No-Nonsense Guide to Booking a Luxury Vacation with Credit Card Points

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What if I told you it’s possible to book a luxurious, all-inclusive vacation valued at over $3,000, without breaking the bank? That’s exactly what we did in December 2024, and I’m here to show you how you can do it too! With strategic use of credit card points and perks, you can turn your dream vacation into reality – for virtually free. 

This post includes an example of a trip my husband and I took that showcases just how powerful credit card rewards can be when used strategically. Read on to see how we made it happen, and how you can replicate it for your own well-deserved vacation.

Now, I want to preface all this by saying if you are currently in credit card debt, struggle to pay your regular bills, or have a less than ideal credit score, these strategies probably aren’t for you. That’s not to say you can’t get there, and I hope you do someday! You should never ever open a credit card with the expectation that you think you’ll be able to just pay it off eventually. These strategies only work if you use your credit cards with the mindset of a debit card (i.e., you pay off the cards every month or even weekly.) 

Step 1: Leverage Versatile Points with the Capitol One Venture X Card

The Capital One Venture X Credit Card is a one of the best travel rewards credit cards for anyone looking to travel in style without the hefty price tag. This $395 annual fee card provides a $300 annual travel credit that can be used through the Capital One Travel portal. On top of that, it offers free airport lounge access and price-matching for flights and hotels, which has saved us hundreds over the last few years.

The main difference between a branded card (like the IHG card discussed below) and a card like the Capitol One Venture X, is with the IHG card, your points can only be used for IHG hotels. But with the Capitol One Venture X, your miles (Capitol One calls their points currency miles) can be used for just about anything travel-related through their booking portal. OR, you can transfer miles to their airline and hotel partners, which typically provides more value per mile. 

For newbies, I usually recommend a card like this to be your first travel credit card because they are just so versatile.

Between my husband and myself, we’ve earned nearly 250,000 Capital One Miles over the past two years or so through a combination of sign-up bonuses (or SUBs), regular spending, and occasional category multipliers. We used some of these miles to cover the cost of our flights on this trip, and the process was seamless. 

How to Maximize This Card:

• Use the $300 travel credit annually to offset your travel costs.
• Earn 10X miles on hotels and rental cars booked through the Capital One portal.
• Redeem miles at a fixed value of 1 cent per mile for travel purchases, or transfer to partners like Air Canada Aeroplan or British Airways Avios for potentially higher value.
• Don’t sleep on the price matching feature. If you book a hotel through the portal and find it cheaper elsewhere in the 24 hours after booking, just give customer service a call and they’ll credit your account the difference!
• Refer your friends using your unique referral link for 25k points for each referral!
• Sign up for Priority Pass for free airport lounge access.
• Sign up for Global Entry or TSA Pre-Check paying with this card, and you will receive an automatic refund to cover the cost. 

Step 2: Maximize Sign-Up Bonuses on Branded Cards

One of the easiest ways to rack up travel rewards is by taking advantage of sign-up bonuses. A sign-up bonus (or SUB) is an incentive to put spending on that card after signing up for it, after which, you’ll be rewarded with a large chunk of points, or some other perk, like free hotel nights. Depending on the type of card, particularly the annual fee – the higher the annual fee, the greater the SUB and perks typically are. 

In late summer 2024, we jumped on the IHG Premier One Rewards Credit Card, which at the time, was offering an incredible elevated SUB: 5 free nights at IHG properties after spending $4,000 in 3 months. Sometimes credit card companies offer promotions with elevated SUBs, and this can be a great time to hop on a new card you’ve been eyeing. 

Now, $4,000 might sound like a lot to spend on a credit card in 3 months, but we met the spending requirement simply by putting all of our regular household expenses on the card. We are a family of 2 with 2 dogs, so between groceries, car insurance, gas, utilities, and other miscellaneous spend, this is doable for us. 

I would NOT recommend signing up for a card if the minimum spend to meet a SUB is outside your typical spend for that period. For example, if you are a single person, in a low cost of living area and you don’t have any out of the norm upcoming costs, it might not be practical to meet the minimum spend. BUT there can be ways around this, especially if you might be fairly close to meeting the minimum spend. For example, do you go out to eat with friends on a regular basis, or does your roommate need to buy a new bed frame? Offer to put these things on your card and have people pay you back in cash or Venmo. (And if you’re a really good friend, you could even take them on the trip you’re about to book with all these points in return 😉)

The IHG Premier One Rewards Card is particularly great for travelers who enjoy mid- to high-tier hotel stays. Although it has a $99 annual fee, with benefits like automatic Platinum Elite status and a free anniversary night, it’s a valuable tool for maximizing your travel budget. 

