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How to use your credit card points for the trip of your dreams

Currently, there are around 8 million credit cards circulating in Singapore. Credit cards offer us some great benefits from cash rebates to miles. With every card issuer promoting their card and the rewards you can earn from them, all of the information can become quite overwhelming. This could be why many people tend to use their credit card and ignore the points and rewards that they earn. But with sufficient knowledge on how to use cards points, the possibilities of what can be done with them are limitless! In fact, the points on credit cards can even pay for a dream vacation. How does one go about that? Well, let’s simplify it! Here are 6 ways to use the points on credit cards for the trip of your dreams.

Learn how to redeem points

Not many of us realise this, but redeeming points on credit cards for cashback and gift cards isn’t the best option. This is because gift cards and cashback tend to provide the lowest redemption value. Ideally, they should be redeemed by transferring them to a mileage programme of an airline since the points will be worth nearly 15 times more when used for flights.

Many may be sceptical to do this because earning miles through an airline’s mileage programme means that one needs to be a frequent flyer. That, however, is a common misconception. Yes, you do earn miles on your credit card when you fly, but they are almost always negligible if you aren’t a frequent flyer or your airfare is low. What you may be unaware of is that transferring points to your airline is a more efficient way of earning miles since they are more valuable.

So, how do you earn these transferable points if not by flying?

1. Sign-up bonuses

With every card issuer trying to vie for your attention, there is no dearth of the perks they are willing to provide customers who decide to apply for one of their credit cards. Most cards have extremely attractive sign-up bonuses that provide miles and points once your application is approved. Take, for example, the American Express Singapore Airlines KrisFlyer Card. As part of their promotional offer, new applicants who spend S$2,500 within the first 3 months of having their card approved, can earn up to 12,500 miles. This card even provides supplementary cardholders with 1,500 miles. This way, sign-up bonuses help you earn miles that can be redeemed for cheaper flight tickets.

Okay, so flights are taken care of, but what about your stay? That has a solution too.

2. Dine and shop more

Credit cards offer extra points when you dine out and even when you shop. These points can then be used to make hotel booking. There are credit cards that provide points nearly two times greater for dining purposes than if used for shopping and vice versa. Categories that offer higher points are also called extra point award categories. The HSBC Revolution Credit Card, for example, gives offers 5 times the reward points for every S$1 spent on dining and online shopping transactions.

These points can be used to book hotel accommodations. This isn’t all, they can also help with complimentary room upgrades.

3. Enrol for loyalty programmes

Virtually every hotel chain has a loyalty programme for which you can sign up for free. This doesn’t mean that you need to open loyalty programme accounts with every hotel. If there is a hotel chain you usually like to stay at, then sign up for its loyalty programme. These programmes aren’t just a great way to earn points, but they also provide free upgrades and discounts on other services. Let’s say that you are looking to go on a luxurious holiday, then you should sign up for Hilton HHonors, the loyalty programme by Hilton Worldwide. Members can book hotel rooms with their Hilton Hhonors points and these points can be redeemed with over 60 participating airlines and 4,300 participating hotels. So, when you use your credit card to book a room at the Hilton, you can redeem your Hilton HHonors points and earn points on your card which can be redeemed for accommodation at a later point in time.

In fact, redeeming points at the right time may help you save even more.

4. Consider off-peak travel

When it comes to redeeming points on credit cards, timing is everything. First, make sure you know when the points on your card expire. There is no point in accumulating points with the hope of using it later on for a holiday, only to realise that the points have expired. Second, consider travelling during off-peak seasons. Hotel prices are generally lower at this time as are airfares. This way, you will be able to maximise your reward points so that your holiday is indeed the holiday of your dreams. Avoid redeeming miles during the holiday season, since most carriers will require additional miles for travel during this time.

All of this being said, the most important aspect to ensure that your holiday is exactly what you have always dreamt of is to not forfeit your points by being careless with your payments.

5. Pay your bills on time

If you read the fine print on your card agreement, you may come across terms that state that late payment of your bills could lead to a loss in the points accumulated. Consecutive late payments may also lead to a case where all of your points are lost. Ensuring timely payments will not just help you when you travel, but it will also ensure that your credit score doesn’t fall.

Turning the trip of your dreams into reality isn’t impossible. All it needs is some smart spending when you use your credit card and even smarter redeeming of earned points. Before you plan your next trip, don’t forget to go through this list so that your trip doesn’t remain just a dream.

This article does not necessarily reflect the opinions of the editors or management of EconoTimes.

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