For Elise’s 35th birthday, I bought us a couple plane tickets flying from Dallas to Frankfurt Germany and it only cost me $136. I usually have a hard time finding a good gift for Elise for Christmas, birthdays, Mother’s Day, etc. We’ve always talked about going to Europe, and this year I just decided to do it. We’ve always wanted to visit the Czech Republic and Germany (we want to travel the world eventually, but we’d really like to visit our “homelands” first). Here’s how I did it:
- I talked to friends. My friend Travis and his fiance went to Paris for Christmas. My other friend Andrea went to Belgium in January. Both advised to buy tickets in advance (both purchased their plane tickets 6-9 months in advance to get the best deals on airfare). They also advised to fly into Frankfurt. I’d originally wanted to fly directly into Prague, but found that I could save almost $1,000 by flying into Frankfurt and then take a train to Prague.
- I used a credit card. We have a Citi AAdvantage Platinum MasterCard that earns American Airlines travel points for every dollar we spend.
That’s really it. Now, regarding Step #2 above, I adhered to my own stringent guidelines. Over a decade ago I found myself in a bit of a pickle with a credit card. I wasn’t really financially responsible with the credit card that I had, I got in over my head and was having a hard time paying off the monthly minimum. To spare you the details, I got myself out of debt and swore off credit cards. That was until debit cards became the new means of cash transactions some years ago. I’m of my dad’s teachings and I still write every checking account transaction in our checkbook ledger. This was getting to be a pain in the ass for all of the daily transactions we were making on our bank’s debit card. That’s when I decided to go back to using a credit card. My decision was based on two things:
- We would never carry a balance on our credit card
- I would write 1 check (or make 1 online payment from our bank’s website) a month for all of our transactions. This would be 1 payment to the credit card company versus over 50 individual checking account debits
- We would accrue some kind of “reward” for using a credit card. We decided on a credit card that would earn airline miles.
So we make all of our usual purchases using our MasterCard. These transactions include daily things like groceries, gas, clothes, dining, etc. If I can use the credit card for recurring payments, I’ve set those up as well. For example, our gas, water, cable/internet, website hosting are all paid with the MasterCard. These are all things that I’d ordinarily write a check for, so instead of writing a bunch of checks or making online payments, they’re all taken care of with the credit card and then I make one “big” payment each month to Citi. And I earn travel rewards on top of it all. And the most important part: I pay the balance every month so as to not pay any interest on credit card transactions.
When I was going to buy the plane tickets to Germany, I didn’t think to use my travel rewards miles at first. I was going to purchase them on the credit card and then pay the balance at the end of the month. Then I realized we had 6-figures worth of points that could be used. I called American and had them help me purchase my tickets. All that I had to pay was the $136 in tax.
So if you know that you can pay off the balance every month, use a credit card that offers some sort of rewards program to make purchases you would ordinarily pay cash for.