Travel rewards credit cards offer a variety of redemption options, and to maximize value from them it often requires making large purchases that trigger welcome offers like seat upgrades and free flights.
Many cards allow you to transfer points directly to airline and hotel loyalty programs for redemption purposes, giving you greater flexibility when redeeming. Other redemption options may include gift cards, statement credits or complimentary travel experiences.
Earning Points
With credit card points systems, you can earn rewards when making purchases in specific categories such as travel, dining and department stores with your card. Plus you could get even more through co-brand loyalty programs and bonus promotions! The value of those points or miles depends on their redemption; typically for airfare or hotel purchases via card issuer portals it amounts to around 1 cent per redemption!
Some cards allow you to earn reward points at a faster rate by spending on certain categories, like rideshare services. But keep in mind that credit card interest and late fees could reduce the value of these rewards.
Redeeming Points
Most travel credit cards allow cardholders to redeem points for airfare, hotel stays and other travel-related products through an online portal on the card issuer’s website. Redemption values will depend on what options are available as well as your individual spending patterns.
Many programs allow you to transfer points between airline and hotel loyalty partners, giving your points the best return possible. Bankrate’s point and mile valuations provide approximations of what each point or mile may be worth with these partners.
Some credit cards also allow users to redeem points for gift cards, statement credits and other items, but those options often offer lower value than using them toward travel. When selecting your card, be sure to consider all possible ways you can redeem rewards before making your choice.
Transferring Points
Some travel credit cards offer cardholders the flexibility of transferring points directly into airline and hotel loyalty programs, enabling them to redeem them for awards in their desired program. This may provide more value than traditional redemption methods like cash back, gift cards or statement credits.
To transfer credit card points, log onto your card issuer’s online portal and visit its rewards section. There, you should find a list of loyalty partners with their transfer rates; simply choose which program you would like your points transferred into and provide your loyalty membership number; this process may take several days.
Co-Branded Cards
Co-branded cards, issued jointly by a credit network or issuer and an individual company such as an airline, hotel or retailer, often include incentives designed to attract new customers. Rewards may only apply at their partnering establishment; or they could allow cardholders to earn and redeem points anywhere accepted by the credit network.
Co-brand programs that succeed are those with rich redemption options tied directly to the business offering the card, giving customers more ways to engage with it while leaving operational issues to its issuer. Unfortunately, poorly executed co-brand cards may undermine customer trust and weaken relationships; top performing card programs share three essential strategies: an engaging customer value proposition; optimized product & marketing executions; and an operating model with stakeholder alignment around key program objectives.
Miles-Earning Cards
Credit cards that offer sign-up bonuses of 100,000 points or more offer attractive sign-up bonuses, and many offer options for earning even more rewards through everyday spending. Finding the ideal card depends on your travel habits and whether or not you prefer sticking with one airline over accumulating transferable points.
Many co-branded airline credit cards provide rewards for travel purchases with each swipe of their card, though redemption rates will differ depending on which airline and how you book travel. Before selecting one of these cards, compare redemption rates before making your decision.
Utilizing travel rewards credit cards effectively means managing your balances effectively. Staying on top of rewards redemption and fees avoidance will maximize the value of your credits and maximize return.
