If you’re new to the world of travel credit cards, you likely have a lot of questions: What is an annual fee? What perks will my card come with? What’s the best credit card? And most of all: How do travel credit cards even work?
The basic idea is that you will earn points in exchange for putting expenses on a card, and you will then be able to redeem those points for travel — plane tickets, hotel stays, even car rentals — paying just taxes and fees.
Today, we’re taking a closer look at how to use travel credit cards to your advantage.
What Are Travel Rewards Credit Cards?
Travel rewards credit cards are credit cards that earn points or miles on your purchases. Points and miles are a type of currency that can be redeemed for travel. The gist is that instead of using a debit card, cash or even a cash back credit card, you’ll earn points or miles on a purchase that you would be making anyway.
These cards either earn what’s called “transferable points,” meaning you can transfer them to hotel and airline partners, or are co-branded cards — essentially a collaboration between a credit card issuer and an airline or a hotel chain. The latter cards earn airline miles or hotel points specific to that brand.
For beginners, we recommend a card that earns transferable points — such as the Chase Sapphire Preferred® Card — versus a co-branded airline or hotel card. That way, you’ll have more flexibility around where you can use your points, instead of being tied down to a specific airline or hotel.
Travel credit cards have a wide range of annual fees, starting at $0 and ranging all the way up to $695. Typically, the higher the annual fee, the more perks and benefits that accompany the card.
It’s definitely possible to earn travel rewards with a no-annual fee credit card, and it’s important to not bite off more than you can chew at the beginning. Earning points and miles for travel is a marathon, not a sprint, so it’s more than OK to start off slow. Take it from us: You don’t need to have a high-annual fee card from the very beginning.
What’s most important is that you are not spending more than you can afford just to earn points or miles. Many travel rewards cards have high interest rates, which can essentially negate the value of any points or miles you earn with the card if you carry a balance. The key here is to pay your bills on time and in full every single month.
How Do You Earn Travel Points?
If you have a travel points-earning credit card, you’ll earn points (or miles, although most credit card issuers have points) on every purchase you make.
Major issuers, including American Express, Chase, Capital One and Citi, all have their own terminology for the points or miles you earn: American Express Membership Rewards points, Chase Ultimate Rewards points, Capital One Venture miles and Citi ThankYou points.
Many travel credit cards earn bonus points for various categories, such as travel, dining, groceries, gas, and more. Ultimately, it’s important to find the card that best matches your spending and lifestyle.
For example, the American Express® Gold Card earns 4 points per dollar on dining and purchases at U.S. supermarkets (up to $25,000 per calendar year, then 1 point per dollar), and 3 points per dollar on airfare booked on amextravel.com or directly with airlines. If you spend a good chunk of your budget on dining and/or groceries, this could definitely be a card worth looking into (See rates & fees).
We’ll get into more of our top travel rewards credit cards in just a minute.
How Do You Redeem Travel Points?
There are two ways to redeem your points for free travel: Either by transferring them to airline and hotel partners, or by redeeming them via your card issuer’s travel portal or statement credit function. Let’s take a closer look.
How to Redeem American Express Membership Rewards Points
Once you have a few thousand American Express Membership Rewards, you can choose to transfer them to partners or redeem them for hotel stays or free flights via the Amex Travel portal.
To redeem your Amex points via the portal, log into your account. From there, click “Rewards” and then “Book or Upgrade Travel.” This will direct you to the Amex Travel portal.
The portal is accessible for free to people who have an American Express card that comes with rewards for travel, such as The Platinum Card® from American Express, the American Express® Gold Card or The Business Platinum Card® from American Express.
Transferring your points to a transfer partner — either with American Express card or any other — is a somewhat more advanced strategy than redeeming through the portal. However, you will likely get more value out of your points this way.
Amex’s transfer partners include many U.S. and foreign partners, such as Delta Air Lines SkyMiles, Hawaiian Airlines Hawaiian Miles, JetBlue TrueBlue, British Airways Executive Club, Hilton Honors and Marriott Bonvoy.
Before you transfer your points, we recommend making sure there is award availability, or the chance to redeem your points and miles for a flight, on the exact dates for the flight or hotel stay you are trying to book. You can do so by going to the airline and hotel site and checking the option for booking with points or miles.
Once you transfer your American Express Membership Points to a partner, you cannot transfer them back. Most transfers to airlines or hotels are instantaneous.
Most of these transfer partners have a 1:1 ratio, meaning that for every 1 Amex point you transfer, you’ll get one point or mile in the program of your choosing. Some exceptions include JetBlue and Hilton Honors, so you’ll want to check first to calculate how many points you will need to transfer.
To transfer Amex Membership Rewards points, log into your account, click “Rewards” and then click “Transfer Points.” From there, you can select the partner you would like to transfer to. The site will tell you what the transfer ratio is before you proceed.
How to Redeem Chase Ultimate Rewards Points
Similarly to American Express, you can redeem your Chase Ultimate Rewards points via the Chase Travel portal or by transferring to partners.
To access the Chase Ultimate Rewards portal, log into your account and click “Travel” from the sidebar menu. It’s free to use and accessible to anyone with an Ultimate Rewards-earning credit card. This includes the Chase Sapphire Reserve®, Chase Sapphire Preferred® Chase Freedom FlexSM and Chase Freedom Unlimited®.
The Chase Sapphire Preferred Card’s sky-high 100,000 point bonus (after spending $4,000 in the first three months) just ended, but the card still remains one of the best deals in travel.
