Graduation season is here, and many new grads have wanderlust fever. Visiting must-see bucket list destinations however, can take a good chunk of change; especially on an entry-level budget. And for most new graduates, the diploma usually comes with bills for student loans — not plane tickets around the world.
When Brian Kelly was a new graduate and getting his start on Wall Street in New York City, the last thing he was thinking about was traveling the world. “When I was first moving to New York City and making a $50,000 salary, I thought I’d be rich. But $50,000 doesn’t get you very far in New York,” says Kelly.
His solution? He gamed the system and figured out how to work frequent flyer miles and points to his advantage. This led to a new career. He founded the The Points Guy — a brand that specializes in air travel, frequent flyer miles and points.
Now Kelly has a whole crew of trusted experts on staff, working with him to provide advice on points, miles, credit cards and money-saving tips. We caught up with Emily McNutt, associate news editor at The Points Guy, to get her advice for new grads. She gave the scoop on a wide range of tricks and hacks that will help you live your best post-grad life.
Score the correct credit cards after graduation.
– Before applying for any credit cards, check your credit report from all three major credit bureaus — Experian, Equifax and TransUnion. But don’t pay to get these reports. Instead, use annualcreditreport.com where you’re entitled by law to a free report from each bureau every year. Then if you find any incorrect information on your reports, contact the credit bureau to have it removed before proceeding to apply for a credit card.
– If you don’t have much credit history, you may not be able to get a premium travel rewards credit card right away. But start slow with a solid cash back card or possibly a credit card designed for students and recent graduates like the Citi ThankYou Preferred for College Students, and soon enough you’ll be collecting plenty of points and miles.
– Don’t let a lot of bells and whistles from a fancy credit card tempt you into getting one that isn’t right for you. Figure out what your travel goals are, then match those goals to the type of credit card rewards that will be best for your needs.
– The Citi Double Cash is an excellent everyday card for many people starting out. It earns 2% cash back on all purchases, and there aren’t any complicated bonus categories or point redemptions to worry about.
– If you apply for a credit card and get declined, it’s worth a phone call to the bank to see if any additional information might change the decision. Explain why you need the card and that you’re willing to start with a small credit line. And if you have any other credit cards with that same bank, ask if you can move some credit from your existing credit card to the new one.
Save up for the post-grad trip of a lifetime.
– Never carry credit card debt. The interest you’ll pay for running a balance instead of paying off your bill in full each month will cost you more money than you’d ever make back in travel rewards. Only buy what you can afford to pay for in full with a credit card.
– If you’re accumulating points and miles for your post-grad trip, use an app like Award Wallet to keep track of all your accounts, passwords, mileage balances and even expiration dates so you never accidentally let your miles expire.
– Instead of collecting points and miles in a lot of different programs, try to focus your efforts on just one or two programs. It’s more useful to have a lot of miles in just a few accounts than a few miles in a lot of accounts.
Utilize points and miles to maximizing travel experiences on a budget.
– You’ll get the most out of points and miles if you can be flexible in the timing and number of stops you’re willing to make on your trip. Free flights aren’t usually available for nonstop trips during the holidays, but rather on multi-stop itineraries at times with less demand.
– When booking with points and miles, don’t forget that most major U.S. airlines also partner with international airlines, and you can use your airline’s miles to redeem for flights on those partners.
– Almost all frequent flyer programs let you book one-way tickets with miles, so don’t assume that you have to fly the same airline for the entire round-trip. Search for mileage redemptions in one direction at a time — the perfect flight to your vacation spot could be available on one airline, while a different airline might have the perfect flight home.
– If you’re having trouble finding available award seats on a route, try searching for nearby cities or smaller airports, either near your departure city or the area you’re hoping to travel to. If you can find a great flight to a city that’s just a few hours away, then you might be able to make up the remaining distance with an inexpensive second flight or even a train ticket.
– If you have a corporate credit card, ask your employer if you can keep the travel points you earn with that card. Certain banks will allow you to tie your corporate card to your personal travel rewards account, though it depends on the bank’s agreement with your company and it may involve a fee. In particular, American Express Corporate Green and Gold cards can often be linked to your personal Membership Rewards account for $90, while linking Corporate Platinum cards is free.
– It’s important to learn how to budget in order to avoid getting yourself into debt. Paying interest on credit card debt is just “lost” money since you don’t get anything for it, and it’s money you can’t put toward something else. So always pay your bills in full and on time.