Earning travel rewards with credit cards can help offset the cost of travel purchases and improve your overall travel experience. Knowing how they work and how to use them is the key to getting maximum value.
Here’s an in-depth look at the world of travel awards, including how to earn, redeem, and enjoy them.
What are travel rewards?
Travel rewards are benefits obtained by spending money on eligible purchases with a Travel credit card. Travel rewards come in the form of points or miles, and the more you spend on your travel card, the more rewards you will earn. You can redeem your travel rewards for things like hotel stays, airline tickets, and perks like access to airport lounges.
Travel credit cards are best for those who travel frequently for leisure or business, as the primary focus of earning and redeeming rewards is on travel.
How do points work?
With Travel Points, you collect a certain number of points for every dollar you spend on your Travel Card. The number of points you earn per dollar depends on the card and the purchase. For example, a card can earn 2x points per $ 1 on airfare or hotels, while it earns 1x points per $ 1 on all other eligible purchases.
Many point cards are co-branded Hotel credit cardsthat involve a partnership between a credit card issuer and a specific hotel chain. These cards typically receive a high rate of rewards for booking hotel stays. One example is this Marriott Bonvoy Brilliant ™ American Express® card, which earns you 6X Marriott Bonvoy points for every $ 1 at participating Marriott Bonvoy hotels. The card also earns 3x points in US restaurants and on flights booked directly with airlines, as well as 2x points for all other eligible purchases.
An example of an unbranded points card is the Bank of America® Travel Rewards credit cardwhich earns an unlimited amount of 1.5x points per US dollar spent on all purchases, including non-travel purchases.
How do miles work?
Miles are a type of travel award granted by. Tobe offered Airlines credit cards and some general purpose travel cards. Similar to point cards, a Travel miles card collects miles for every dollar spent on eligible purchases.
That Southwest Rapid Rewards® Plus credit card is a co-branded card that earns 2X points for every $ 1 on Southwest purchases and 1 point for every $ 1 on all other purchases. An example of an unbranded mileage card is the Discover it® Miles Mile. Earn unlimited miles for 1.5x for every dollar you spend on all purchases on the card.
How to Redeem Travel Rewards
Redeeming travel awards is usually a straightforward process as many exhibitors have online portals. Knowing exactly how to redeem your rewards will help you get the most out of your earnings.
The basics
Your card issuer usually has a portal on their website that lists redemption options and point values. Examples of redemption options include bank statements, travel purchases, gift cards, and cashback. Reward programs typically use a 1: 1 conversion rate, which means that each point or mile is worth $ 1. However, your rewards can increase or decrease in value depending on how you redeem them.
Wager points and miles to work
The type of card you have and the respective rewards program determine how you can redeem your rewards.
With some cards, you can redeem your rewards for settlement credits to offset the cost of past travel expenses. Other cards offer the ability to apply rewards to upcoming travel purchases such as flight or hotel bookings. For example, if you book airline tickets with miles, you can usually redeem them during the booking process. It is similar when applying points to a hotel booking.
Transfer points and miles
Some travel award cards allow you to transfer points or miles to the issuer’s travel partners, including airlines, hotels, or cruise lines. If you choose the transfer option, pay attention to the conversion rates. The value of rewards transferred to a travel partner may fluctuate.
If it looks like you’re going to lose value on a wire transfer, then it’s probably best to redeem those rewards for credit.
Do travel rewards expire?
Depending on the issuer and the specific card you own, your travel awards may be forfeited, especially if you have a branded airline or hotel card. With these special branded cards, the issuer usually has an expiry date for your miles or points.
With most rewards or travel cards, your points or miles are less likely to have an expiration date, as is the case with many issuers Non-expiry guidelines on rewards. However, it’s a good idea to be aware of potential expiration dates so that your hard-earned points and miles aren’t wasted.
How to Maximize Your Travel Rewards
Here are a few tips to help you get the most out of your travel rewards.
Take advantage of sign-up bonuses
Many tickets come with or with welcome offers Sign up bonuses. These bonuses usually require new cardholders to spend a certain amount within the first few months of opening the account. While these bonuses are often generous, make sure the spending requirements are realistic for your budget and travel plans.
Find out about all fees before applying
Credit card fees don’t directly affect the rewards you earn, but the cost does affect the total value of a card. Be aware of all of the fees associated with each card that you choose to purchase. Examples include:
- Annual fees, which typically range from less than $ 100 to more than $ 500 with travel cards. If a ticket has an annual fee, you should be sure that the rewards and benefits outweigh the costs.
- Some credit cards charge a foreign transaction fee for purchases abroad – usually an additional 3 percent on the total price. Although many credit card providers offer Cards without foreign transaction fees, should keep an eye out for frequent travelers abroad.
Make sure you have the correct card
With travel cards in particular, it is important that you have the right card for your preferences. For example, if you belong to a particular airline or hotel chain, a co-branded card can offer higher award rates, discounts, and perks.
Also pay attention to the award categories of a ticket. Earning points or miles at restaurants doesn’t offer many benefits to someone who rarely eats out.
Learn more: Best credit cards for travel insurance