The main reason we chose this IHG credit card? It was the fact that Iberostar Resorts are a part of the IHG brand and I have been very interested in staying at one of their resorts for some time now. I’m not exactly an all-inclusive resort girly… You can usually catch me hiking, skiing, etc., but there are many aspects of their brand that drew me. These include their commitment to sustainability, including no single-use plastics and focus on local seafood. Also, if you are going to use free night certificates, using them at an all-inclusive resort gives you so much more bang for your buck because now your food and drinks are covered as well!

Booking A Stay

For our stay, we chose Iberostar Waves Cozumel in Mexico, a stunning all-inclusive beachfront resort in the IHG family. This property offered everything we were looking for – clear turquoise water and beautiful beach, delicious dining options, and an atmosphere perfect for relaxation with plenty of options for activities. Thanks to our 5 free nights from the IHG Premier Card, we covered the entire cost of our stay, food, and drinks.

While Caribbean availability through IHG can sometimes be limited, especially during peak season when we traveled there, we found this gem without even planning too far in advance. We booked in late October for an early December stay. Whenever possible though, planning ahead is crucial when redeeming points for popular destinations.

As I mentioned before, I’m not exactly a resort girly, and part of that is I hate crowds and a party atmosphere, and my husband is definitely not the lay on the beach type. He gets bored after 10 minutes… But this resort had such a chill vibe and also had so much to do! Instead of a giant hotel, crowded pool, and noisy events, this resort had small cabanas, beautiful jungly grounds, lots of wildlife, quiet pool, and private beach. We played pool games, pickleball and basketball, tried archery and windsurfing, and went snorkeling and scuba diving! The best part in my opinion was that the resort had their own dive shop right on site and had 4 boat trips each day so you could dive to your heart’s content. Food at all-inclusives gets a bad rap, but we were pretty happy with the food in general (breakfast was our favorite), and the service was top notch! Besides one night eating in one of the busier restaurants and receiving slow service, all other service at the resort was incredible.

Booking Flights

Using our Capital One Miles, we booked flights on American Airlines through the Capital One Travel portal. While transferring miles to partners can often yield the best value, there weren’t any options to get to and from Cozumel from Boston with the partners on Capitol One’s transfer partner list. So we opted to simply book in the portal, but it’s not typically my top choice, which I’ll explain below.

Our round-trip flights for two cost just $320 in Capital One Travel Credits, 42,000 miles, and $185 in cash. Is this an amazing miles redemption? Nope, not even close. But when we considered the fact that we had so many miles built up and we were getting the rest of this trip covered with our IHG Premier Card, we weren’t too worried about the airfare for this trip. Still, only paying $185 in cash is pretty dang good, I think. 

Many folks in the points and miles world advise to not book flights or hotels in booking portals because you are essentially booking through a third party. That means, if anything happens during your trip, you are stuck dealing with Capitol One customer service instead of directly with the airline or hotel. This can cause delays in resolving issues. In our case for this trip, I simply connected the flight booking to my American Airlines AA Advantage account in the American Airlines app by punching my last name and confirmation code into the app. We did end up having a delay for one of our flight legs, and I was able to do everything I needed to do to change flights, etc. right in the app, so no issues there. 

I would always recommend shopping around online before making a booking to compare the cost in any portal to the points/miles value of a potential airline partner transfer. It’s always worth doing a little extra research to make sure you’re getting the most bang for your buck. For example, it may appear to be a great deal if you transfer your points/miles, but the taxes and fees (which need to be paid in cash) could be quite high, and therefore the cash price is actually the better value. 

The Result: A Dream Vacation for (Almost) Free

By stacking credit card perks, points, and rewards, we enjoyed a luxurious vacation for a fraction of the cost. Our only out-of-pocket expenses were airport transfers and activities, as the resort stay and dining were free and our airfare just about fully covered.

This example showcases just how powerful credit card rewards can be when used strategically. If you’ve ever dreamed of traveling more without killing your budget, now is the time to start planning. Begin with one great travel card, take advantage of sign-up bonuses, and you could be booking your own free vacation sooner than you think.

Other things to keep in mind – 

If you are new to the points and miles game, these strategies take time. This is a long game. If you are looking to stack credit cards like the ones discussed here, it will take you probably 6-8 months to hit the minimum spend and SUB on both, assuming you meet one and then sign up for another (unless you have higher than average monthly expenses or a large purchase planned). If you already have a versatile card like the Capitol One Venture X like we did, then it may just take you a couple of months to meet the minimum spend on a branded card.

In summary – 

You can get started on booking a luxury vacation for next to nothing by: 

1. Choosing a travel credit card that aligns with your travel style and lifestyle.
2. Track your spending to meet sign-up bonus requirements without overspending. Put all your normal spend (bills, groceries, insurances, etc.) on that card for those first few months or offer to pay for dinners with friends if they simply pay you back.
3. Take a bit of time to understand and maximize the benefits and perks of any card you sign up for
4. Research how to maximize points through transfer partners or portals.

Happy travels!