If You Absolutely Have to Finance a Family Trip, This Card May Be Right for You
This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. Terms apply to the offers listed on this page. For an explanation of our Advertising Policy, visit this page.
Update: Some offers mentioned below are no longer available. View the current offers here.
This page includes information about the Discover it Miles that is not currently available on The Points Guy and may be out of date
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.
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.
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
Welcome to The Points Guy!
WELCOME OFFER: 80,000 Points
TPG'S BONUS VALUATION*: $1,650
CARD HIGHLIGHTS: 2X points on all travel and dining, points transferrable to over a dozen travel partners
*Bonus value is an estimated value calculated by TPG and not the card issuer. View our latest valuations here.
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.