If you travel at least twice or three times annually, having a credit card that offers travel points could prove extremely valuable. Transferrable rewards often allow for expanded redemption options through airline alliances.
Co-branded airline and hotel credit cards typically confer elite status and privileges to those who own them, such as room upgrades and free meals. Some travel credit cards even offer fixed-value rewards that can be redeemed for cash rewards.
1. Loyalty Programs
Loyalty programs for travel brands – frequent flyer and hotel loyalty programs alike – have proven highly profitable. United Airlines sold $3.8 billion worth of miles during 2016 alone!1
Credit card points can be redeemed for travel and merchandise, with multiple redemption partners as opposed to co-branded airline cards that only earn rewards with specific airlines. While this provides greater flexibility for frequent travelers, it also requires more time and energy spent searching award availability and understanding redemption options.
Cards offering flat-rate rewards, or miles, can be ideal for travelers who don’t wish to deal with complex award charts and blackout dates. Airline-branded cards may also come with day-of-travel perks like free checked bags or lounge access – however these cards often carry high annual fees that make them impractical for casual travellers.
2. Transferable Points
Credit cards that offer travel points make it possible to transfer points you earn into other loyalty programs such as airline and hotel loyalty programs, giving you more flexibility in booking award travel when your preferred carrier/hotel brand is unavailable. Transferring is typically instantaneous through your card program website.
Transferring points directly to airline and hotel partners usually offers better value than redeeming via your card issuer’s travel portal, especially when redeeming for premium classes of travel such as international business class.
American Express, Chase and Citi cards with transferable points include those from American Express, Chase and Citi, which offer partnerships with several dozen airlines and hotels. Other cards that feature transferable points include ANA Avianca cards which have over 20 airline transfer partners; Marriott Bonvoy cards offer access to many hotel programs; it can be difficult keeping track of all these options but with some research you may find the one best suited for you!
3. Hotel Credit Cards
Hotel credit cards offer rewards points at a higher rate for hotel purchases compared to general travel credit card rewards. Some hotel cards co-brand with specific hotel chains while others are more general and offer various perks like free nights, airline miles and travel credits.
Before selecting a hotel credit card, it’s essential to take an honest assessment of your spending habits and loyalty program preferences. For frequent travelers looking for rewards programs with generous sign-up bonuses or added features like point earning boosts or quick paths to elite status status. Hotel cards may offer great options that meet these criteria if used wisely.
However, if you prefer other forms of accommodation than hotels, then a rewards card with no annual fee may be more suitable for you.
4. Fixed-Value Points
Many credit card issuers offer cards with fixed-value points that provide constant value when redeemed for travel expenses. Although less flexible than transferable or frequent flyer miles, fixed value points can often be easier for consumers to understand; with Expedia One Key Cash cards such as this example always worth $1 each!
These points can be used for domestic tickets that would be too costly with frequent flyer miles or transferable points; or mistake fares or taxes and fees that would cost more with frequent flyer miles or transferable points. Budget travelers or families on tight budgets who can’t afford aspirational first-class redemptions with other points and miles should find them particularly helpful.
These cards do not allow you to maximize your point or mile balance by booking aspirational trips with them, which makes assessing all options carefully when choosing a credit card for travel rewards essential. Many find transferable points are the optimal option.