As mentioned, you can also transfer your points to one of Chase’s airline or hotel partners to get even more value.
All of these partners have a 1:1 transfer ratio, meaning that for every 1 Chase Ultimate Rewards point you transfer, you’ll get 1 point or mile in the transfer program of your choice.
To transfer Ultimate Rewards points, log into your account and click “Transfer to Travel Partners” from the sidebar menu. From there, you can select the program you would like to transfer to.
How to Redeem Capital One Venture Miles
Capital One has a few ways you can redeem your miles, including an “erase” feature that essentially lets you cover the price of any travel purchases via a statement credit.
You’ll typically get the most value redeeming your Capital One Miles by transferring to partners. Capital One’s notable partners include JetBlue TrueBlue, Wyndham Rewards and British Airways Executive Club.
You can also redeem your Capital One miles via the issuer’s portal, which functions similarly to Chase and Amex’s portals. To do so, sign into your account and then plug in your desired destination and dates.
Capital One’s most unique feature, though, is its statement credit option. Within your account, click “Redeem Travel Purchases” and you’ll be redirected to a screen with all of your eligible travel purchases within the last 90 days. From there, you can select the purchases you’d like to “erase” from your statement with your miles. You can use miles to cover all or part of a purchase.
How to Redeem Citi ThankYou Points
You can redeem Citi ThankYou points via the Citi ThankYou Travel Center, the issuer’s travel portal, or by transferring them to partners.
When redeeming points through the portal, you’ll get a fixed value of 1 cent per point. While this is typically the easier route, you’ll get more value out of your points by transferring them to partners.
Some of Citi’s transfer partners include JetBlue True Blue, Qatar Airways Privilege Club, Virgin Atlantic Flying Club and Air France-KLM Flying Blue.
To redeem your ThankYou points, log in to your account. From there, you can choose the redemption option you prefer. Note that you can also redeem your points for gift cards, statement credits and even shop with your points, but typically, those avenues provide a poor value for points.
What Kind of Travel Rewards Are the Best?
As with all travel rewards credit cards, there’s no such thing as the “best” credit card — only the best one for you, which suits your travel needs, lifestyle and budget.
That said, American Express Membership Rewards and Chase Ultimate Rewards are valued slightly higher than Capital One miles and Citi ThankYou Points according to The Points Guy (also owned by NextAdvisor’s parent company, Red Ventures), coming in at 2 cents per point versus 1.4 cents per point for Capital One miles and 1.7 for Citi points.
Ultimately, the travel rewards that are “best” are the ones that align closely with how you want to travel and save money in the process.
Best Travel Rewards Credit Cards
Now that we’ve got the fundamentals under our belt, let’s take a look at some of the best travel rewards credit cards on the market. No matter your budget, there’s likely something for you here.
Chase Sapphire Preferred® Card
The Chase Sapphire Preferred Card is a great travel card to have in your wallet, thanks to plenty of benefits and ongoing redemption value, for a relatively low annual fee of $95. It earns 5 points per dollar on travel purchased through Chase Ultimate Rewards, 3 points per dollar on dining and 2 points per dollar on other travel purchases. Also, this card is currently offering a generous sign-up bonus: 60,000 points after you spend $4,000 in your first three months of card opening.
American Express® Gold Card
The Amex Gold Card offers the best of both worlds when it comes to travel rewards. It earns 4x points at restaurants and at U.S. supermarkets (up to $25,000 in U.S. supermarket purchases per calendar year, then 1x), 3x points on flights booked directly with airlines or through Amextravel.com, and 1x points on other purchases. You can also earn 60,000 points after spending $4,000 on eligible purchases within the first six months of card membership.
Additionally, it comes with perks like $120 in dining credits (up to $10 per month) with eligible partners (including Shake Shack and Grubhub, among others), up to $100 in hotel credits for qualifying activities when you book through the Hotel Collection, and up to $120 in Uber Cash ($10 per month) toward U.S. UberEats orders or Uber rides. The Gold Card needs to be added to the Uber app to receive the Uber Cash benefit. The card carries a $250 annual fee. (See rates and fees.)
Capital One Venture Rewards Credit Card
With the Capital One Venture, you can rack up miles to put towards future travel thanks to all of your purchases — it earns 2 miles per dollar on everything. You’ll also earn 60,000 bonus miles if you spend $3,000 on purchases in the first three months. The card carries a $95 annual fee.
Perks include up to a $100 credit towards Global Entry/TSA PreCheck fee, and no foreign transaction fees.
Citi Premier® Card
The Citi Premier* offers a solid rewards rate across common categories that can help you save on both everyday and future travel spending. You can earn 80,000 points after you spend $4,000 in the first three months. The card also earns 3x points at restaurants, supermarkets, gas stations, air travel and hotels, and 1x points on all other purchases. It carries a $95 annual fee.
Chase Sapphire Preferred® Card
- Intro bonus:60,000 points
- Annual fee:$95
- Regular APR:15.99% – 22.99% Variable
- Recommended credit:670-850 (Good to Excellent)
- Apply Now At Chase’s secure site
American Express® Gold Card
*All information about the Capital One Venture Rewards Credit Card and Citi Premier has been collected independently by NextAdvisor and has not been reviewed by the issuer.
Terms apply to American Express benefits and offers. Enrollment may be required for some American Express benefits and offers. Visit americanexpress.com to learn more.