Guide to Booking Luxury Vacations with Points

Speaker 1 – 00:00
Welcome to EWA’s FinLit podcast. EWA is a fee only RIA based out of Pittsburgh, Pennsylvania. We hope all listeners
of this podcast will benefit as we deep dive into complex financial topics that we will make simplified for you. And
we hope that this really serves as a catalyst so that you can make the best financial planning decisions for your
family and also save time foreign. Welcome everyone to this week’s episode on Finland by Way. We’re talking about
how to book some vacation using credit card points. So this is something we’ve helped a lot of clients with. You
know, a lot of clients that can afford to book travel. It’s, it’s, we talked about this many times that the best savers are
the worst vendors. So it’s almost hard to give yourself permission to go.
Speaker 1 – 00:51
Even though like travel or vacations are really important, it’s hard to give yourself permission to spend a lot to make
that like an epic trip. So we found like if you’re able to do a lot of it for free, typically, you know, clients will take that
vacation and do it the right way even before retirement. And I think like many the concept of mini retirement,
especially with health improvements and is more important than ever versus like go 100 miles an hour to suddenly
zero. Studies have shown like you’re dead in two years. You know, typically if you do that so but encourage travel as
much as you can. Take many, you know, many sabbaticals, many retirements, et cetera. But Chris, what are you
going to say?
Speaker 2 – 01:27
I was going to say I think as wealthy as you are, I find a lot of people like love this because like everyone likes a deal
and like a win on it. So like you could have, you could be you know, very wealthy but if you’re getting a win on
American Airlines or something, you’re like yeah, I’ll do that. Even though you could pay for the ticket just fine.
Speaker 3 – 01:48
It I was reading about how much money the airline’s biggest revenue is from selling these points to the credit card
companies.
Speaker 1 – 01:57
Interesting.
Speaker 3 – 01:58
Biggest revenue stream. They sell these points in bulk. Yeah, it’s a big thing. I was reading last night. So when I read
when I’m laying in bed.
Speaker 2 – 02:04
Well yeah, if you look at the deal like if you buy the points out right. Like there’s always these advertisements like you
can crazy. It’s like the worst deal if you buy the points. So I’m sure a lot of people get caught with that.
Speaker 1 – 02:15
But all right, so high level what we recommend to do is for someone that has, you know, typically recommend have
one or two credit cards you use. We recommend reverse budgeting, set up two checking accounts, you know, one for
fixed, one for variable expenses and then just keep yourself disciplined. The fixed account, you know, covers your
mortgage, it covers your savings, like 529 plans, Roth IRAs, all that kind of stuff. And then the variable. So you know,
we recommend to have you know, Chase Sapphire Reserve. It’s one of our favorite Chase Sapphire Preferred’s great
for just like your day to day. Chris has. I have it too Chase Sapphire reserve card. But anyways doesn’t have it. Didn’t
you downgrade? I did, yeah, Yes, I said preferred, right?
Speaker 2 – 02:53
You said reserve and preferred.
Speaker 1 – 02:56
Maybe I’m. Yeah, it’s not what I say, it’s what I mean. But anyway so. But then the concept of this is we recommend
to if you have a big expense coming up where you can earn a ton of points is if you earn the sign on bonuses and a
couple, you know, things people don’t know is when you open and close credit cards, it really does, it has no effect on
your credit score long term. It does in the short term but if you’re not buying a house or car in the next six months,
it’s really not going to matter. So you can get some of these sign on bonuses and you can literally, you know, save.
I’ve saved upwards of, you know, 30, 40, like 50 grand on some vacations.
Speaker 1 – 03:32
I never would have paid, you know, that much money on any vacation but that’s what it would have cost for me to fly
first class, stay in like nice hotels, all free using points. And I’ve done that by getting bonuses from different credit
cards and kind of knowing the game. So Jameson, I know you booked a somewhere in Mexico with your fiance.
Speaker 2 – 03:52
Yeah.
Speaker 1 – 03:52
Last year. So walk us through that real quick. And then Jameson’s doing a big Italy trip probably to the extent of like
a thirty thousand dollar trip. Probably he’ll do it for like under two thousand.
Speaker 2 – 04:02
So yeah, the trip we did, it was in Cancun and I mapped out what it would have cost out of pocket and it would have
been like $12,000. But we paid maybe $50 for the. Because so what we did is Juliana had through Southwest called
the Companion pass. You can buy one ticket and fly for free or somebody else can fly for free with you. But we
bought that ticket with points with Southwest and that’s free.
Speaker 1 – 04:32
Yeah. And you, they charge you like $5.
Speaker 2 – 04:34
Yeah, that was part of the out of pocket, 50 bucks, $5.60, I think, was the. But where we really made out was with the
Hyatt points. So I opened the Chase Inc. Card and I had a bunch of points from the Sapphire preferred or the
Reserve. That’s just my day to day spend. And you can go on the high at the points calendar to see, like, they have
usually the points, like, per night. So you can see, like, what range of, like, during time of year, like, how much does it
cost for you? And the room that we got, I think it was 50,000 points per night. But if you would have booked out of
pocket, it was like 1600 a night.
