vacations in 2017, according to the Bureau of Labor Statistics’ Consumer Expenditure Survey. No doubt you can squeeze in a quality trip for a family of four at that price, but it won’t be easy or realistic to come in at or below that number in some cases.

Airfare for four to a place like Hawaii, for example, can cost $1,300 or more round-trip — and that’s only when a pretty extraordinary offer comes along. Even if you have more modest destinations in mind, or you’re willing to make it a road trip, the cost of traveling adds up fast, especially if you don’t have many points and miles saved up to help defer the cost. The typical household spends more than $500, for example, on hotels for out-of-town travel each year. And, if you’re traveling to a place like Walt Disney World, entry to just one park costs $100 or more a day per person. Talk about a budget-buster.

All of this to say family vacations can be expensive, and while we at TPG preach against never carrying a balance on a credit card, when you’re planning your ideal family trip, you may be forced to decide between breaking a rule points-and-miles collectors hold dear, and not taking the vacation you want. What absolutely doesn’t make sense is to rack up thousands of miles to pay for your vacay, only to have those rewards get swallowed by finance charges of 16% or more per year.

There is a way you can build your dream vacation and actually take it, too — if you can stick to a repayment plan that will cost you no interest and allow you to enjoy the full benefits of the rewards you earn. Ideally you have the money in hand before you book a trip, but sometime life gives you small windows to act, and you make the finances work or miss your window. You can’t easily employ this strategy of charge now and pay-back later with the best travel rewards credit cards, because most don’t offer a 0% introductory offer, and the ones that do offer a relatively short intro window.

If your window to travel doesn’t align with your budget, look to a card with a 0% intro APR. (photo by Flytographer)

Enter Discover it Miles which earns 1.5 miles per dollar and matches all of your earnings at the end of your first year of card ownership, making this a card that essentially earns a 3% return (once miles earned the first year are matched). A free payoff plan, rewards and no annual fee? Sign us up.

As for redemption on the Miles card, each mile is worth 1 cent as a statement credit toward qualifying travel expenses or good for cash as an electronic deposit to your bank account. Eligible travel purchases must have been recorded on your statement within the last 180 days and include airline tickets, hotel rooms, car rentals, travel agents, online travel sites, commuter transportation and much more.

Courtesy of Getty Images.
Sometimes, the time to make memories is now. (Image courtesy of Getty Images)

You’ll have to make sure you have a plan in place to pay off that vacation bill (and not add any additional debt) during the intro period in order to avoid finance charges. But it can be done with a little budgeting and some back-of-the-envelope math. Say you put $5,000 on your card to pay for your family’s trip. You’ll need to pay $357 a month to ensure you have that bill paid in full by the end of the 14-month 0% introductory period.

Now compare that with the interest you’d accrue without an intro offer. At 16% APR, you’d pay more than $500 in interest over the course of 14 months on that same charge, if that’s how long it took you to repay your debt. That’s a down payment on your next vacation — and $350 more than the rewards you earned for booking your vacation on a card that will ultimately give you 3% in rewards once all of your miles at matched at the end of the first year.

In most situations we aren’t supporters of creating debt to take a vacation, but sometimes life doesn’t always operate in a sequential order.

Featured image by Ippei Naoi / Getty Images

Delta SkyMiles® Platinum American Express Card

Earn 50,000 bonus miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new card in the first three months of card membership. Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants in the first three months of card membership.

With Status Boost™, earn 10,000 Medallion Qualification Miles (MQMs) after you spend $25,000 in purchases on your Card in a calendar year, up to two times per year getting you closer to Medallion Status. Earn 3X Miles on Delta purchases and purchases made directly with hotels, 2X Miles at restaurants and at U.S. supermarkets and earn 1X Mile on all other eligible purchases. Terms Apply.

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More Things to Know
  • Earn 50,000 Bonus Miles and 5,000 Medallion® Qualification Miles (MQMs) after you spend $2,000 in purchases on your new Card in your first 3 months.
  • Plus, earn up to $100 back in statement credits for eligible purchases at U.S. restaurants with your card within the first 3 months of membership.
  • Earn up to 20,000 Medallion® Qualification Miles (MQMs) with Status Boost® per year. After you spend $25,000 in purchases on your Card in a calendar year, you can earn 10,000 MQMs two times per year, getting you closer to Medallion® Status. MQMs are used to determine Medallion® Status and are different than miles you earn toward flights.
  • Earn 3X Miles on Delta purchases and purchases made directly with hotels.
  • Earn 2X Miles at restaurants worldwide, including takeout and delivery and at U.S. supermarkets.
  • Earn 1X Miles on all other eligible purchases.
  • Receive a Domestic Main Cabin round-trip companion certificate each year upon renewal of your Card. *Payment of the government imposed taxes and fees of no more than $75 for roundtrip domestic flights (for itineraries with up to four flight segments) is required. Baggage charges and other restrictions apply. See terms and conditions for details.
  • Enjoy your first checked bag free on Delta flights.
  • Fee Credit for Global Entry or TSA Pre✓®.
  • Enjoy an exclusive rate of $39 per person per visit to enter the Delta Sky Club® for you and up to two guests when traveling on a Delta flight.
  • No Foreign Transaction Fees.
  • $250 Annual Fee.
  • Terms Apply.
  • See Rates & Fees
Regular APR
15.74%-24.74% Variable
Annual Fee
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Terms and restrictions apply. See rates & fees.

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