There are so many different credit cards on the market, it can be hard to decide which one to apply for. If you like to travel and are always daydreaming about your next trip, you may want to consider a travel credit card. These cards can offer travel-related benefits, such as enhanced hotel or airline status, free upgrades, or no charge for baggage. Travel credit cards also earn rewards that you can use to offset the cost of travel.
However, deciding what type of card to get and using your credit cards rewards for travel can be complicated. The same holds true for learning how to maximize your rewards once you do settle on which plastic you want.
Here, some guidance to help you maximize your credit card rewards for travel, including:
• How to find the best credit card for travel rewards
• How to use rewards for travel
• How to get the most out of your travel credit card
Types of Credit Card Rewards for Travel
Credit card rewards come in several types. When it comes to using rewards for travel, consider these options to find what best suits your needs:
• Airline points and miles cards: With these credit cards, you typically earn miles or points on purchases made with the card. These can be redeemed with the particular airline’s rewards programs. Examples of airline credit cards include the Citi AAdvantage Mastercard and United Explorer Card.
• Hotel credit cards: With this kind of travel credit card, you typically rack up points that can be used for rewards (such as upgrades or free nights) at a particular hotel chain. For instance, the Marriott Bonvoy Boundless Credit Card, Hilton Honors American Express Card, and IHG Rewards Premier Credit Card are all examples of these co-branded cards.
• Flexible currency cards: With these cards, you are not locked into a single airline or hotel chain. The points/miles and rewards you earn can be transferred to different programs, via Ultimate Rewards, ThankYou Points, and Membership Rewards.
You might use a conventional rewards credit card that earns cash back and lets you redeem your rewards for cash in the form of a statement credit, bank transfer, or check. You can then apply this toward travel-related expenses. The best rewards credit card for travel will be the one that suits your needs and spending style; the idea is to get one and use it frequently.
Credit cards that earn points typically let you redeem those points for things like travel, cash back, gift cards, and merchandise. The value of points will vary, but generally, a point is worth about $0.01. However, you may get better value when you redeem points for things like travel.
There are many factors to consider when deciding between credit card miles vs. cash back vs. points cards. Cash-back cards often have low or no annual fees, and you can redeem your cash back for any purpose. However, they don’t usually have high-value welcome offers and may not offer as many benefits as other rewards cards. Credit cards that earn points or miles offer travel-related benefits and can help reduce the cost of travel, but they may charge large annual fees, and the value of the points and miles may vary.
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5 Steps for Using Rewards for Travel
Here are five easy steps for using your rewards for travel.
1. Set a Travel Goal
First, set a travel goal. Decide where you want to go and when. If you are flexible on dates, you can save money or points. For example, flying a few weeks before Christmas instead of a few days before can save you a lot of money.
Is there a certain hotel or resort you dream of staying in? Do a little research to see what their rates are like. You might see that your target dates are at a time of high demand and cost due to a special event at that moment. You can then move your date a bit to avoid those extra-high prices. Or perhaps you are looking for just a two-night stay at a hotel near Lake Como, Italy, but all the lodging there has three-night minimums in summer. This kind of intel can be very useful as you plan.
Also, once you determine your goal, you can begin to develop a travel budget and start a travel fund to keep your money secure as you save and earn some interest.
2. Figure Out the Miles and Points You Need
Once you know where you want to go and when, you should see which miles and/or points you will need to get there. Scope out which airlines fly to your destination from your home airport (or another nearby), and which airlines they might partner with.
As you research routes that you might take, get a rough idea of how many miles or points the flights might cost. Be aware of blackout dates and other special considerations.
3. Research Airline and Hotel Loyalty Programs
Most hotels and airlines have loyalty programs in which you earn and redeem points and miles with that hotel or airline. Every hotel and airline has its own point system, though some have networks of partners, in which rewards can be used at multiple brands.
Airline partners within the same airline alliance allow you to redeem miles on flights operated by their partners. For example, Star Alliance includes airlines such as Air Canada, TAP Portugal, United Airlines, and many more. If you are looking at a flight, you may want to look up potential partners, as it is sometimes cheaper to book that flight with miles from a different partner.
