Travel credit cards provide points or miles that can be redeemed for flights, hotels and other travel purchases, often offering attractive initial rewards bonuses and 0% APR periods.
Airline, hotel and general travel credit cards offer differing points/miles value and redemption options, so NerdWallet can assist in finding the ideal card to suit your travel habits and spending goals.
Choosing the Right Card
As credit card companies compete to attract new customers, many offer tempting rewards points and perks to attract them – these incentives could include free lounge access or fee credits towards Global Entry/TSA PreCheck membership and other travel-related perks.
To determine the appropriate card for you and your travel habits, take into account where and how often you spend. A co-branded card could be ideal if you frequently fly or stay with certain airlines or hotel brands as these often allow faster access to elite status.
Consider which card offers rewards in terms of cash back or points/miles; cash-back cards tend to pay a flat percentage back for all spending while travel cards may offer higher multiplier multiples in specific categories; some cards even combine both rewards options.
Earning Points
Credit cards that earn travel points typically enable users to redeem rewards in the form of statement credits, gift cards, merchandise purchases or travel purchases – though your redemption options will depend on which card is chosen and their usage pattern. The value of rewards received from each credit card also varies.
General travel credit cards offer more flexible redemption options than co-branded airline credit cards, enabling cardholders to book award flights, hotels and car rentals through various travel-related partners. Furthermore, these general travel cards usually allow transfer points into loyalty programs of participating airlines for extra value-add opportunities.
Chase Sapphire Reserve and Capital One Venture Rewards credit cards both provide additional features that can increase the value of rewards earned. These benefits include complimentary lounge access and Global Entry fee credits; other cards like Discover it Miles offer unlimited 1.5X miles on all spending plus several beneficial cardholder perks.
Redeeming Points
Once you’ve amassed points or miles, the next step should be identifying how best to redeem them. Depending on your type of card and associated loyalty program, this could involve using them directly toward hotel and airline bookings, or even transferring them to one or more travel partners in your program.
Airlines and hotels tend to only allow their loyalty card members to redeem points through their respective loyalty programs, whereas general travel credit cards often give more options. One flexible type is transferable points which can be redeemed through various travel portals and gift cards or cash back. Citi’s ThankYou cards, for instance, allow transferable points between 18 airlines and three hotels – potentially making them even more valuable than loyalty program credits!
Value of Points
Credit card rewards points can quickly add up, saving on travel costs while opening doors to dream experiences such as free flights, seat upgrades and hotel nights.
Travel points differ from cash back in that their value may fluctuate based on which travel point program offers them and its redemption rate; as cardholder, it’s up to you to do the math and figure out how much each point or mile will be worth when redeeming in a particular scenario.
Airline and hotel travel points typically offer lower redemption values; savvy rewards users can maximize value with transferable point currencies from major card issuers like Citi, Chase, Amex and Capital One by unlocking premium rewards at exceptional values.
American Express’ Platinum Card(r) offers increased rewards on airfare and dining purchases while providing access to airport lounge networks at an unprecedented level, all at a steep annual fee that some may find hard to swallow.
