How to start traveling with points, miles and credit cards
Key takeaways
- There are various types of travel rewards available, including airline miles and points, hotel points, and credit card points.
- To start earning points and miles, you can utilize credit cards, book travel, and take advantage of shopping portals.
- When choosing a travel credit card, consider factors like sign-up bonuses, earning potential and travel perks.
If your friends and colleagues are always taking vacations with credit card points and miles, you may be wondering how you can get in the game. Fortunately, getting started with travel rewards is easy to do if you have good credit and you’re willing to do some minimal research and planning. Sure, there are ways to truly elevate your game and become a top-tier expert, but no one starts there and that’s OK.
The most important step in the process is figuring out which travel credit card to sign up for. From there, you can start earning points and miles right away and dipping your toes in redemptions as well.
But, what are the types of rewards you can choose from? And what’s the best way to use your credit card rewards? In this guide, we’ll help you figure out which steps to take first so you can get started with earning and using travel points and miles.
Points, miles and credit card statistics
- 36 percent of consumers polled said cash back was their favorite credit card feature, whereas 7 percent of respondents said travel rewards were their favorite credit card feature (Bankrate).
- 4 percent of consumers surveyed said that travel perks like free checked bags and airport lounge access were their favorite card features (Bankrate).
What are points and miles?
Before you can begin using travel rewards for flights, hotels and other types of travel, it helps to know the difference between points and miles. You should also know that each rewards currency has its own average redemption value depending on the airline, hotel or credit card rewards program.
Here’s an overview of the types of travel rewards available.
Quick definitions
- Airline miles and points
- Airline rewards come in the form of miles or points, and they’re offered through co-branded airline credit cards that are affiliated with a particular airline loyalty program. They are accrued through flying with that airline, credit card spending and other qualifying activity. All airline loyalty programs let you redeem airline miles or points for award flights within their networks, but some offer additional redemption options like upgrades to a premium cabin and other types of travel (for example, hotel or rental car bookings).
- Hotel points
- Hotel points are offered through co-branded hotel credit cards that are affiliated with a particular hotel loyalty program, but you can also earn these points by booking paid stays with hotels within a brand or completing other qualifying activity. All hotel points can be redeemed for free (or discounted) award nights within a hotel loyalty program, yet some hotel points have additional redemption options like gift cards or magazine subscriptions.
- Credit card points and miles
- Credit card points (or miles) are the type of rewards that fall within a credit card issuer’s rewards program. Some examples include Chase Ultimate Rewards points, Capital One miles and American Express Membership Rewards points. This type of rewards currency is often considered the most valuable since you can use your rewards for redemptions like statement credits, gift cards, travel through the issuer’s travel portal or transfers to a brand’s airline and hotel partners.
Key tips before you start earning points and miles
There are several key credit card rules to follow, as well as mistakes to avoid, when you first open a rewards credit card. Consider the following advice before you dive into the world of points and miles for travel.
- Pay off your card in full each month. The average credit card interest rate is currently over 20 percent. With that in mind, you won’t “get ahead” with rewards if you carry a balance and pay interest over time.
- Keep an eye on your credit score. You can use credit cards to improve your credit score if you always pay your bill on time and you consistently keep debt levels in check. Most experts recommend keeping your credit utilization ratio below 30 percent for the best results.
- Be realistic about your points and miles goals. Make sure you look for a credit card and a rewards program that aligns with your current spending and travel habits, along with your travel goals. For instance, if you don’t have a preferred airline or hotel, then a general travel credit card that offers transferable rewards and rewards that don’t expire may help you to better reach your travel goals than an airline or hotel co-branded card.
- Limit how many cards you apply for at once. Don’t go overboard and apply for every travel rewards credit card that catches your eye. If you do,you will likely see damage to your credit score due to too many hard inquiries on your credit reports.
- Pursue sign-up bonuses with care. Most travel rewards credit cards offer a sign-up bonus when you meet a minimum spending requirement within a specified time frame of opening your account. While these bonuses can be helpful, you should only pursue them if you can meet the spending threshold with regular, planned purchases and bills.
How to start earning points and miles
To start earning rewards, consider one or all of the following strategies.
Utilize credit cards
While you can earn travel rewards by staying in specific hotels or flying with an airline, travel rewards credit cards offer the best value and most flexible travel rewards currency; plus, they are the fastest path to building a travel rewards bank. That’s because travel credit cards let you earn points or miles for each dollar you spend. This means you can earn travel rewards on everything from your grocery bills to utility payments, gas for your car and more.
Most top travel credit cards also let you earn a big welcome offer in the first few months if you meet a minimum spending requirement and other terms. These welcome offers are typically worth anywhere from several hundred dollars to over $1,000 in travel, and they can provide a great way to reach your initial travel goals quickly. These sign-up bonuses are definitely worth pursuing — as long as you’re mindful about not overspending to earn them — so make sure to factor these offers in as you select a card.
