How Your Summer Vacation Can Pay for Your Winter Travel

Most of us tend to do the majority of our traveling during summer vacations and winter holidays. The reason for this is both social -- school and family -- as well as practical: Travel is expensive, and it can take you a couple of seasons to save up for the next trip.

But what if it didn't? What if you could use that pricey beach vacation to also cover your Thanksgiving back home?

Well, you can. With a little strategy and planning, you can use points earned with rewards credit cards to pay for the flights, hotel rooms, maybe even the rental car on your winter travels. At the very least, you can give yourself (and travel budget) some breathing room by covering one or more of your major expenses.

How it works

Summer vacations come with a lot of costs. Airfare alone has gone up more than 17% over the last year. Even if you don't fly, booking a hotel can be a huge expense. While that's bad for our budgets, it's good in terms of earning rewards. The more you spend, the more you earn.

When you do all that travel spending on a credit card that earns 3X to 5X points per dollar on travel -- well, you can see how that can add up fast.

But that's not even the best part. Open one or two new travel rewards credit cards before you start booking your summer vacation. Then you can use your vacation expenses to earn some sign-up bonuses. These big bonuses are your ticket (I couldn't resist) to traveling for free.

Picking the right rewards credit cards

You have a few choices for how you can approach choosing a rewards card. If you regularly use the same hotel brand or airline, consider a cobranded hotel or airline credit card. These cards earn rewards that go directly into your loyalty or frequent flyer account. They can also have nice brand perks, such as hotel cards that come with elite status.

Alternatively -- or additionally -- you can get some extra flexibility with travel rewards cards that earn transferable points. Here are four of the most popular programs:

• American Express Membership Rewards
• Capital One Venture Miles
• Chase Ultimate Rewards
• Citi ThankYou Rewards

Rewards points from these programs can be transferred to different airline and hotel loyalty programs. For example, you could transfer your Chase Ultimate Rewards points to the World of Hyatt program to book a free hotel room.

Transferable rewards have more flexibility, since they can be transferred to multiple partners. However, once you transfer them, there's no going back, so only do so when you're ready to book.

Other considerations

While the rewards themselves are important, there are also other things to consider when choosing the cards you use to pay for your summer travel. The annual fees, for instance, can be a barrier to some of the cards. Unfortunately, many of the best sign-up bonuses come from cards that also have annual fees, so it's a delicate balance.

And then there's the bonus: Sign-up bonuses generally have spending requirements. Ideally, you can meet the whole requirement easier with what you were already going to spend on your summer vacation. If not, however, you need to think about how long it will take you to earn the bonus.

The sooner you can get your hands on your rewards, the better. Booking award travel can be tricky at the best of times -- and the busy winter holiday season is definitely not the best of times. Booking sooner is almost always better when it comes to peak travel times, and you typically need your points already in your account to complete a booking, so come prepared.