My family took a month long vacation the summer after I achieved financial independence and was no longer working in my corporate job. I did not have to worry about responding to emails, waking up early for conference calls, or staying up late while everyone else slept to work on different assignments. It was awesome and I highly recommend experiencing a vacation without the overhang of needing to be plugged in at work. For those of us with a corporate job it can be difficult to achieve unless you do it in between jobs or after achieving financial independence.
The Problem for This Year’s Summer Vacation
Last summer we were able to keep the costs down by using the airline and hotel points I racked up while traveling for work. This summer we will almost be out of those points and going on a nice summer vacation will get a lot more expensive. We don’t have a lot of extra income coming in right now so spending thousands of dollars on a vacation would be challenging and inconsistent with our philosophy of living within our means in order to maintain our financial independence.
My wife and I have credit cards that earn us points but we’ve never looked into optimizing our points and we definitely don’t credit card churn because we feel we can use our time on other more productive activities. However, with more free time this year I recently did a little research to see how much I could optimize our credit cards to help support the costs of a summer vacation.
How I Earned $2,000 in One Hour to Pay for Our Summer Vacation
I spent about 30 minutes researching credit card options on a few personal finance websites and my wife and I decided to take advantage of the Chase Sapphire Preferred card offer which offers 60,000 bonus points, 2x points on travel and dining, and 1 point on all other purchases. The card also gives 25% more value when you use your points to book travel through the Chase Rewards system.
We spent another 30 minutes taking a few steps to earn the maximum number of points that we could earn between now and our next summer vacation:
- I changed my old Chase Sapphire card to a Chase Freedom card so I could earn 5% cash back on select purchases. My wife and I will use this card to make purchases that fall within the 5% categories (the categories change every quarter so you need to be aware of those changes).
- I opened a Chase Sapphire Preferred credit card and will earn 60,000 bonus points.
- I referred the Chase Sapphire Preferred card to my wife and earned 15,000 bonus points after she opened up a card of her own.
- My wife opened a Chase Sapphire Preferred credit card and will also earn 60,000 bonus points.
- We expect to earn about 65,000 points using these cards for typical purchases between now (November 2019) and when we go on vacation (late summer 2020).
By taking these few steps, we will have a cash value of approximately $2,400 to use towards our vacation. There’s a $95 annual fee for the Chase Sapphire Preferred cards so our net benefit will be a little above $2,200.00 that we can spend on our vacation. See the breakdown below:
Sign-On Bonus Points
Points Earned Through Purchases
Points Value Using Chase Travel Option
Dollar Value of Points
My wife and I have good credit scores and I don’t expect these steps to have any meaningful impact on our credit. We will not make any purchases besides what we would normally purchase on our credit cards. We did not spend more than an hour researching and taking the steps necessary to maximize the value we get from our credit cards. We will continue to pay our credit card balances in full at the end of every month so we will not have to worry about the high interest rates on these credit cards (17% – 24%). We will evaluate whether to keep these cards open before the end of next year.
I’ll be writing a follow-up post sometime in 2020 on how much our summer vacation actually cost us after using our points.
My Recommendation to You
If you are already savvy with your credit cards then this post is not for you. However, if you have never really paid much attention to your credit cards I’d recommend doing an hour of research and coming up with a few steps to take advantage of existing credit card offers and maximize:
- Sign-On Bonus Points;
- Referral Bonus Points; and
- Bonus Points for purchases.
It might just pay for you next vacation or large purchase. Each bank has limitations and certain restrictions that apply that may impact the offer you decide to accept. However, there are a lot of cards with good sign-on offers to choose from so you should be able to benefit after doing a little bit of research.