Credit cards aren’t just great for building credit. If you use them responsibly, credit cards can help people build their wealth and reach long-term financial goals sooner. Many credit cards allow you to accumulate points for every purchase, and they often come with additional perks.
Deryn Russell is the founder of Inside the Upgrade, a company that helps people discover the world of affordable luxury travel. Russell explained how using a credit card for everyday purchases has helped her start her business and build wealth while traveling to different parts of the world.
Russell saves a lot of money on trips thanks to her credit cards. She explained how spending money with a credit card made expensive travel more affordable.
“Credit card points have absolutely revolutionized the way I travel and instigated my creating Inside the Upgrade in the first place,” she said. “Thanks to points, I’ve been able to book luxury hotel stays — most recently on Naka Island in Thailand — and fly business class all over the world — Paris, India, Japan; it’s pretty amazing. These are experiences I never would have been able to afford that I can now regularly enjoy thanks to points.”
Wondering how much you can save with travel rewards cards? Russell outlined how much she’s saved, and it’s a big eye-opener.
“I’ve saved over $40,000 on business-class flights for myself and my partner that I’ve tracked — and I’m not caught up tracking from last year! — plus at least $5,000 in luxury hotels.”
Although a cash-back credit card can help some people, it’s not the optimal card for people who want to save on travel. Russell explained why she prefers to have multiple travel rewards credit cards instead of a single credit card that offers unlimited 2% cash back on all purchases.
“The difference between a points card and a cash-back card is all about maximizing your return and how you want to use it,” she said. “I want to leverage my points into luxury experiences I wouldn’t be able to buy with 2% cash back.
“If you just need the cash back, that’s completely fine as well — your points and your money are yours to use how you want! The distinction is that instead of earning 2% on all purchases, I’m earning 4x points on groceries and dining, 5x points on flights, etc., and then I can redeem those for WAY higher valuations when I transfer the points to travel partners to book flights and hotels.”
Each person has different spending habits, and you should keep those in mind when deciding which credit cards to use. Russell shared the credit cards she uses for accumulating travel rewards points and other perks:
“My main card for groceries and dining is the [American Express®] Gold because you earn 4x on these categories. I have the [American Express®] Platinum, honestly, for the lounge access — it’s incredible when you can get in. You earn 5x points on [qualifying] flights, and the statement credits make it affordable for me.
“The Chase Sapphire Preferred is a great beginner card that earns you travel points for a low fee, which I also have. The Capital One Venture X is my everyday card — you earn 2x on all purchases, so if I’m not buying food/flights, this is what I’m using, and they’re opening some fantastic new lounges.”
Although Russell has a few key credit cards, she also opens additional cards for their welcome bonuses. “I also have a few business cards that I primarily leverage for the welcome bonus, keep for a year, and then either downgrade or cancel when it comes to renewal.”
Travel is a big line item for many people’s budgets, but it’s more manageable for Russell.
She explained how her travel credit cards give her financial flexibility, which has helped her make more investments. “[Using credit cards for travel] also allows me to save the money that I would have spent on vacations — I can put that into the stock market instead and use points to fund my travel.”
Although credit cards can give you points and other perks, they also lead some people to financial ruin. Falling behind on debt and having it compound at a sky-high rate can undo the benefits that you get from using a credit card. Russell shared two pieces of advice to help you avoid mistakes when you use a credit card.
“Not spending extra money you wouldn’t have otherwise: I earn thousands of points a year, and it’s not from buying extravagant things; it’s from maximizing my existing spending categories. I live in [New York], so I spend a lot on dining out. As such, I have a card that gives me extra points in this category. I don’t have a car, so cards that give points on gas don’t matter to me. It’s all about selecting what works for you.”
Russell also mentioned not getting distracted by flashy perks that you won’t end up using.
“Not getting distracted by statement credits you don’t need: A lot of cards now are almost coupon books. The [American Express] Platinum is $695 a year, but it comes with a $240 digital entertainment credit, $200 hotel credit, $15 monthly Walmart+ membership, etc. But if I wouldn’t spend $15 a month on Walmart anyway, that’s not ACTUALLY saving me $180/year. It’s important to keep that in mind.”
