Credit cards have become an excellent tool for saving money on travel. Many major credit card providers offer reward cards that provide 30,000 to 50,000 bonus airline miles after you charge as little as $3,000 to $4,000 over the first 3 months of opening the account. They frequently waive the annual fee for the first year. If you don’t want to continue, and pay the annual fee for subsequent years, cancel the card before the end of the year when the fee is due. Additionally, many travel cards have a generous rewards program that allows you to earn miles as you make purchases during the year. Many travel cards also allow you to waive checked baggage fees and provide you with priority seating.
Some cards with an attractive introductory offer include Chase Sapphire Preferred, Capital One Venture Card and Citi/AAdvantage Platinum Select, among others. A helpful website to compare the benefits and fees for various travel cards is creditcards.com/airline-miles.php. Before selecting a new credit card make sure you fully read and understand the terms and conditions. Credit cards opened to accumulate airline miles should only be used by those who pay off their entire balance every month. This should not be considered by those who carry a balance from month to month.
When travelling overseas you should have at least one card that doesn’t charge foreign transaction fees. Many credit cards assess a 3% foreign transaction fee on all international charges. Some companies have begun waiving foreign transaction fees including Capital One Venture Card and Chase Sapphire Preferred, to mention a few.
When travelling abroad, a rewards card without foreign transaction fees is essential but there will be times when cash is required. Use your ATM card to get foreign currency, it will provide you the best exchange rate. Avoid exchanging U.S. dollars for foreign currency at exchange bureaus. ATMs do charge a fee for every transaction so limit the number of transactions by getting as much money as possible each time you make a withdrawal. Additionally, it’s prudent to carry at least two ATM cards, from different banks, in case there is a security concern and access to your account is blocked.
Once at your destination you can save money and enhance the authenticity of your visit by staying and dining off the beaten path. Seek out family run hotels and restaurants that are local favorites. You can often save money by booking a Bed and Breakfast or vacation rental. Booking a room at the last minute can also result in nice accommodations at a reduced price. To find good restaurants, ask local residents for their recommendations. Observe who is patronizing a restaurant and select one that is teaming with locals rather than tourists. Once you select a restaurant, stick with the local specialties and order food that is currently in season.
The demand for travel in 2016 is strong. This has resulted in fewer deals and the need for extra planning if you want to save some money. Flexibility on when and where you travel can have a huge impact on travel costs. Try to avoid travel on major U.S. holidays and on major holidays in countries that you will be visiting. If possible, avoid peak season and travel during the shoulder seasons which fall in September, January and April. Generally, you can save money by flying in the middle of the week or on Saturday afternoon. Additionally, it’s usually cheaper to fly very early in the morning or late at night. Prices will vary based on supply and demand.
Booking your flight well in advance of your preferred departure date can also save money. After analyzing over 3 million airline trips, CheapAir found that the best time to book domestic airfare is 54 days prior to your departure. Similarly, Expedia’s Air Travel Outlook for 2016, found the best time to buy a domestic ticket is 57 days prior to departure and the best time to buy a ticket from North America to Europe is 176 days before departure.
To find the most cost effective combination of date and location use on-line sites such as Kayak Explore. Kayak Explore allows you to interactively change the date to see how the airfare changes for cities throughout the U.S. or the world, all on one screen.
Flexibility with regard to your destination can result in significant savings – costs vary dramatically depending on the country or region you are visiting. In 2016 some of the most expensive countries to visit include Norway, Sweden, Switzerland and Japan while some of the least expensive countries include Slovakia, Croatia, Poland, Romania and Morocco. Information on the comparative travel costs in various countries is available on Numbeo.com/travel-prices and fareness.com. You can also reduce travel costs by flying into smaller cities or less popular cities. When travelling to Europe consider flying into a less popular city on a major airline and connect to cities within Europe on small, inexpensive regional carriers like Air Berlin or EasyJet.
Once you have decided upon a date and destination use airfare search sites such as Cheaptickets.com, CheapAir.com and Expedia.com to shop and compare flights on different airlines. However, keep in mind that several airlines, including Southwest, are not listed on aggregation sites. Do some research and check fares on all major airlines with service to your destination. Check both round trip and one way ticket prices. Some airlines have recently begun offering two, one way segments for less than a round trip ticket. Once you have selected a flight try to book directly with the airline you will be using. The prices are usually comparable and it will be a lot easier to reschedule if any problems arise.
Jane Young, CFP, EA
The cost of a European vacation may seem daunting. However, with some careful planning you can travel to Europe for little more than the cost of a domestic vacation. Two major factors in saving money on European travel are when and where to go. Several countries, such as Romania, Slovakia, Hungary, Portugal, Greece, Spain and Poland can be considerably less expensive than others. If you are trying to save money, avoid Norway, Sweden, Switzerland, Finland, Denmark and Luxemburg. Consider avoiding the big touristy cities such as London, Paris, Amsterdam, Geneva, Rome and Venice until you have more money to spend.
You can reap tremendous savings by avoiding travel during the peak summer season. Airfares and lodging prices are generally very expensive between mid-May and mid-September. You can find great deals on airfare and lodging between October and April. You can also save money by flying on a Tuesday or Wednesday.
Additionally, you can save money by flying across the Atlantic into less popular European cities. Once you arrive in Europe, you can take a train or a discount European airline to your target destination. It is also easier to use frequent flyer miles for flights to less popular destinations. Frequent flyer miles can be a great way to save money on air travel.
Once in Europe, it is inexpensive to get around using trains, buses, subways and discount airlines. If you have a long distance to travel, consider a sleeping train or a discount airline such as easyJet or RyanAir. You will be pleasantly surprised by how inexpensive airfare within Europe can be. A sleeper car enables you to cover large distances while you sleep and save the cost of a hotel for the night. There are places that you just can’t reach by train or bus. In this instance, rent a car for a day or two to visit these special out of the way places.
Save money on lodging by staying at an apartment, Bed and Breakfast or locally owned hotel. You can get better deals by staying in small towns or just outside the city center; this works well in cities with a good subway system. There are numerous resources on the internet to research and read reviews on lodging options. Some of my favorite on-line resources include TripAdvisor, VRBO (Vacation Rental by Owner), Fodor’s and Rick Steve’s.
Finally, don’t pay unnecessary fees to convert money or to pay for travel expenses. Many credit cards charge between 1-3% on European purchases. Use a credit card, such as Capital One, that doesn’t charge extra fees for European purchases. Generally, you can get the best exchange rate on local currency by using your ATM card at a major European bank. With ATMs, you are charged a fee every time you pull out money, so minimize your transactions. Avoid Change Bureaus; they usually have unfavorable exchange rates.