Book travel
To start earning points and miles, you’ll want to sign up for all the airline and hotel loyalty programs for brands you normally use. Fortunately, travel loyalty programs are free to join and signing up only takes a few minutes online. This means signing up for the Delta SkyMiles program if you frequently fly with Delta, just as you would sign up for the Hilton Honors program if you’re always staying in Hilton hotels.
Once you sign up, you can start earning rewards with your preferred loyalty programs for travel you’re already doing. Then, once you earn enough points or miles, you can unlock different tiers of elite status, which come with even more perks with your favorite brands.
Take advantage of shopping portals
To earn even more travel points and miles over time, you can take advantage of loyalty programs’ shopping portals. Airline and hotel loyalty programs typically offer shopping portals, while credit card issuers typically offer bonus rewards on eligible shopping with partner merchants. For example, there’s the American AAdvantage eShopping portal the Southwest Rapid Rewards Shopping portal, and Chase offers Shop Through Chase, to name a few.
With shopping portals, you can earn extra points or miles by logging in to your account and clicking through a participating retailer’s offer before you make a purchase. While bonus offers vary, you can typically earn an extra 1X to 5X points or miles for each dollar you spend.
Don’t skimp on dining programs
A number of hotel and airline loyalty programs also offer dining portals that allow you to earn extra rewards. These programs include Southwest Rapid Rewards Dining, American Airlines AAdvantage Dining and Hilton Honors Dining.
How to choose a travel credit card
Before you choose a new credit card, do your homework so you have an understanding of which cards you’re likely to qualify for.
- Know your credit score. Most travel rewards cards require good or excellent credit for approval.
- Understand issuer-specific approval rules. Chase famously follows the 5/24 rule, which states you won’t be approved for a Chase card if you’ve opened five or more cards with any issuer in the past 24 months.
- Consider using Bankrate’s CardMatch tool to avoid an unnecessary hard credit inquiry.
Once you have a good idea of where you stand, it’s time to determine which specific card to apply for. Consider the following:
- Pick a card that offers the types of rewards you want. First off, you’ll want to choose a travel card that offers the type of rewards you want to earn. This could mean choosing a hotel credit card to earn hotel points, picking up an airline credit card to earn miles with your favorite airline or opting for a flexible travel credit card that lets you redeem rewards in more than one way.
- Decide if you want specific travel benefits. Some travel credit cards offer perks like free checked bags with an airline, airport lounge access, travel credits, automatic elite status or various travel insurance protections. Make sure the cards you’re considering offer the features you can benefit from the most.
- Weigh annual fees. Travel credit cards with the most perks always charge annual fees. While paying an annual fee may not seem ideal, this fee can be worth it if you take advantage of enough rewards and benefits to make up for its cost.
- Consider rewards rates. Finally, make sure any travel credit cards you’re interested in offer points or miles in categories you tend to spend money in. This can mean looking for rewards cards that offer higher rewards rates in bonus categories like groceries, gas, travel purchases and more. Or, if you don’t want to keep track of bonus categories, you may want to consider a travel card with a flat rewards rate for all purchases.
How to redeem points and miles
Ultimately, how you’ll use credit card points and miles depends on the travel credit card you sign up for and which rewards currency you earn. Here’s a rundown of the main ways to redeem your rewards:
- Redeem credit card points/miles for travel. Remember that credit card points and miles are offered through flexible issuer rewards programs that let you redeem your rewards in more than one way. Once you have a stash of credit card rewards, you can redeem them for travel through the card issuer’s travel portal or transfer your points/miles to the issuer’s airline and hotel partners. For example, you can use American Express Membership Rewards points to book travel through American Express Travel, or transfer your points to Amex partners like Delta SkyMiles and Hilton Honors.
- Redeem miles/points for flights. Miles and points accrued with an airline credit card can be used for flights with the airline itself and often for flights with alliance partners. Some frequent flyer programs also let you redeem airline rewards for seat upgrades to a premium cabin, airport lounge membership and other options.
- Redeem points for hotels. Hotel loyalty points can be redeemed for award nights with the hotel brand, and many programs let you redeem points for suite upgrades and other on-site benefits. Some hotel loyalty programs offer a range of alternative redemptions as well. For example, the World of Hyatt program lets you redeem points for FIND experiences like day trips, private cooking classes and adventure activities.
The bottom line
Taking the leap into the world of travel rewards can be intimidating when you read about complicated redemptions and multi-card strategies. But it doesn’t have to be. Get started with a single card or loyalty program that fits well into your lifestyle, budget and travel goals. You can always expand your plan and add complexity as you get more comfortable with using your rewards.
The key is to understand your own credit history as well as the plans you have for your travel rewards strategy. Saving even a small amount on your next vacation because of your smart use of travel rewards should motivate you to keep learning.
Frequently asked questions (FAQs)