Speaker 2 – 05:14
So, like, just by going through the steps of seeing, like, where can we get the most redemption value for the points,
like, you could spend that. I think the total cost was like, maybe 300,000 points, but you could redeem those for
$2,000 or you could redeem it for $12,000, depending on how you use the points.
Speaker 1 – 05:35
Absolutely.
Speaker 2 – 05:35
So it took a little bit of leg work, but it was definitely well worth it in the long run.
Speaker 1 – 05:39
So that’s awesome. So $12,000 trip for free. It’s all inclusive. Didn’t have a worry in the world. Got there for free,
stayed there for free. Eight for free.
Speaker 2 – 05:47
It was awesome. Yeah, were. It was a newer, like, all inclusive. And there were a lot of, like, older people there kind of,
and were probably like the youngest there. And people were kind of looking at us like they’re. What are you guys
doing here? Yeah, they assumed were on a honeymoon or something and just a casual vacation. And you could just
see the look in their eyes. Like they went from being curious to being kind of pissed off because were like, yeah, we
didn’t. We didn’t pay a dime for this. This was all free. And they were like, you know, out of pocket, thousands of
dollars. And it was kind of nice to be able to have those conversations, but.
Speaker 1 – 06:22
So it’s funny. Did you get anyone’s card? Say, I can. If you let us handle your financial plan, we can show you how to
do this.
Speaker 2 – 06:30
No, I think I forgot.
Speaker 1 – 06:32
Sorry.
Speaker 3 – 06:33
We’re making a pivot into the travel agent business.
Speaker 2 – 06:36
Yep.
Speaker 1 – 06:37
All right, Jameson, so you’re. You’re doing Italy this year, right?
Speaker 3 – 06:42
September. Yeah. So basically. So I pay my taxes on cards.
Speaker 1 – 06:50
And talk about that. Does that cost anything?
Speaker 3 – 06:52
It’s 1.75%.
Speaker 1 – 06:54
Okay.
Speaker 3 – 06:55
Fee.
Speaker 1 – 06:55
So if you throw 30, 000 on there, it’s like 500 bucks. Some. I don’t know. Yeah.
Speaker 3 – 07:03
Yeah. A couple Hundred bucks. So British airways card spend 30,000. Well, if you open it and spend 5,000, I believe
you get 75,000 AVOs, which is their version of points. Then if you spend 30,000 every year, you get a Companion
pass. So I had done that last year, not used it. So I had like, I had the companion pass and I had like, I don’t know,
120,000 AVs maybe. And then actually just yesterday I made a tax payment on, I got an. I realized I was a little bit
short on the AVS. I need like 200,000 to book the flight. So I got a capital one venture x 95, 95 annual fee. Spend four
grand on it, you get 100. I think it was, the deal was 190 or 100,000 points which transfers directly to British Airways.
Speaker 3 – 07:56
So use the Capital One points transfer get, book the British Airways business class flight for free with the points
from Pittsburgh to London to Florence. Companion pass, someone travels with me, you pay the fees, which are like, I
don’t know, 500 bucks or something. Yeah, 700 bucks.
Speaker 1 – 08:16
But otherwise these flights cost like 20.
Speaker 3 – 08:19
I think they were like six or seven grand each. So it would have been each way. 15 grand. Yeah, yeah. And then from
there I have, I got, I opened, did what you real.
Speaker 1 – 08:29
Quick because these are business flight business that literally they go into beds, they fold into beds, which is, you
know, you’re traveling overseas that far, 6, 7, 8, 10 hour, whatever, it’s a game changer.
Speaker 3 – 08:40
Yeah, I’ve never done it. This is my first time.
Speaker 1 – 08:42
Yeah.
Speaker 3 – 08:44
And then I did what Chris did. I got, I got the Chase business. I’ve done all of the Chase business cards, but recently
got one to get some Chase points. So we have like between the both of us have like a couple hundred, maybe two or
300,000 chase points. So use Southwest or the British Airways to get over there. And then we’re just gonna book
Hyatt hotels the whole way. And so with Hyatt you can get, you know, between like 20 and 30, 000 points a night.
Transfers direct from Chase to Hyatt. That can be like a thousand dollar room.
Speaker 1 – 09:14
So you can book a Park hyatt for like 35,000 plus points.
Speaker 3 – 09:17
So it’s like 300, 000 points. That’s like 10 nights. That would cost you what, like 10 grand? Easily, yeah, easily 10
grand.
Speaker 1 – 09:24
Yeah. So you’re gonna book a probably 25.
Speaker 3 – 09:26
30 thousand dollar pro.
Speaker 1 – 09:28
So let’s say for the British airway fees. The taxes you paid 2000. Let’s say you spend 2000 over there on food and
going out. So under 5000 for probably a 35000 vacation. Yeah, my bad.
Speaker 3 – 09:42
The first trip to Europe.
