Many people in Canada have likely wondered how to travel for free with credit cards? The concept is simple, signup bonuses, smart spending, and travel rewards could get you free flights and hotels. The problem is, there are a limited amount of credit cards in Canada, so is it actually possible to travel for free?
Technically speaking, if you accumulate enough points, you could travel for free, but most people are looking for a short-term fix. As long as you meet certain requirements, it’s pretty easy to get some big discounts or free travel. The key is to use the best travel credit cards in Canada and understand how the various rewards programs work. Don’t worry, this step-by-step guide will walk you through the process and get you to your next destination in no time.
Go for the signup bonus
The easiest way to earn free travel is to look for credit cards with big signup bonuses. Generally speaking, you want to look for cards that offer at least $250 in value off the top to make it worth your while. Our list of the best travel credit cards in Canada shows you the annual fee and what you could earn in rewards in the first year.
For example the BMO World Elite MasterCard has a spending bonus of 35,000 points which has a value of $250. Those points can redeemed for any type of travel.
Don’t worry too much about the annual fees
Admittedly, many people hate paying an annual fee, but it’s important to think about the big picture. Quite often the signup bonus and additional benefits are worth more than the annual fee. Travel insurance alone could be worth a few hundred dollars so you’re instantly getting your money’s worth as soon as you take one trip. It’s also worth noting that some of the best credit cards in Canada will waive the annual fee for the first year so you can try out the card for free – and get the signup bonus – as long as you cancel the card before your anniversary date and fee come up.
Understand the rewards program you’re signing up for
Every rewards program is different so it’s important to understand how you can claim your rewards before you apply. Scotia Rewards, CIBC Aventura, RBC Rewards, BMO Rewards, and Membership Rewards from American Express all have no blackout dates, no seat restrictions, and you can pay for your taxes with your points.
Airline credit cards such as the TD Aeroplan Visa Infinite Card and the CIBC Aerogold Visa Infinite both have certain restrictions when claiming rewards flights, but that’s due to the nature of Aeroplan. Using Starpoints to claim nights at Starwood hotels is pretty easy, but don’t forget about the option to transfer your points to Marriott who has a book 4 nights, get the 5th night free as an ongoing promotion.
Make sure you meet the minimum spend requirement
With most signup bonuses, a minimum spend is required. Think $1,000 in the first 90 days or $3,000 in the first 3 months of cardmemberhsip. There are a few cards that offer a signup bonuses after your first purchase, but those are becoming increasingly rare. Generally speaking, the higher the signup bonus, the more you’ll have to spend in the first three months. Now obviously, if you can’t meet these spending requirements, then you shouldn’t be signing up for the cards. That being said, if you know you have major purchases coming up, it may be a good idea to sign up for a new credit card first. Never buy things you don’t need just to reach the minimum spend, and always pay off your full balance every month.
Churn credit cards
Now that we’ve established that signup bonuses can be quite lucrative especially with cards that waive the annual fee for the first year, it’s time to take things one step further by churning credit cards. This is where you sign up for new cards, get the signup bonus, and then cancel the card. Rinse and repeat this strategy with the same cards or new cards every 6 – 9 months and you’ll be earning big bonuses on a regular basis. Yes, you’ll take a hit of 10 points to your credit score every time you apply for a new card, but that will go back up after a few months of making your payments on time.
Keep in mind that you shouldn’t cancel all of your credit cards. It’s worth hanging onto your oldest one since your credit history is one factor that determines your credit score. You’ll also want to keep at least one credit card that gives you a comprehensive travel insurance package or additional benefits that you enjoy such as free checked bags or lounge access.
Take advantage of multipliers
Most travel credit cards have multipliers where you can earn additional points in certain categories. For example, the Scotiabank Gold American Express Card earns you 4 Scotia Rewards for every $1 spent on eligible gas stations, grocery stores, dining, entertainment. By choosing the right card when paying, you can easily turbocharge your earning potential.
You could also get the Tangerine Money-Back Credit card which allows you to pick up to three categories where you’ll earn 2% cash back. Just choose different categories than the ones on the Scotiabank Gold American Express card and you’ll have up to 7 total categories where you’re earning a minimum of 2% in rewards. Keep in mind that the Tangerine card is a money back card, so you’ll need to save that money earned and put it towards your vacation to maximize its value.
Scotiabank®* Gold American Express® Card
Earn 5x the points on groceries & restaurants + earn up to 40,000 bonus points within your first year.
- Annual fee: $99
- Until February 28, 2019: Earn 15,000 bonus points (value: $150) when you make $,1000 in everyday purchases in the first 3 months
- Earn 4 Scotia Rewards points per dollar on gas, groceries, entertainment, and restaurants; 1 point per dollar on everything else
- Discounted membership to Priority Pass airport lounges
Consolidate your points
Ideally, you want to try and stick to one rewards program, but that’s not always possible. Check to see if your chosen rewards program allows you to transfer points to partners. For example Starpoints can be transferred to 30+ airlines. If you choose to transfer to Aeroplan, they give you 5,000 bonus miles for every 20,000 points you transfer which makes the transfer ratio 1:1.25.
If possible, see if you’re able to combine points with your spouse. That might mean transfering points to one partner to manage or even getting a supplementy credit card so you’re both earning points for a single account. Also note that due to a combined household income, you’ll likely qualify for higher end cards which means betters signup bonuses and/or multipliers.
The final thought
Travelling for free with credit cards can be done, but it requires you to look at the big picture. Signup bonuses and multipliers make it easy to earn rewards fast, but you also need to consider the type of rewards program your joining and what options they offer. Remember, these points are only worth it if you’re paying the full balance every month. Paying interest charges is never worth any rewards that you may earn.