How to Travel Alone: credit cards and reward points
I earn a good percentage of my Solo Traveler income in US$. But I’m a Canadian and I lose a lot of money converting those dollars into a Canadian account. And, I lose money again if I convert them back to US$ to travel solo. Frustrating! So I went to my bank to open a US$ bank account and that’s when things got interesting.
By getting an upgrade on my bank account I received a rewards credit card that would typically cost me $185 per year. Now, I have always rejected the cards that I have to pay for because I did the math once and it would take a heck of a lot of useage to make the fee pay off. But now, with this free premium card, I have to take pause and consider…
Where do I get the best rewards points for my buck?
Here’s the situation.
In my experience, banks offer you credit/money when you don’t need it but, should you ask for it, well, they’re not so receptive. So, within reason, my policy is to accept credit whenever it’s offered. (I have it, I just don’t use it. I pay off my cards every month.) Here are the cards I have on the go:
- A free American Express ‘air miles’ credit card. (I’ve had it for years and bought my MAC with reward points from this card.)
- A standard Visa card that offers no reward points. (Visa is so well accepted that it is an important card to have when traveling.)
- A Mastercard (This is my back up card. I rarely use it.)
- Of course, being Canadian I also have an Aeroplan card as this is the airline I fly most often.
With my upgraded bank account I got:
- A Visa card in $US (great for travel. I can purchase and pay off the card using $US)
- A Travel Rewards Visa Card
Here’s the analysis:
So, the main question is, what’s my go-to card? Whenever possible, do I use my Air Miles Credit Card or my Travel Rewards Visa Card.
Air Miles Card
With this card I earn:
- 1 point for approximately every $20 spent. There are always promotions and incentives but generally that’s it.
What’s a point worth?
- To fly from Toronto to Montreal return costs 960 points + 189.22 in taxes and fees. I would have to spend approximately $19,200 on my card to accumulate 960 points. At the time of writing, I checked with the same airline directly and the cost of the flight with taxes and fees would be $258.15 thanks to a seat sale. That’s a difference of $68.93 + those 960 points. I’m inclined to pay cash and save the points for goods. Plus, there are a limited number of seats available for Air Miles.
Travel Rewards Visa Card
With this card I earn:
- 3 points for every dollar spent
- 9 points for every dollar spent with the TD Travel Rewards Centre (the spelling is right – it’s a Canadian thing)
What’s a point worth:
- 20,000 points is worth $100 – at 3 points for every dollar, For the $258 ticket above I would have to spend $17,200 on the card. At 9 points for every dollar I would have to spend $5,733 on my card.
- I like this: The amount I have to put on my card is significantly less than with the Air Miles Card and there are no black-out dates. Also, those points include the taxes and fees for the flight. I should also mention that I was told that I can book any deal I find online through the Travel Rewards Centre.
Another option, of course, is a cash back card. if I got a card with a 2% cash back, I would receive $344 for spending $17,200 and be ahead $86. However, if I got those points at 9 / dollar spent, I would only earn $114 and be behind $144. Given that I travel a lot it will take some time to determine whether cash back would be better than points.
I hope this has proven valuable to you. It certainly made a few things clear for me.
This post was sponsored by Virgin Money. The analysis, numbers, cards considered… everything else was my own.