Speaker 1 – 09:43
So and you’re in your 20s. That’s crazy. Yeah, nuts. But yeah, that’ll be a lot of fun. So yeah bot I mean bottom line is
in the context of a financial plan if you have high income, high cash flow, you know a lot of like even if you’re a W2
physician, I mean a lot of time your bonuses get under withheld. So instead of like we can put help you put taxes on
a credit card to book these flights, we can do you know, big expenses. If you have a big project like redo in your
backyard or something. Lot of times contractors will let you put money on the project on a credit card. A lot of times
they’ll charge you a fee of you know, 2 or 3% because credit cards do take their cut.
Speaker 1 – 10:20
So we recommend only do only pay extra on the credit card if you’re earning a bonus. Other than that just stay
disciplined and do the day to day and just do one or two have one credit card that you’re doing day to day and then
open up one or two a year to knock out your big vacations for free. But you know I looking back there was one year I
opened up like 20 credit cards and it was. I spent like an hour every Sunday morning doing it. But it was a lot. I mean
I had it. I would say I was like in the top 1% of like nerdy, analytical. Talking to my buddy who like started a business
just doing this called 10x travel, you know dot com.
Speaker 1 – 10:54
He’s like the mastermind behind all this and taught me how to do it all. But like it can become like an obsession for
sure. And that I think that got to the point where it was like awesome because I had accumulated like a couple
million points in one year and really hadn’t didn’t have to come out of pocket for it because at that point you could
even like you could use gift card. You could buy money gift cards and then unload the money gift cards on a credit
so you didn’t have to spend your own money. It was like those goal that was the golden age we call it of doing credit
card hacking that’s over. So now you have to do it through typical you know, day to day spend.
Speaker 1 – 11:31
So our biggest ways hit the bonus of big purchases, hit the bonuses with tax payments. There are websites you can
pay your mortgage, you can pay car payments. Plastic with a Q that’s going to charge you know that 2 or 3% fee
though. So there’s ways to do that. But if you’re earning these big trips it’s worth it. But if Jameson, if you were just
spending $2,000 worth of fees for taxes and British and you were just doing normal earning that wouldn’t have been
worth it. But if you’re going towards the bonuses and saving these and typically we find points go the most
international, first class or business class travel, that’s the biggest bang for the buck. Typically it’s like a hundred
thousand points equal a thousand dollars worth of redemption.
Speaker 1 – 12:13
But I’ve used a hundred thousand points to save $10,000 worth of but that’s on first class international flights or
certain hotel brands. So like Hilton not a good way to spend points. Something like the 150000 points for a nice
hotel. Whereas like a Hyatt you can get it for like 30 000. Yeah so you have to know the game a little bit as well. So in
general I’d say Chase, Sapphire, British Airways is good if you want to do international trip but there’s not a lot of
juice if all you’re doing is traveling domestically. Say Southwest companion passes good route to go but a lot of
people don’t.
Speaker 3 – 12:46
Like Southwest and like the Chase points for like a flight is like not good, usually not a good deal. Yeah even like
transferring Chase to Southwest.
Speaker 2 – 12:55
Is like not good.
Speaker 1 – 12:57
Yeah. If you’re just doing domestic travel probably and you’re high income earner probably not worth the time that to
go overly into this. But if you like want to do a big international trip once a year, yeah you can knock out 20 to
$30,000 savings.
Speaker 3 – 13:08
What goes to what points go to Delta? Because Delta points I think generally are fairly decent. Is there any points to
go to Delta’s?
Speaker 1 – 13:17
Okay, yeah, Delta is a great airline but because they’re a great airline it’s, they’re a little bit more stingy with how their
points work. It takes like some of the like for example I went to Italy and like the, I wanted to come home. It was like
a hundred thousand points for a business flight I think. But like you flew Delta no that was British Airways but Delta
I’ve seen it like 600000 points to go first class international. So they’re just like a premium brand and British Airways
is Nice. Wi Fi was a little spotty on the way home, but yeah, you wouldn’t have that Delta, but so American Express go
to Delta. Delta has its own cards as well. I think they’re a membership of some of the alliance programs as well. That
gets a little bit more complicated.
Speaker 1 – 14:04
But you can, there’s, there are resources through like 10x travel you can go to help book flights. There’s other
resources online to find as well.
Speaker 2 – 14:12
Worst thing you can do, if you open up the Chase app, like the first thing will come up, it’ll say like that Chase, pay
yourself back. Oh, you have like a hundred thousand dollar points and it’ll say you have a thousand bucks. Yeah. So.
Or you could use that hundred thousand.
Speaker 1 – 14:24
Get a lot to save 12,000 like you did or save 25,000 like you did. Yeah, absolutely. So yeah, Eddie, we do this kind of
service only for existing clients. So if you’re an existing client, you’re looking at booking a big travel and haven’t told
us because you’re afraid to say, hey, I want to spend this much money on it, we’ll help you do it. Gener generally for a
much lower cost or if you’re a new person interested in this and want to overall financial plan, we’re happy to chat
and help you out. So thanks for joining. We’ll catch you next week. Thanks for tuning in to our podcast. Hopefully you
found this helpful. Really hope this is as beneficial and impactful to as many people across the nation as possible.
Speaker 1 – 15:01
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