How to Maximize Your Travel Rewards Points
Although I consider myself an avid traveler (18 countries and counting), there was a time when I paid little attention to my travel rewards credit cards. I assumed that as long as I shopped, I would earn points, but maximizing travel rewards is much more difficult.
You’re probably familiar with the basics of travel rewards: You fly to earn miles or open a credit card that earns points on purchases that you can later redeem for airline tickets or other perks. But even if you’re already earning points and miles, there are strategies you can use to earn rewards faster than just swiping your card for everyday purchases.
Let’s look at how travel rewards cards work and, more importantly, how you can maximize their benefits.
How Travel Rewards Credit Cards Work
At their core, all travel credit cards operate on a simple premise: They reward you for your spending with travel-related perks, from free flights to upgrades. Every time you make a purchase with a travel credit card, you earn points or miles. These rewards can then be redeemed for travel expenses, effectively reducing the cost of your trips or even making them free.
It is known that travel cards attract new customers with significant bonuses for registration. These can often be worth hundreds of dollars, increasing your rewards balance. The three main types of rewards are points , miles and cashback :
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Points: General rewards that can be redeemed for various travel expenses or transferred to affiliate programs.
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Miles: Often tied to specific airlines, but can sometimes be used more flexibly. Miles are usually exchanged for a discount or elimination of the cost of your flight.
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Cash back: Some cards offer cash back that can be applied to travel purchases.
Sign-up bonuses aren’t the only way to earn a significant amount of Travel Points: Lifehacker even has a guide on how to earn Travel Points without having to open a new card . (Although I’ll cover some of these methods below.)
Another thing to note is that as you earn rewards, most travel cards offer a tiered rewards structure:
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Higher rates (eg 3x or 5x points) on travel-related purchases.
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Moderate rates (eg 2x points) on common spending categories such as food or groceries.
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Base rate (usually 1 point) on all other purchases.
Understanding the value of your rewards will help you select redemption options that provide the most value.
Types of travel credit cards
Once you know you need a card for travel, you can choose between different types of travel cards.
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General Travel Cards: Offer flexible points that can be used at multiple airlines and hotels or redeemed for statement credits on travel purchases.
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Airline co-branded cards: Partner with specific airlines, offering miles for that carrier and often including perks like free checked bags or priority boarding.
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Hotel co-branded cards: Similar to airline cards, but geared toward hotel chains and often provide benefits such as elite status or free nights.
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Premium Travel Cards: High-end cards with luxury perks such as airport lounge access, travel credits and concierge services, usually accompanied by higher annual fees.
To choose a card, start by comparing the earning rates of different cards. Some offer a flat reward rate on all purchases, while others offer higher rates in certain categories. Choose a structure that maximizes your compensation based on your spending structure.
How co-branded travel rewards cards work
Co-branded cards are partnerships between credit card issuers and travel companies (usually airlines or hotels). They have a number of unique advantages:
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Earn miles or points directly from your partner’s loyalty program.
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Often provide elite status or a fast track to status.
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Include brand-specific travel benefits (e.g., free checked bags, room upgrades).
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May offer bonus points for spending with a co-brand partner.
However, these cards typically offer less flexibility than regular travel cards because rewards are tied to a specific program.
How to Get the Most Out of Travel Rewards Credit Cards
Now that we understand the basics, let’s look at strategies to get the most out of your travel credit cards:
Select the correct card(s)
Not all travel rewards cards are created equal. Before choosing one, evaluate your spending habits and travel goals, and consider cards that offer rewards points in the categories where you spend the most. Look for cards with benefits that suit your travel style, such as frequent flyer lounge access.
Make sure you meet the minimum spending requirements.
Many cards offer large sign-up bonuses if you spend a certain amount within the first few months. One of the easiest ways to do this is to plan large purchases around new card apps so you can easily meet those requirements (without spending more than you need to).
Maximize category bonuses
If you prefer travel rewards, save the pass for all purchases in high-value categories. If you don’t have any big purchases on the horizon, you can still spend smarter by purchasing certain items from merchants who are eligible for category bonuses (such as cleaning supplies at the grocery store). Consider using multiple cards to cover different bonus categories.
Stack up your rewards
If you have multiple credit cards that offer different rewards for certain categories (e.g. dining, travel, groceries, etc.), use the card that offers the highest rewards rate for a specific purchase. For example, if one card offers 4x points on dining and another offers 3x points on travel, use the appropriate card for each type of spending. You can also combine credit card rewards with store loyalty programs, online shopping portals or dining programs to earn extra money.
Leverage Transfer Partners
If you ask me, transferable points rule – they’re the most versatile currency in the points and miles world. Many regular travel cards allow you to transfer points to airline and hotel partners, which typically provides greater value than redeeming directly through the card portal.
Points typically provide more value when transferred to a travel partner’s program than when simply redeemed as credits or gift cards. For example, Chase Ultimate Rewards earns one cent per point in cash back, but can cost 1.5 cents or more per point when transferred to airlines. Make it a habit to keep an eye out for transfer bonuses to affiliate programs.
Time is huge here. Booking travel during off-peak times can mean greater reward availability.
Make purchases through online portals
To earn even more—2x to 5x points—beyond earning standard credit card rewards, try using the merchant portal to make purchases from participating retailers that you would have shopped directly with anyway. Some airlines also have their own shopping portals that are linked to your membership number to earn miles that go into your loyalty account.
If you have multiple loyalty programs through which you can earn points, consider using a tool like Cashback Monitor or adding Chrome extensions to multiple shopping portals to compare where you’ll get the most bang for your buck. Please note that during major trading holidays, bonuses may be even higher.
Understand your repayment value
Some programs offer experiential rewards of great value, while things like gift cards and merchandise typically offer low value. Typically, redeeming points for flights (especially business or first class) provides the best value for money. When staying at a hotel, look for hotels that offer a higher cash rate than the required number of points. Aim for at least one cent per point, but many redemptions can earn two cents or more.
Estimate annual fees
The card’s annual fee is an ongoing cost that you’ll need to weigh against the value of the benefits it provides (including the welcome bonus). Unless you’re working to maximize your travel benefits, the annual fee may not be worth it. In addition, the desire to justify the annual fee can lead to overspending on the card. You need to be honest, not ambitious, about your spending habits .
Take advantage of your benefits
Be sure to take advantage of benefits like travel insurance, purchase protection, or airport lounge access to maximize the value of your card. If you use enough of the card’s benefits, you can effectively offset the annual fees.
Redeem points early and often
As we said earlier , one rule of thumb is to only accumulate points for things you plan to use in the next year or so . Otherwise, you may lose their value. Again, here are even more ways to accumulate Travel Points .
Bottom line
Travel credit cards can be a powerful tool for turning everyday expenses into unforgettable travel experiences. Compare your options with various lists of top picks, like this one from Nerdwallet or this one from Bankrate .
Just make sure you use my tips above to earn enough points (and redeem them regularly ) to justify the card’s annual fee. Remember, the key is choosing cards that fit your lifestyle, using them strategically, and being thoughtful about how you redeem your hard-earned points.