If you’re a frequent traveler, you’re probably a member of a hotel-branded loyalty program or you may have a travel rewards credit card. These programs help you earn points which you can use to book future hotel stays.
However, you often needs tons of points to cover the full cost of your hotel room. Chances are, you don’t have enough points to pay for your entire trip. Does that means you’re stuck paying for it with cash, instead?
Luckily, there’s a compromise known as the cash and point option. With this approach, you can use your points to finance part of your stay, allowing you to save money.
How to earn hotel points
There are two ways to earn hotel points. The most straightforward is to join a hotel loyalty program. You’ll earn points for every time you stay at a particular hotel chain. Over time, you can earn enough points to pay for a free night. While this approach is simple, you’ll have to spend a significant amount of money on hotel stays before you can qualify for a free night.
A better way to earn points is to apply for a travel rewards credit card. You can earn points on airfare, hotel stays, car rentals, cruises, and even routine purchases like gas and groceries. By earning points on other transactions, you can qualify for a free stay much faster.
For example, you can earn 2X points per $1 spent on Southwest purchases and Rapid Rewards® hotel and car rental partners with the Southwest Rapid Rewards® Premier card
. You’ll also earn 1X point per $1 spent on all other purchases, and there’s a 60,000-point signup bonus — a $600 value — if you spend at least $2,000 on new purchases within the first three months of opening an account. You could redeem those points for free travel arrangements, including hotels.
If you don’t have a credit card yet, check out the best travel credit cards and apply for one to start earning points.
What is a cash and points option?
When it comes time to redeem your points, you can use them to book a hotel stay rather than needing to pay cash for the reservation.
However, you may need a lot of points to cover the total cost of your trip. Your current point level may only cover some of your trip. But rather than paying for the hotel stay completely out of your own pocket, you can do a hybrid approach: use your points for a portion of your stay, then pay cash for the remaining balance. The cash and points option can help you save money on your hotel stay while allowing you to use the full value of your points.
For example, let’s say you had 60,000 bonus points from the Southwest Rapid Rewards® Premier Card. If you planned on staying in Orlando, you could stay at the Renaissance Orlando at SeaWorld for four nights; it would cost you 69,500 points. You could use your 60,00 points to pay for the bulk of the stay, but you’d have to pay out of pocket to cover the cost of the other 9,500 points.
To buy Rapid Rewards® points, you’ll typically pay about 3 cents per point. To purchase an additional 9,500 points, that means you’d have to shell out $285 to cover the complete cost of your hotel stay.
That may sound steep, but it’s actually a good deal. If you were to pay cash for the entire reservation, you’d have to pay $738. By using your Rapid Rewards points, you’d save about $450.
Each credit card has their own point valuations, and hotel room point values vary by location, timing, and availability. However, most major programs allow you to use both cash and points to book your hotel stays, allowing you to redeem your points and save money.
The cash and point option can be a smart way to get discounted hotel stays. If you don’t have enough points to cover your trip, you can use what you have to get a significant discount. Having the option of using both cash and points gives you greater flexibility in making your travel arrangements.
If you’re looking for a good rewards credit card so you can start earning points, check out the best credit cards of 2019.
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