If you’re looking to maximize your travel savings, travel rewards credit cards are a great way to earn points you can redeem for airfares, hotels or other travel expenses.
What are rewards cards?
The idea is to use them for as many purchases as possible, and then pay off the balance from your regular account at the end of each month.
Certain categories of spending also earn you a higher ratio of points to dollars, and most cards offer huge sign-up bonuses for spending a minimum amount of money within the first few months.
Where are my points redeemable?
That all depends on the card: you can choose to use either affiliated airline-branded credit cards or general travel rewards credit cards.
An airline-branded credit card awards points or miles only redeemable with a specific loyalty program or airline/travel partners.
If you’re a frequent flyer on a specific airline, it would make sense to stick with an affiliated credit card, as you’ll get bonuses when you use it to purchase flights with any associated airlines. The Simple Dollar rated the following 6 as the best of 2016:
- Gold Delta SkyMiles Credit Card (American Express)
- Southwest Rapid Rewards Premier Credit Card
- The JetBlue Card
- British Airways Visa Signature Card
- United MileagePlus Explorer Card
- The Hawaiian Airlines World Elite MasterCard
As mentioned, most of these cards also offer boons for spending after sign-up.
The Delta SkyMiles card, for example, gives you 30,000 bonus miles if you can make $1,000 in purchases within the first 3 months. The usual $95 annual fee is also waived for the first year.
For those looking for a carrier within the EU, the British Airways Signature Card may be the best choice.
If you manage to spend $3,000 within your first three months of membership, you’ll collect 50,000 Avios (points for miles). For everyday purchases, you’ll get one Avios for every $1 spent; or three Avios for every $1 spent on British Airways purchases.
General rewards cards
If you’re a frequent flyer but you don’t always stick to the same carrier, a general non-affiliated rewards card may be more suitable.
These are more consistent in their reward points to spending ratio. Points are then converted to statement credits, which you can use with most airlines or loyalty programs.
The Chase Sapphire Preferred Card is frequently written up as the best non-affiliated card in terms of its flexibility and rewards scheme.
It earns 1 point for every dollar spent, double points on travel and dining at restaurants, and a point transfer of 1:1 to travel programs such as Virgin Atlantic Flying Club and Singapore Airlines KrisFlyer.
On top of this, points are worth 25% more if you use them to book travel through Chase Ultimate Rewards. As usual, this particular card also has an enticing sign-up bonus of 50,000 points after spending $4,000 within the first 3 months.
It’s important to note that most of these cards are high interest.
If you’re planning to use one for everyday purchases, make sure you can afford to pay the balance at the end of each month. The best way to ensure that you don’t fall behind on this and lose money to interest is to set up a direct debit payment from your regular account.