The average American wedding cost about $35,000 last year, and the hefty price didn’t even include the honeymoon! What you didn’t know is that you can get a honeymoon almost for free if you know how to navigate the world of credit cards and rewards.
In a viral video shared on Instagram in March, under the username @your.richbff, self-made millionaire and former Wall Street trader Vivian Tu explains how you can get free flights and/or hotel stays for your honeymoon simply by opening a new travel credit card as soon as you start wedding planning.
Tu told Newsweek that many credit cards offer different perks and incentives, so it’s crucial that you find one that rewards you in a way that you value. And if it’s travelling that you value, then a travel focused card may be for you.
“Typically, these cards provide the highest points multipliers for things like booking flights, and hotels,” she said. “With these points and rewards, you can then redeem that for free travel or hotel stays.”
your.richbff
How much money do you need to spend to get enough points?
In the viral post, Tu explains that most of the cards usually offer rewards only after you’ve spent thousands of dollars within a certain number of months. That’s why you should open it as soon as you start planning your wedding, so that you can rack up all the points from paying for all things wedding and easily get your hands on the freebies.
“When you’re paying for things like your dress, those invitations, the tuxedo rental, you will have the opportunity to pay in credit card and I’m going to ask you to use that new credit card and no other cards,” she says in the clip.
“Your wedding spending will then get you that welcome credit card bonus that you can then use to get free flights or free hotels on your honeymoon.”
Rewards and signup bonuses vary depending on the type of card you select, and so does your minimum qualifying spending.
“Typically, what I recommend is instead of using the credit card portal directly, you can actually transfer those points over to [a] travel partner,” Tu said.
“Certain airlines and hotel chains, and travel providers are partnered with these credit card companies, and you can convert those points over and then redeem them for travel. It’s just a great way to manage your everyday spending so that you can then get some free travel out of it too.”
While we all have the right to want the best for our wedding, Tu warns couples not to overspend carelessly.
“Many couples planning their weddings will go over budget, and that is OK,” she said. “Just make sure that you are able to find that buffer somewhere else in your budget. Do not go into debt for [your] wedding, do not overspend and start your married life on precarious financial footing.
“I know, there’s a lot of emotion involved, and you’re allowed to want what you want on your special day, but always try to balance that with being smart and mindful of your own financial future going forward.”
Other aspects to consider when opening a new credit card for the rewards
Keith Spencer, CFP, founder and financial planner at Spencer Financial Planning, and certified member of the Alliance of Comprehensive Planners (ACP), told Newsweek that when you open a credit card to get the signup bonus, you should be mindful of fees.
“These cards often come with annual fees, so you’ll want to be thoughtful about whether it’s worth the added expense and whether you’ll want to keep the card open after receiving the bonus,” he said.
“If you decide to close the account, you can do it at any point before the next year’s anniversary of having the card open. Credit card companies will often even reimburse the fee if you close the account shortly after the fee is charged at the one-year anniversary.”
However, he also explained that closing an account can impact your credit score.
“If you close a credit card, your overall credit utilization ratio will go up, all things being equal, which could slightly negatively impact your credit score. But I wouldn’t let this drive your decision if it otherwise makes sense to close the account.”
If you don’t want to close the account but also don’t want to pay fees, Tu suggests downgrading your credit card to a no-fee card.
“Oftentimes many of these providers have multiple tiers of cards and should have a no-fee card that you can easily downgrade to, but they may not have necessarily as many good perks or rewards,” she added.
When you should avoid opening a credit card
While credit cards can be a great tool to get freebies off of your everyday spending, they can also land you into debt, if you don’t make wise usage of them.
According to Spencer, people who struggle with debt and overspending should think carefully before opening a credit card and may be better off without one.
“Any rewards that can be gained from using credit cards will quickly be overwhelmed by interest charges if you don’t pay off the credit card in full every month,” he said. “So if someone is struggling with debt and overspending, I normally recommend not using a credit card at all, but instead only using cash and/or debit cards.”
Do you have videos or stories you want to share? Send them over to life@newsweek.com with some extra details and they could appear on our website.