Bag a free holiday with your credit card!
Use your credit card to get a free holiday this year.
I've just returned from a week's holiday in Barbados - which was fantastic. But the really great thing about it was that it was free! Yes, my very generous parents-in-law-to-be paid for me to join them out there to celebrate their 40th wedding anniversary.
Okay, so I was pretty lucky. If you don't have parents-in-law who are prepared to fork out for your trip abroad, how else can you get a free holiday?
Well, one option is to use a rewards credit card. And there are plenty of reward cards to choose from! Here are the best on offer.
British Airways bargains
One credit card you could consider is the American Express British Airways Card. This card allows you to earn one British Airways mile for every £1 you spend. You'll also receive 1,000 bonus BA miles when you spend £500 in the first three months.
If you opt for the Premium Plus card, rather than the standard card, the benefits are even greater. You'll earn 1.5 BA miles for every £1 you spend, and you'll receive 6,000 bonus BA miles when you use the card for the first time. You'll also receive double BA miles on British Airways flights and BA holidays.
So how many airmiles do you need to get jetsetting?
To give you a rough idea, you can fly to Belgium, France, Germany, Ireland, and the Netherlands for 9,000 airmiles - or 4,500 miles and £45 cash. If you'd prefer to fly to North Africa, you'll need 20,000 miles - or 10,000 miles and £60 cash.
What's more, if you spend £20,000 on the standard card, or just £10,000 on the Premium card, in a year, you'll receive another ticket for a friend to come with you on the same flight. That's a pretty big bonus, if you ask me!
With both of these cards, you'll also receive travel accident benefit - up to £75,000 for the standard card, and up to £250,000 for the Premium card.
Just bear in mind that if you choose the Premium card, you will need to pay an annual fee of £150 - so you will need to consider whether this will really work out to your advantage. If you fly regularly, it may well do.
Another drawback is the fact that this is an American Express card - so it won't be accepted everywhere. It's also worth noting that you will of course be limited to redeeming your airmiles on British Airways flights only. So if you're not a BA fan, you might want to look elsewhere.
The lovely Lloyds Duo
So why two cards? Well, it's simply because, as I said earlier, American Express isn't accepted everywhere - so you'll always have the Mastercard to fall back on. However, you'll get more miles for your money with the American Express card. You'll receive one airmile for every £10 you spend on the American Express card, and one airmile for every £50 you spend on the Mastercard.
You can work out exactly how many miles you can get for your typical monthly spend with this nifty calculator. And your airmiles can also be used for fun activities and days out.
To find out more about the Lloyds TSB Airmiles Duo credit cards, make sure you check out my recent lovemoney.com video on the topic.
If you'd prefer to fly with Virgin Atlantic, you could consider the Virgin Atlantic White Card. With this credit card, you'll receive 3,000 bonus Flying Club miles on your first card purchase, and one Flying Club mile for every £1 you spend thereafter.
If you make a purchase with Virgin Atlantic, Virgin Holidays, and Regus business centres, the benefits are even greater, and you'll receive two Flying Club miles for every £1 you spend.
What's more, if you spend £15,000 on your credit card in a year, you can enjoy a complimentary companion reward flight - so you can bring a friend with you! This card also offers 10% off all Virgin Holidays packages.
So how do the miles stack up? Well, if you fancy flying out to New York, you'll need a whopping 29,500 Flying Club miles. And you'll need an even greater 50,000 if you're flying to Barbados. However, on the plus side, if you've only earned 2,000 miles, you can combine your miles with money to get a great reduced fare.
Go with bmi
Similarly, there's the bmi American Express Credit Card which offers airmiles for, you've guessed it, bmi flights.
If you spend £250 on card purchases within 90 days of opening the account, you'll receive a very generous 20,000 destination miles. That's enough for two economy tickets to Amsterdam. Not bad!
Thereafter, you will earn 1.5 miles for every £1 you spend, or three miles for every £1 you spend on bmi flights.
You can see exactly how many miles you'll need for each country here. And again, you can pay part miles, part cash.
Stretching the rewards
If you'd prefer to have a rewards credit card that isn't limited to airmiles, you could consider the American Express Preferred Rewards Gold Card or the MBNA Platinum Rewards Visa. Both of these offer reward points instead of airmiles, and these can be redeemed for hotels and car hire, as well as flights.
For example, the American Express Preferred Rewards Gold Card offers rewards for a range of travel partners including bmi, British Airways, Eurostar, Virgin Atlantic, Hertz, Hilton and Sheriton.
You can earn double Membership Rewards points on your travel spend, and in the first year, you'll also earn double points on your supermarket and petrol spend. For everything else, you'll earn one point for every £1 you spend. Just be aware that there is an annual fee of £95.
If you'd prefer not to pay a fee, the MBNA Platinum Rewards Visa is a better bet. For every £1 you spend on this card, you'll receive one reward point. These points can be redeemed for flights, hotels, package holidays, city breaks and car hire. You can pay part points and part cash.
A word of warning
So now you've seen which reward credit cards are on offer, you'll need to decide which one you think best suits your needs. But whichever card you choose, it's important to remember to pay off your bill in full each month. Otherwise you'll be hit with a hefty interest rate of interest. This will end up costing you far more than the benefits you gain from the airmiles/rewards.
And don't forget, if you'd like further advice about how to cut your travel costs, lovemoney.com can help. First, read this guide: Have a cheap holiday. Next, watch this video: The worst holiday rip-offs. And finally, why not have a wander over to Q&A and ask other lovemoney.com members for advice?
Compare credit cards with lovemoney.com