Doing the Disney Parks with Credit Card Points — A Primer
A Disney Vacation is Expensive! But We Can Help!
Let’s start with an important disclaimer: I am not a trained financial advisor. Anything you do with your money is your responsibility. Terms of specific credit cards change all the time, sometimes multiple clicks on a card’s website will reveal different perks and conditions each time and offers available to one person, may not be available to another. It’s a weird game. Consult a real financial advisor before you make any move with your money.
OK, that out of the way, let’s talk points!
Using credit card points to help defray the cost of a Disney vacation is tricky for a few reasons. First, it is usually impossible to book a Disney resort anywhere in the United States through anyone other than the Disney Company or a registered travel agent. This means that if your card has some sort of portal through which you can use whatever points you’ve accumulated, to book a hotel, the Disney properties won’t be on it. Likewise, it’s pretty difficult, if not impossible, to buy park tickets, or pay for dining in the parks using points. (There is an exception in Disney’s own card, but we’ll get to why you may not want to use that, later.)
The Disney financial ecosystem is a closed one.
So how do we get around all that?
Let’s go through some basic rules and gotchas about using credit card points but through the lens of taking a Disney vacation.
1. You must never, ever, carry a balance on your credit card.
This is absolutely the most important rule of credit card points and if you cannot adhere to it, stop right now and do not apply for that Visa!
At the end of the credit cycle, usually — but not always, check your terms — thirty days after the billing period in which your charge was made, you must have a balance of zero. Once you start carrying a balance and incurring interest, you have blown all the advantages you received from using the points and are likely headed into trouble.
Tattoo this on your forehead: Never carry a balance!
2. The biggest benefit that you will get from using a credit card is the sign-up bonus.
This can be anywhere from a hundred dollars in points to nearly a thousand. It is almost always tied to your spending a certain amount over a specified period. For example, I had a card that gave me 90,000 points (about $900 worth of points) if I spent $4000 in three months. Pretty sweet payout, right? But remember rule 1! If you send $4000 in three months can you pay it all back? If not, don’t do it.
You will hear a term amongst people who use points, “churn.” That means that you are constantly cycling cards to get that new subscriber bonus. Most companies assume that you are a new user approximately two years after the last card you got from them; so with some careful scheduling, you can constantly be churning. For example, if I get a Capital One card in January of 2023, and then a Chase card in January of 2024, I could, about a year later, get another new user bonus for another Capital One card by signing up in 2026.
Now if this bonus is a credit on your credit card statement, golden! I don’t think much of the Disney Visa as its points payoff is so poor (more on that soon), but some versions of it have a $400 cash credit added to your statement when you sign up and purchase $1000 on the card. I bought a Disneyland Magic Key for $1200, immediately got the bonus, and ended up only paying $800.
Cash bonuses tend to be more rare than points bonuses, though.
Points spending coming up soon!
3. With bonuses come annual fees which you will have to pay at least twice, and that might be ok.
Almost all cards with a significant sign-up bonus will also have an annual fee attached, and it can be hefty. Don’t expect that you’ll outwit them by getting your bonus and then canceling the card right away. The terms almost always include a requirement to hold it for at least a year, which will mean a second annual fee.
Don’t be too quick to dismiss cards with high annual fees, though. My most expensive fee is $395 per year, which seems jaw-dropping until you see that the card offers you a yearly $300 travel credit usable on a ton of stuff including airfare, gas, hotel room… anything that is coded on your credit card statement as “travel.” It also comes with free TSA Precheck subscription, airport lounge perks, etc. It’s worth well over $395, annually (keeping in mind rule #1).
4. Each card has a category of spending that maximizes the accumulation of points.
Most cards give you something like a point per dollar spent. This is not much. Many cards, though, will have a category where you can accumulate many times that. Some cards will give you ten times the points on groceries or restaurant purchases. Some cards will give you huge multipliers on travel purchases.
Be careful, though; sometimes the multiplier is only maxed out when making the purchases — particularly with travel — through the credit card portal, and, often, those rates will be higher than if you purchased the hotel room or flight directly. (Not always, though. I’ve occasionally found Capital One’s portal to be cheaper than booking directly. Always do comparisons.)
