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Key Takeaways
- If you’re shopping for a new travel rewards card, compare any sign-up bonuses they offer and what you have to do to earn them.
- Some cards have special bonus categories that reward certain types of spending at a higher rate, while others pay a higher flat bonus on all categories.
- Plan to put your purchases on whichever card offers the best reward for that particular transaction.
- When the time comes to redeem rewards, try to use them in a way that will give you the most value for your points or miles.
- Your rewards will often go further if you use them for flights and hotels rather than gift cards or merchandise.
Travel can be a hassle, but using the right credit card (or cards) will at least make it more rewarding. With numerous travel rewards cards on the market and new ones coming along all the time, consumers face a dizzying array of choices. Here’s how to play your cards right and maximize your travel rewards.
Hit Your Sign-Up Bonus Strategically
Many issuers offer sign-up bonuses to attract new customers. Some cards deliver their bonus in cash back, while others pay off in points or miles. If you’re shopping for a new credit card with a good sign-up bonus, you’ll want to pay close attention to how much you have to spend—and within what time frame—in order to get it.
Travel cards with sign-up bonuses typically require that you spend a certain minimum dollar amount on the card within a limited period, such as three to six months. For example, the Delta SkyMiles Blue American Express card recently offered 10,000 bonus miles if the cardholder made $1,000 in eligible purchases within six months.
If you wouldn’t ordinarily spend that much money that quickly, it’s not worth overspending just to snag a bonus, especially if you expect to run a balance rather than paying your card off in full each month. (Many of these cards have interest rates exceeding 20%.) But if you have a major purchase or two coming up, applying for the card beforehand could make sense. Just be sure not to lose track of the spending deadline, so you don’t miss out.
Warning
Also, take note of any annual fees. Some cards have fees well into the hundreds of dollars.
Use the Right Card for the Right Purchase
Many cards reward spending in particular categories, such as travel, dining, gasoline purchases, or groceries, at a higher rate. In some cases, those categories can change periodically.
For example, the Chase Sapphire Preferred Visa card was recently offering 5x points per dollar on most travel purchases through Chase Travel, 2x points on other travel expenses, 3x points on dining and some food delivery services, and 1x points on everything else that’s eligible.
Other cards offer points at a flat rate, regardless of what you buy, often exceeding 1 point per dollar. The Bank of America Travel Rewards Visa card, for example, was recently providing 1.5x points on all purchases.
For many consumers, it makes sense to carry at least one card of each type and use whichever one offers the most points on any particular purchase.
Warning
Credit card issuers often reserve “the right to change their rewards program at any time, for any reason, and in many cases without notice,” according to the Consumer Financial Protection Bureau.
Redeem Points or Miles for Maximum Value
Points can vary in value from one rewards program to another. Even within the same program, they are likely to vary depending on how and where you use them.
Travel Portals
Many card issuers have online portals, much like travel agencies, and offer incentives for cardholders to book their trips through them. For example, Chase Ultimate Rewards points are generally worth 1 cent each. But by booking through the Chase travel portal, cardholders can get either 1.25x or 1.5x the value of their points, depending on the particular card.
Transfer Partners
While some travel credit cards limit you to a particular airline or hotel chain (or that brand plus a limited number of partners) in using your points, others allow their points to be transferred to the rewards programs of many different travel providers, typically on a 1:1 basis. This can give you added flexibility when you want to book your travel with points.
For example, Capital One, which offers several travel credit cards with varying rewards and fees, recently listed 15 airline and three hotel transfer partners on its website.
Avoid Low-Value Redemptions
Travel rewards points tend to be worth more when redeemed for actual travel and less valuable when you use them for things like gift cards, magazine subscriptions, and merchandise. For example, American Express Membership Rewards points are worth 1 cent each when booking flights through Amex Travel, but vary from about 0.7 cents to 1 cent when used for a gift card. You can also use them to pay your American Express credit card bill, but in that case, they’re worth just 0.6 cents.
Tip
Not all points or miles are worth the same amount of money. You can find estimates of their value online at some issuers’ websites and several independent websites.
Take Advantage of Cardholder Perks
Credit card issuers like to advertise a long list of perks that come with their cards. There are often strings attached, and no perk, however generous it seems, will be of any value to you if you never use it.
Among the most useful ones to consider in comparing card offers:
Some of these benefits can deliver real value even before you begin to redeem your points. For example, foreign transaction fees can add 1% to 3% to every purchase you make while traveling abroad, so a card that waives them can save you a considerable amount of money, especially if it has a low or no annual fee.
Stay Organized With Your Rewards
One secret to maximizing your rewards is simply keeping track of them. You can create a spreadsheet for that purpose or use any of several free apps that are now available. In particular, take note of their expiration dates so you don’t lose any points you’ve accumulated.
Also, keep an eye out for special offers from your card issuer, which may allow you to stretch your rewards when you redeem them. Some issuers will let you combine points from multiple credit cards if you have several accounts with them, such as a personal card and a business card. Chase allows cardholders to combine points with another member of their household.
What’s the Best Way To Earn Points Faster?
Put as many of your expenses as possible on that credit card (making sure, of course, to pay your bill in full each month). Take advantage of any bonus offers that make sense for you. If you have multiple cards, pay close attention to which ones offer the biggest rewards in a particular spending category and use your cards accordingly.
Is It Better To Use Points Through a Travel Portal or Transfer Them?
As a general rule, going through your card’s reward program travel portal will be more convenient, while transferring points to another program will give you a wider choice of travel providers and may provide a greater value per point. Bear in mind, however, that once you’ve transferred points, you can’t move them back to your original program, so you need to be pretty sure of your travel plans before acting.
How Do I Keep My Travel Points From Expiring?
First, keep an eye on the expiration dates for your points (this is a good argument for not loading up on too many different cards). Then find out what you have to do to keep them from expiring. That usually means earning or redeeming some points before the expiration date. Even if you aren’t planning any travels by then, you can often earn a few points by making a small purchase through their online shopping portal. American Airlines’ AAdvantage shopping portal, for example, offers miles for purchases at more than 1,200 different stores.
Note, too, that some programs’ points never expire under most circumstances. That includes Delta SkyMiles, JetBlue’s TrueBlue points, and United MileagePlus miles, among others.
The Bottom Line
Maximizing your travel rewards is a matter of choosing the right card or cards, knowing which card offers the best rewards in a particular spending category, and putting the right charges on the appropriate card—while also not going crazy and overspending just to earn rewards. Also, pay attention to the expiration dates (if any), so your hard-earned points don’t disappear before you have a chance to enjoy them.
