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Points, cash or combo? The best way to book a getaway

What we'll cover

  • How to use points and rewards to save money on your trip

  • Five things to do before your trip

  • Why creating a budget can help you make the most of your vacation 

A great getaway requires great planning. Before you can kick back and relax, you must decide where to go, the best way to get there and when to travel. (Not to mention, you have to save money to pay for it all.) Sifting through the endless options to find the best deal can be overwhelming, especially when you start to factor in how (and when) to use credit or reward points. If you’re feeling a little lost, start by assessing your options and make some basic cost comparisons.

Book transportation and accommodations

By and large, the most expensive part of travel is getting there and lodging (unless you have friends or family offering to host – lucky you). Since that is where the bulk of your travel budget will go, it’s important to compare costs to limit overspending where you can. Travel reward credit cards, accumulated rewards or cash can all offer different perks.

The power of points

Credit cards with travel rewards can be a great way to book accommodations, airfare, transportation and maybe even score some upgrades. You may even get additional perks like access to airport lounges or discounts with certain vendors. However, when it’s time to redeem or book with your points it’s important to compare real costs carefully. All points are not created equal, and they may have different comparable values depending on the time of year, where you book and where you redeem them.

When shopping for a travel reward credit card, you may find co-branded cards or general travel cards. Co-branded cards are partnered with a specific airline or hotel chain, and the rewards can typically only be redeemed with them. While that might sound more limiting, co-branded cards often come with additional perks, like free checked bags, priority boarding or free upgrades and bonus amenities. Meanwhile, general travel credit card rewards can be redeemed across various vendors and different types of travel purchases, giving you more flexibility when you book.

Travel credit cards typically reward you based on your spending (such as 1.5% to 3% of your purchases). Some may offer double or triple rewards for travel-related purchases, allowing you to rack up points faster—especially if you travel often. Keep in mind that some cards charge annual fees and/or offer sign-on cash bonuses, so factor those amounts into your evaluation.

Consider caveats

Before you commit to a travel rewards credit card, be sure to read the fine print, which could include restrictions on how or when you use your rewards. These might include things like blackout dates or limited seat availability on flights. Also pay attention to transfer partners (aka companies where you can redeem your rewards) and the process for making transfers.

When to use rewards

To get the most out of your points, pay attention to their value at varying times (such as peak season versus off season). You can also compare your points redemption cost to the regular booking price to determine if you’re getting a better deal with your rewards. Note any potential redemption bonus — some reward programs offer a higher redemption rate toward travel, so while you might get 1% cash back, you could get 1.25% if you use those points for travel).

When booking flights with travel rewards, you’ll want to look for the highest cents per mile (CPM). For example, if you earn 1% rewards on every purchase, $5,000 would generate $50 in rewards. Meanwhile, if you are getting 2%, you will get $100. Therefore, the higher reward-redemption rate, the greater your CPM will be. Generally, anything less than 1 CPM is not considered a good redemption value. If you have some flexibility on your travel dates, you can see your reward value across different dates to ensure you’re getting the best deal possible.

Don’t forget to check if your points have an expiration date. If they do—and you don’t have a vacation planned—you might be able to use them locally or cash out before they’re gone.

What about cash?

If you believe cash is king (or you prefer avoiding credit cards altogether), look for locally owned and managed accommodations. Small business owners are more likely to offer a discount for using cash (or debit cards). If you can’t secure a discount for paying with cash, then generally speaking, you will have greater reward potential by using a credit card—especially one that offers cash back, travel rewards, or other benefits—as long as you don’t carry a balance. If you plan to carry a balance and pay down your stay over time, be sure to factor in any interest charges that will accumulate over the time period you expect to make payments.

Learn how to combo

Earning points can feel like “free money” – and if you are able to avoid carrying a balance (and factor in the cost of any annual fees) travel rewards can help take some of the budgeting burden off you and your savings. Using your points right away can be tempting, but learning to compare costs and use your points strategically is the best way to get the most out of your travel rewards. Allowing your points to rack up can also help you save for a trip that might be out of reach without them.

Before you book

Finding the best way to book is only one part of making your travel arrangements. Before you hit that confirm button, make sure you have all your ducks in a row:

Initial research

Vacations are full of possibilities. Before booking, you’ll need to  choose your destination . You should consider your budget, timeframe and the type of vacation you want. For example, are you interested in a relaxing getaway without much of a schedule or are you looking to fully immerse yourself in a new city? The time of year you want to travel in should also come into play, since it can affect everything from the weather to the cost of airfare. Think about the length of your trip as well. Are you planning a quick weekend getaway, or is a long-term journey more your speed?

Understanding where and when you want to travel will help you home in on how much you’ll need to budget.

Narrow your options

How to pay for your travel isn’t the only decision you’ll need to make — you should also compare the costs (and hassle) of booking through a travel agent, an aggregation site (like Kayak,, or Expedia) or directly through the vendor. You’ll want to get a holistic view of the pricing. For example, some sites might include the cost of parking or breakfast while another site could exclude it (and you’ll need to factor it in later).

Don’t forget that not every factor has a monetary value. Cancellation policy, room service, peace of mind and convenience should all be taken into account as you weigh your options.

Create a budget

Don’t forget to  create a detailed budget  for your vacation. Be sure to include the cost of transportation, accommodations, meals, activities, entertainment and any miscellaneous expenses, like gifts or travel insurance . No matter how big or small your trip, you can budget and book strategically to maximize your dollars.

Pro tip: Create your budget well in advance of your trip so you can calibrate expenses as you go. For example, once your flight is booked, you can determine if you over or underestimated your transportation budget.

Find your fun

Once you’ve done all your research, homed in on your options, budgeted, and booked your transportation and lodging, it’s time to think about what you’ll do during your vacation. You might not know that rewards and points can be used for more than just flights and hotels. Some travel rewards can be redeemed toward activities including spa services, excursions, guided tours, sporting events, concerts, dining events and movies. If you paid out-of-pocket for your flight and/or hotel but have some points at your disposal, spending them on activities is a great way to make sure they don’t go to waste.

Book your vacation your way

When it comes to travel, the options are virtually limitless. However you book, spending (and saving) strategically will help you get to your next vacation faster.

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