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Aug. 2, 2019, 5:02 a.m. EDT

Use this year’s vacation to pay for next year’s vacation

It pays to think ahead

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By June Casagrande


iStock/Getty Images

This article is reprinted by permission from NerdWallet .

If you’re gearing up for a vacation, you might be wincing at the cost. Plane tickets, hotels, rental cars, meals and activities can turn any getaway into a financial burden. But what if this year’s vacation could pay for next year’s, or at least cover a good chunk of it?

Thanks to  points and miles , it’s possible, especially if you’re willing to pledge your loyalty to one or two brands.

Pick a hotel group

The goal here is to be able to pay for next year’s hotel with points you earn this year. The first step? Reserve your 2019 hotel in the same family of hotels you’ll stay with in 2020, and sign up for that chain’s loyalty program.

Look at hotels in the place where you’ll spend your upcoming vacation, note a few you like, then search hotels in the place where you expect to vacation next year. Most will be part of the Marriott, /zigman2/quotes/200170042/composite MAR +0.40%   Hilton, Hyatt /zigman2/quotes/207542923/composite H +0.10%  , IHG /zigman2/quotes/204459500/composite IHG -3.40%  , Wyndham /zigman2/quotes/206717710/composite WYND +0.20%  , Best Western, Radisson or Choice Hotels /zigman2/quotes/202943946/composite CHH -1.14%   chains. Now pick a 2019 favorite and a 2020 favorite within the same family.

Pick an airline

The same philosophy applies to your airline: Fly this year and earn points toward next year’s trip. This can be trickier, though, as a carrier with great fares to your 2019 vacation spot may not be competitive to your 2020 destination — or even an option. And fares frequently change.

Just make your best educated guess. Search for tickets for this year’s destination and next year’s to see which airlines have the most competitive fares right now. Sign up for that airline’s frequent flyer program.

Apply for two credit cards with big sign-up bonuses

This is where you’ll earn the bulk of points to redeem next year. Credit card sign-up bonuses offer you tens of thousands of hotel points or airline miles after you’re approved and meet a minimum spending requirement.

Check the latest credit card offerings for your chosen hotel group and airline, then apply for the ones that best suit you. These cards often come with perks that make travel easier, such as free checked bags or late-checkout privileges.

But proceed with caution: Earning that big bonus typically requires you to spend a minimum of $2,000 to $5,000 on the card in the first three months. Be sure you can meet that requirement, while paying off your balance in full each month to avoid interest charges. And be aware of cards’ annual fees, which can eat into the value of the bonus.

If necessary, stagger your credit card applications so you can focus on using one card for three months, then the next card for the following three months, even if it means you can’t use one of them on this year’s trip. And be sure both cards you apply for are ones you can keep and use regularly, as opening and closing accounts can have an effect on your credit scores.

Book your 2019 trip with your new cards

Travel credit cards can boost your points-earning potential with your chosen airline or hotel group. For example, members of Hilton’s Honors program earn 10 points for every dollar spent on a qualifying hotel stay, but booking with a Hilton /zigman2/quotes/202780307/composite HLT -1.14%   card can earn an additional 7, 12 or even 14 points per dollar.

The same dynamic applies for airline loyalty programs: You earn miles just for flying, but you can increase those miles substantially by paying for your flight with an airline-branded card. One thing to balance: Airfare tends to spike within two weeks of travel dates, so if this summer’s trip is fast approaching, you might need to book flights before you secure a new card.

Be strategic in everyday spending

Routine spending can help pay for next year’s vacation, too, because travel rewards credit cards generally pay at least 1 point per dollar on anything you buy. Some cards give you a points boost in certain spending categories, like restaurants and gas stations.

Other opportunities include:

  • Using your airline or hotel’s virtual mall, a web portal where you earn bonus points by shopping at hundreds of big-name retailers.

  • Signing up for an airline or hotel’s dining rewards program, to enhance your earning potential when you dine out.

If you don’t like the idea of a hotel- or airline-branded credit card, you can devise a similar strategy using general travel rewards or even cash-back credit cards. The goal is to maximize the rewards you earn in 2019 so you’ll have points to spend in 2020.

More from NerdWallet:

June Casagrande is a writer at NerdWallet. Email: travel@nerdwallet.com.

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