4. Shop for Credit Cards That Will Help You Meet Your Goal
Once you know which airlines and hotels will work best for your travel goal, you can figure out which credit card rewards can help you reach that travel goal.
Credit cards with rewards can be an example of how families afford to travel. You can earn points and miles every time you swipe or tap and then redeem them for travel expenses, like flights and hotels.
You may want to apply for a credit card with the specific airline or hotel, or one that offers points that are transferable to airline and hotel partners (like Chase Ultimate Rewards or American Express Membership Rewards). Be sure to research which airlines and hotels these rewards programs partner with. You should also compare things like annual fees, welcome offers, earning structures, and benefits like travel insurance. Make sure you understand how credit card travel insurance work; that can be an important perk.
5. Track Your Progress
Once you have signed up for the credit card(s) that will help you meet your travel goal, there are a few things that you will need to track. If your credit card has a welcome bonus after spending a certain amount, you will need to track your progress toward that minimum amount. Some banks track this for you in your account, but others do not. Some other things that you may want to consider tracking include:
• Spending requirements
• Spending goals
• Deadlines
• Bonus reward categories
• Points expiration dates
• Hotel points to help save on hotel costs
• Frequent flier miles
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Tips for Maximizing Your Cards
Maximizing your cards is important to get the most rewards that you can. Follow this advice to help squeeze every last drop of value from your cards.
Label Your Cards
If you have multiple credit cards, it can be difficult to remember which one to use for which purchase. You may have one card that earns more on dining, another that earns more on gas, and a third that earns more on groceries. Some credit cards have rotating bonus categories that change throughout the year and may offer a short-term bonus earning opportunity, like extra points on gas purchases for the next few weeks.
If you have trouble remembering which card to use for which purchase, you can try using stickers or tape on the card with words like “gas” or “dining.” This can help you find the right card at the right moment. This strategy can also offer some helpful guidance if you have a partner who is not as invested in maximizing their cards as you are.
Time Large Purchases Strategically
If you know that you will have a large or several large purchases coming up in the near future, you may want to plan your credit card strategy around them. You might apply for a new credit card with a welcome offer shortly before making the large purchase. Some credit cards have welcome offers that require you to spend a certain amount during the first few months. If you would not otherwise spend that amount of money, timing it around the large purchase could help you meet this minimum spend and earn a hefty bonus (say, extra points).
Utilize Shopping and Dining Portals
Shopping and dining portals can give you extra miles, points, or money when you complete an eligible purchase. This involves going through a certain platform when making a purchase so that you can earn extra cash back, points, or miles. In this way, you can stack these portal rewards with other rewards, like the ones that you are earning on purchases on your credit card.
• Portals can be through an airline, credit card, or independent cash-back company. Some popular airline portals include American Airlines’ AAdvantage eShopping and AAdvantage Dining, Southwest Airlines’ Rapid Rewards Shopping and Rapid Rewards Dining, and Delta Air Lines’ SkyMiles Shopping and SkyMiles Dining, among others.
• Credit card companies that offer their own online shopping portals include Chase, Capital One, and Barclays. Popular cash-back portals include Rakuten, Mr. Rebates, and Top Cashback.
• To use a shopping or dining portal, you would sign up for an account with the specific portal program. When you are ready to make a purchase at a retailer, you can go to the portal program’s website first, and click through there to the retailer to complete your purchase. You could also download a browser button for the program, and then click on the button before you complete your purchase.
• If you want to compare which portal will give you the best return for a retailer, CashbackMonitor.com lets you search by stores or rewards types.
Try Apps
If you find yourself with points and miles in a variety of reward systems (like various airlines, hotels, and credit card companies), you may have a hard time keeping track of it all. Apps, like Travel Freely and MaxRewards, can help you organize your credit cards, rewards, points, and miles. Apps can help you easily see which credit card to use for which purchase, how many rewards you have in various systems, view upcoming annual fees, and more.
The Takeaway
Credit card rewards can help make travel more affordable. Once you have figured out which credit card can enable you to reach your travel goals, learning how to maximize your cards will likely boost the rewards you reap. By labeling your cards, timing large purchases, utilizing shopping and dining portals, and using apps, you may get closer to your dream vacation that much more quickly.
Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
Photo credit: iStock/martin-dm
Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.
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