When you’re thinking about cards to sign up for, understand where their sweet spot is for accumulating points and decide if that’s something you will use the card as payment for.
Sadly, the Disney Visa stays around the 2X points range even for Disney purchases. Remember that $1200 Magic Key? I earned about $20 in points. It may be tempting to think that this would be the card that would help you the most with a Disney vacation, but it’s really not.
5. When redeeming points, watch out for the point-to-dollar conversion rate.
Credit card companies get a lot of mileage out of the idea that a point equals a dollar, but it rarely actually does.
You can usually redeem points in three ways:
1) By purchasing something directly through the company’s portal (again, as before, compared to buying that thing directly instead); 2) By using points to apply a credit to your statement for something purchased; and 3) By converting your credit card points to rewards points for a different company.
Let’s see how each of these can help with your Disney trip.
For the first situation, it’s pretty obvious, you’ll go to your credit card company’s travel portal and book a flight or hotel. You won’t be able to book any Disney-owned properties that way, but in Anaheim that doesn’t matter so much; given all the non-Disney hotels with walkable access to the parks.
For number two, applying points as a statement credit — this involves some explanation but can be really effective.
Usually the company will pick a category and say, “Anything coded as that category can be given the credit.” The most obvious example, and the one I use, is travel. Travel is different than entertainment; so many of the things at the Disneyland Resort won’t be covered because they’re not coded as something my card will credit.
Walt Disney World is a little different, and more complicated, though. If you book a package through a travel agent or directly through Disney Travel, and you use a Magic Band at the parks to charge your purchases back to your hotel room, a number of them may end up coded as travel and can thus receive a statement credit.
I know this is weird, but I’ve experienced it myself. It’s inconsistent, but you will likely be able to cover a number of expensive meals at the parks that way.
Also, purchases such as Uber rides, gas, and a surprising number of small items will pop up as travel and can get a credit.
The third method is probably the trickiest but can be the most lucrative.
Most credit card companies who offer points rewards will have agreements with partners whereby your card’s points can be exchanged for credit with another company’s reward program. For example, I recently exchanged Amex points for JetBlue points which I then used to book a flight.
The conversion rate is key and it can be a bit of a hair-pulling exercise to try and determine what the point-for-point exchange rate is, as well as what the other company’s points are worth, dollar-wise. But you can get great deals if you’re careful: trading your points for multiples of those points at another company given a special deal.
But you can also get skunked.
For example, two properties at the Walt Disney World Resort CAN be booked with points, The Swan and Dolphin Hotels which are run by Marriott, not Disney. These can be booked using Marriott Bonvoy points which can be acquired by converting your credit card points to them. However, the conversion rate is terrible. It can be as low as 50% fewer points than you started with and, even then, the Bonvoy points themselves are worth less.
To say it with more math, (These are all made-up figures to make the math easy, this changes all the time.) let’s say that you get .5 Bonvoy points for every 1 Amex point. It sounds like if you have 1000 Amex points that are worth, roughly, a dollar per point, that you will be exchanging them for $500 in value. That makes intuitive sense, but it might be worse than that because the Bonvoy points themselves are worth less than a dollar each. So if the Bonvoy points are worth more like $0.60 each, you’ve traded something like $1000 for something like $300.
It’s still a free or discounted hotel stay, so nothing to shake a stick at, but if you can use the points elsewhere, you probably should. For a time you could trade an Amex point for 1.5 Virgin Airline points. Deals like that can really pay off if you are willing to do the homework.
To sum up: Disney’s closed financial ecosystem makes it difficult to use credit card points to pay for the Disney piece of the vacation, but much that surrounds it can be paid for with travel-based credit card rewards. Plane flights, some hotels, ground transportation, and a whole lot more can be covered. Look for those good sign-up bonuses and ways to multiply your points accumulation. Watch out for redemption deals that devalue your points. If you’re at the Disney World Resort in Florida, remember to use your Magic Band to pay for things so they’ll get coded as travel. Never carry a balance! And, most of all, ABC.
Always be churning!
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Kelly McCubbin is a columnist for Boardwalk Times