I have been utilizing credit card points for travel since my 20s, so this concept is not new to me. Although I have several credit cards with no international transaction fees, I have narrowed down my regular use to two cards: American Airlines Executive Mastercard and Bank of America Travel Rewards Visa.
I use credit cards when possible to purchase groceries, food at restaurants, airfare, lodging on Airbnb, and excursions/entertainment. The BoA Travel Visa will have 5% cash back deals with Airbnb at times, so if I need to book a rental through that site, I check online with BoA first, and then use that card if a rewards perk is available. This reduces the cost of the rental, since I get some money back. Every little bit helps! Otherwise, I prefer to use the AA Mastercard for any and all purchases. I do this because airfare is the most costly lifestyle expense beyond rent. By earning points on AA, I can fly for "free" or by purchasing my tickets with points.
The last 3 years I have gone on cruises for family vacations. American Airlines offers the same cruise packages as listed on cruise line websites. So I book my cruises through the AA website to earn extra points. These purchases have really boosted my point earnings and helped fund free air travel.
Let's put this into perspective.
I left the US in June 2019 to start my travelers lifestyle. I had 7 individual flights of which I paid for 2, and used points for the other 5 flights. I have half of my 2020 travels planned so far. When I leave Ecuador, I'm heading to Orlando for a math conference and to treat myself to a Disney World vacation. My two flights to Orlando (Quito to Miami, and Miami to Orlando) are paid for with points. When I leave Orlando, I'm heading to Belize and will have 3 flights: Orlando to Miami, Miami to Belize City, and Belize City to Placencia. The first two legs are also paid for with points. Then I have to take a small plane from Belize City to Placencia, and vice versa. There are only two airline options of which a round trip ticket will cost around $280 since it’s high season.
I’m not maximizing the opportunity. I could easily be earning significantly more points by opening new credit cards annually and going for the bonuses. However, I don’t for a few reasons:
1) The credit card will be sent to my US address and I’m not going back anytime soon. Yes, I could ask for a trusted person to read me the numbers and card info over the phone, but it’s too much hassle and unnecessary because of the next reason;
2) The minimum spending to earn the bonus points is often 3K or more within a few months. My monthly expenses are super low now with all of my lifestyle changes, so I wouldn’t even have an opportunity to get remotely close to the minim spending limit to reach the bonus points. Sure I could partner with a friend or family member that needs to make a large purchase soon, but if they don’t pay me back, then I’m screwed out of that money and that relation goes south. It’s just not worth the logistics and potential headache.
Treat each transaction like a debit card purchase.
I want to be very clear that I treat each credit card purchase like a debit card or cash purchase. In the past I was an over spender, and had that mentality, "Oh, I'll just pay for it later when I get my next paycheck." NNNNOOOOOOOOOOOOOOOOOOO. And that's why most of American's are in debt.
When I make a purchase, I look at my credit card app within 48 hours and once the transaction posts, I make a payment. This means I could easily make multiple payments in a week. There is no point in me waiting to the end of the billing cycle to pay. When you spend the money, move your cash to the account and pay it off. PERIOD.
ATMs and Fees
When in Mexico, I pulled pesos from ATMs twice. The first time, I used a non-affiliate bank to BoA, and incurred $5 fee at that ATM plus $15 international ATM fee from BoA. The second time I needed a few more pesos to get me through, I found a Scotia Bank ATM, which is an affiliate of BoA, so I did not incur any fees. Since I was not thrilled about the $20 fees from the first ATM, I did a little research and learned that Charles Schwab reimburses all ATM fees world wide. So I opened a checking account and took advantage of their promotion of earning $100 for opening an account. That was a quick 10% return by just pushing $1,000 from my personal checking at BoA over to CS. Easy-peasy!! At least now I'm set up for the future, and I won't waste any monies on ATM fees.
Lunch in Cotacachi, Ecuador just to put a pic on the page.
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