One of my biggest financial challenges when I was in debt in my twenties was how to pay for travel.
My thought process could be summed up as “do fun things now, worry about it later.”
I did have some great trips, like going to Madrid and Rome with my brothers. I certainly don’t regret taking those trips.
In hindsight, I would just pay for things a bit differently.
Instead of recklessly paying for the trips with credit cards, I would have learned how to responsibly use credit card reward points.
That’s what I do today, even though I’m in a much stronger financial position than I was 10-15 years ago.
For some context, my family of five has settled into a predictable travel pattern for the past five years or so.
We aim to take annual trips to Florida (escape the Chicago winter), Colorado (all the fun things) and California (visit my sister).
Planning these trips well in advance gives me the advantage of strategizing how to pay for them, especially the expensive flights.
The thing is: I can’t remember the last time I paid for any of these flights with cash.
Instead, I use my Chase Sapphire Reserve points.
Why I’m happy I learned how to responsibly use my Sapphire Reserve points.
Redeeming credit card points for travel has been a major factor in allowing me to stay on budget and continue fueling my investments.
Have you heard?
It’s expensive to take a family on vacation.
But, I’m of the mindset that it’s also extremely important and a whole lot of fun.
So, instead of skipping out on travel, I use my credit card points to offset the cost.
Airplane tickets these days can be around $500 per person. By using my credit card points, I easily save $10,000 per year on flights.
Over the past five years, that totals $50,000. That’s enough money to fully fund my son’s future college tuition in his 529 savings plan.
To get all these points, you may be thinking that I must have 10 credit cards and constantly stress about which one to use for every purchase.
Nope.
I have just two credit cards.
Here’s how I do it.
Never spend money on your credit cards just to earn more points.
With all credit cards, the more you spend, the more you earn. That’s true whether you are accumulating points or utilizing shopping or travel credits and other discounts.
Before we go any further, please remember the first rule of responsible credit card usage:
Don’t spend money just to earn rewards. That’s a recipe for financial disaster.
Using the Sapphire Reserve to get free flights is no exception to this rule.
To read more about the responsible use of credit cards, check out my series on credit here.
A good place to start is my post on 10 credit card tips for lawyers and professionals.
If you’re currently working hard to pay off credit card debt, you can also check out my top 10 tips for paying off debt on a budget.
If you don’t already have it, now is a great time to consider the Sapphire Reserve.
Chase is currently offering a sign-up bonus of 125,000 points for the Sapphire Reserve, the largest bonus ever offered.
That translates to $2,562.50 in value, according to The Points Guy.
I recently wrote about why I’m keeping the Sapphire Reserve in my wallet, even with the higher annual fee:
The bottom line is that I will still earn a ton of points each year, not to mention the other benefits, that the Sapphire Reserve will remain the primary card in my wallet.
Check out my post to learn how I evaluate credit cards and how I came to the no-doubt conclusion that the Sapphire Reserve is still worth it for me.
Is there value in keeping both your Sapphire Reserve accounts open?
After I wrote that post, a number of readers (with spouses, partners, kids, etc.) reached out asking if there is value in keeping separate Sapphire Reserve accounts.
It was such a good question that I wrote a full post addressing it:
The short answer is that my wife and I each had Sapphire Reserve cards before we got married. We eventually closed one of the accounts and kept the other one open.
Today, we still each have a physical Sapphire Reserve card through the “authorized user” option on just the one account.
Keeping just one account between the two of us saves a bit of money, but more importantly, keeps things much easier for us.
As I mentioned, I value simplicity right now.
I recommend most couples with two accounts do the same.
Nonetheless, there may be valid reasons why you would want to keep both accounts open.
For my complete thoughts, and the reasons why you might want to keep both Sapphire Reserve accounts open, check out my post here.
I have two credit cards in my wallet: the Sapphire Reserve and the Freedom Unlimited.
At this stage in my financial life, I value simplicity as much as anything else.
That’s why I only use two credit cards.
I use the Sapphire Reserve for travel (4 points per dollar spent on airlines and hotels) and dining (3 points per dollar).
Then, I use the Freedom Unlimited for everything else.
The Freedom Unlimited earns 1.5 points across the board for every purchase. In contrast, the Sapphire Reserve only earns 1 point per dollar spent in non-bonus categories.
Same as me, my wife only carries the Sapphire Reserve and Freedom Unlimited. That means we can combine points to maximize our rewards.
Together, we have a simple approach and still earn plenty of points.
Now, let’s talk about whey the Sapphire Reserve and the Freedom Unlimited are the perfect combination for your wallet.
Why it’s a great strategy to have the Freedom Unlimited and the Sapphire Reserve.
If you have the Sapphire Reserve, the Freedom Unlimited is the natural companion for your wallet. These two cards work extremely well together to maximize travel rewards.
Here’s why.
As mentioned above, the Freedom Unlimited earns 1.5 points across the board for every purchase. For that reason, this is my default card for just about all spending other than travel and dining.
But, there’s a catch.
If you only have the Freedom Unlimited, the points you earn must be redeemed as cash back or through the Chase travel/shopping portals.
As a rule of thumb, cash back rewards like this are not as valuable as transferring your points to a travel partner.
Let’s emphasize that point for a moment: the best use of your credit cards points is almost always to transfer those points to a travel partner.
This is true for Chase, American Express and any other credit card that offers point transfers.
But, we just said that you cannot transfer your Freedom Unlimited points to travel partners.
That’s where the Sapphire Reserve comes in.
You can combine your Freedom Unlimited points with your Sapphire Reserve points.
If you have the Freedom Unlimited and the Sapphire Reserve, you can combine your points.
This is the key to the whole strategy.
With the Sapphire Reserve, you earn Ultimate Rewards points. You can transfer Ultimate Rewards points to certain travel partners, like United. Each point translates into one United mile.
Then, you can use those United miles to book airfare directly through United’s website.
This is my preferred method for getting maximum value out of my credit card points.
To recap the strategy:
- Use your Freedom Unlimited for all spending other than travel and dining.
- Combine your Freedom Unlimited points with your Sapphire Reserve Ultimate Reward points.
- Transfer your Sapphire Reserve points to a travel partner of your choosing, like United.
And, that’s all there is to it.
One final note: Make sure to send your Freedom Unlimited points to your Sapphire Reserve account, and not the other way around.
As soon as I have enough Sapphire Reserve points, I transfer them to United and book a flight.
I’ve found that the best use of my points is to transfer them to United for free flights. There are other options for travel partners, but with flights being so expensive, this is the best use for me.
To take it a step further, my personal strategy is to purchase flights as soon as I have enough points.
That’s because points tend to be worth less as time goes on.
For example, a roundtrip ticket that costs you 30,000 points today might cost you 35,000 points the next time you look. You can think of it the same way you think of inflation reducing the purchasing power of your cash.
Just last week I transferred my Sapphire Reserve points to my United account to purchase flights to visit my sister in California.
Once I build up my point balance again, I’ll look to book another flight.
My brother-in-law is getting married in Arizona next year. I’ll probably book those flights next.
Do you use your Sapphire Reserve points for free flights?
Now you know exactly how I use my Sapphire Reserve, combined with my Freedom Unlimited, to get free flights.
With just these two credit cards, I’ve been able to pay for all of my family’s flights for the past five years.
It takes a little bit of effort to maximize your credit card rewards, but the payoff can be well worth it.
With the money I save on travel every year, I have a better chance of staying on budget and hitting my investment goals.
That’s a win-win situation.
Do you have the Sapphire Reserve? What about the Freedom Unlimited?
How do you use your points?
What are your favorite redemption options?
Let us know in the comments below.
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