Travel can be exorbitantly expensive, but the right travel rewards card can help you save big on airfare, hotels, rental cars and more. With enough points and miles to spend on an upcoming vacation, you could even score all or part of your next trip for free, thus leaving you with more cash to spend on food and fun during your trip.
If you’re not sure where to start in your quest to earn travel rewards, it can help to have some basic information on how credit card rewards work and the different types of cards available today. Keep reading to get a handle on the basics and you could be on your way to earning free (or almost free) travel in no time.
How to earn rewards
For the most part, there are two ways to earn travel rewards — either by racking up points with a travel loyalty program when you fly or stay in specific hotels, or via a travel rewards credit card. However, it’s important to remember that you can often do both and “double dip” on rewards to boost your haul.
For example, you can earn points with the Southwest Rapid Rewards program each time you fly with the airline provided you join their free loyalty program. However, you can also earn travel rewards points if you pay for your airfare (and other purchases) with a co-branded Southwest Rapid Rewards credit card. The same is also true if, say, you stay at Marriott hotels and also have a Marriott Bonvoy credit card.
The interesting thing about travel rewards credit cards, however, is that they dole out travel points on all your purchases — and not just travel. For that reason, it can be smart to pick up a travel credit card and use it for ongoing expenses like groceries, gas and utility bills. Doing so can help you earn a lot more points over time which means more rewards for you to spend.
Choosing the right card
This leads us to the next important consideration you’ll face — which travel credit cards best suits your needs? If you fly often enough with a specific airline, you may find that a co-branded airline credit card will leave you better off. The same is true if you’re a road warrior who spends dozens of nights with a specific hotel brand each year and picks up a hotel credit card as a result. Just remember that, if you choose an airline or hotel credit card, your redemption options may be somewhat limited.
Also note that there are general travel rewards cards that aren’t tied to a specific loyalty program as well as cash-back credit cards that let you redeem points for anything you want, including travel. Considering there are so many types of travel credit cards, it helps to compare a few different options to see how they might work for the type of travel you want to book.
Consider flexible rewards programs
While airline and hotel credit cards mostly just let you redeem your points in their specific programs, note that some travel credit cards let you earn flexible points that can be used to book any type of travel. Some cards like the Chase Sapphire Reserve or the Platinum Card from American Express also let you transfer points to airline and hotel partners.
If you’re scared to commit to a specific hotel brand or airline and want some options when it comes to cashing in your rewards, cards that fall into this category can be a good choice.
Earn a big welcome bonus (or two)
One of the biggest benefits of travel rewards credit cards is that you can earn a big bonus right away. Many cards in this space will offer something like 50,000 points if you can spend $3,000 within three months, although these bonuses can vary and they may even change over time.
If you can use your credit card for regular bills and meet these minimum spending requirements with ease, you can position yourself to earn more rewards in the short-term and the long-term as you try new rewards credit cards.
Watch out for annual fees
Travel rewards can help you save big on nearly any type of travel expense, but there is often a catch. Some travel credit cards — and especially credit cards with the best travel rewards — charge annual fees that usually range from $95 to $550.
Paying an annual fee for a travel credit card can be well worth it, but it’s important to determine how valuable your rewards will be, how much you can earn in rewards each year and how often you’ll be able to take advantage of your cardholder benefits.
How to qualify for the best travel credit cards
Finally, don’t forget that travel rewards credit cards are typically only for consumers with credit scores that are considered “great” or “excellent” — typically any FICO score of 740 or above. You may qualify for a rewards card or travel credit card with a lower FICO score as well, but your odds aren’t quite as good.
If your credit score needs some work, it’s smart to spend some time improving it before you apply. Make sure all your bills are paid early or on time, for example, and keep debt levels low — preferably below 30% of your available credit limits. Also refrain from opening or closing too many new cards so that you don’t rack up unnecessary hard inquiries on your credit report or reduce the average age of your credit history.
If you focus on boosting your credit score until you’re in a range where you think you could qualify, you have a better shot at scoring the travel credit card you really want.
Personal finance writer
Holly Johnson is an award-winning personal finance writer who focuses on credit cards and credit, early retirement and travel. Johnson blogs at ClubThrifty.com and is also the co-author of Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love, which is available on Amazon.com.