Credit Cards With Travel Rewards: How They Work


Dreaming of white sandy beaches and toes in the sand? Or maybe your dreams include wandering the streets of Paris or swishing down a snow-covered mountain. Whatever that vacation dream entails, the wanderlust is real.

The trick is how to pay for such lovely adventures. Do you have a vacation fund? A jar you used to collect loose change?

Do you have credit cards with travel rewards that help you to accumulate rewards towards your next vacation escape?

A quick internet search on vacation destinations and you’ll find countless opportunities to join rewards programs, get miles, earn points? Have you ever wondered if it pays off to collect bonus miles if the earned points ever actually get you something worthwhile?

Let’s take a closer look at earning miles, points, and rewards through credit cards. Are they worth it? Will they get you to that dream vacation? Read on to learn all about travel rewards programs and how they work.

Choosing a Credit Card for Earning

With so many credit cards with travel rewards, how do you know which one to choose? How do you know which will give you the most bang for your buck?

It depends on you, your spending and your travel habits.

Some credit cards earn you points, while others earn you miles. Research what it will cost you to use the card and what you get in return from the card.

Some cards allow you to use their rewards on only their brand. For example, the Delta SkyMiles card is one of the better for what you earn from it. You can earn points from the card both from flying on Delta and using the card for other purchases.

The downside to this card is that you can only redeem those rewards by flying on Delta Airlines. So, if you are a frequent Delta traveler, it makes sense to take advantage of the rewards that come from this card.

Other cards like the Chase Sapphire Preferred card offer some real incentives towards travel that allow you to use the rewards towards any type of travel or travel brand. A card like this one even offers greater rewards when cashing in the earned points towards travel.

These two scenarios are different because one is specific to a brand and one is not.

Hotels often offer rewards credit cards and points in a similar fashion.

If you have brand preferences when you travel or travel frequently where you can regularly stay at one type of hotel or fly on a certain airline, it makes sense to use their rewards credit cards as it’s likely you’ll wrack up the points pretty quickly.

Miles and Points

Credit cards vary in how they offer rewards. Like entering into any credit card agreement, it’s important to read the fine print on what the card will offer in return for your spending.

Some credit cards allow you to earn points. You get points based on your purchase amounts. In some cases, you can get more points for purchases on certain things like using the card at a restaurant or a grocery store.

Other credit cards will earn you miles towards travel. In the scenario, the more bonus miles you accumulate, the more you can cash those miles in towards rewards.

Credit cards like the Bank of America Travel Card offer points towards every purchase. These points can be redeemed towards travel with no blackout limitations.

Again, do the research on how a card offers rewards, points or miles, and consider whether it offers you rewards that make it worth it for you. In most cases, the term points and miles can be used synonymously. You can earn a point or a mile for each dollar you spend.

Credit Card Points Vs Airline Frequent Flyer Miles

This is a distinction to note in the credit card rewards world. Consider these questions as it relates to rewards:

  • Does the credit card give points for all purchases?
  • Does the credit card give miles for travel purchases?
  • Can the points or miles be redeemed for anything or for travel?

Often with credit cards as it relates to travel the term points and miles mean the same thing. General credit cards that offer rewards programs in points or miles will allow you to trade those back in towards travel rewards.

Specific credit cards, like the Delta SkyMiles previously mentioned, give rewards that can only be used on their brand. Sometimes cards give points that you can then trade in for miles on air travel.

When booking a flight, you can use those frequent flyer miles or points, cash them in towards discounts or even free travel. Generally speaking, the more general credit card allows you the freedom to use the points for any number of travel options. While a specific frequent flyer program through an airline is likely to be more restrictive.

Either way, when buying that ticket for your next warm-weather vacation, make sure you get some kind of rewards credit from the purchase by using a card that offers rewards in return.

Credit Card Points Vs Cash Back Rewards

If you are using your credit card with the intention of working towards a vacation, think also about the difference in points rewards and cashback rewards.

If the credit card offers points, then you redeem the points towards your vacation travel plans. As you make purchases using your card, the points accumulate. Then you can trade in the points towards an airline ticket or nights at a hotel.

If the card offers cashback, you can still take this cashback and use it towards travel. Some people like the idea of the credit card giving them money in return for using the card. It can feel like a real boon to get “paid” money from the credit card for making purchases.

Which option is better? This is another moment when personal preference comes in. It feels good to get cashback. It also provides you with the flexibility to use the reward money how you see fit.

This might also mean you take the cashback money and end up buying this week’s groceries instead of putting it towards the flight to Key West.

Generally speaking, the rewards tend to earn more quickly than the cashback option. Again, this is where careful research before opening a card is beneficial.

How Much Does a Dollar Earn in Rewards?

So, if I have a credit card with travel rewards, the real question is how much do I earn? In most cases, you earn one point in rewards for every dollar you spend.

Translated that means when you spend $100, you get the equivalent of $1 in rewards. If you spend $1,000, you get points that will equal $10.

If you have ever taken a vacation, you know you need some serious money saved. You might be thinking, it will take a very long time for those rewards points to be worth anything, especially a whole vacation.

Again, check into the particular card’s rewards. Some cards will offer you 2 and sometimes 3 times the value for every point. This can double or triple the value of the rewards without you doing anything different.

Most cards also offer a bonus or extra points for signing up to have the card. Some cards will offer a bonus or extra rewards points when you spend so much in a short period of time.

Some cards will offer extra rewards points when you refer a friend and they sign up.

If you have a spouse, make sure you are both using a card from the same account, so the points add up from all your household purchases.

For this reason, many avid and seasoned travelers will choose to use one card for all their expenses earning points along the way. Then they pay it off each month. They can accrue the points while living their normal everyday lives.

If you have a credit card that earns frequent flyer miles, the values vary greatly from card to card. It is not generally the same where a dollar would equal one mile.

Airline Credit Card Considerations

From what’s been presented so far, it might seem like the advantage would be to get a general credit card that earns points that you can use towards a variety of travel options.

So, why do people choose to get airline credit cards? If you are a loyal flier with one particular airline and fly often, it makes sense to use that airline’s card. The points will add up quickly and can be used towards travel with that particular airline.

There are often a few other advantages too:

  • Free checked bags
  • Priority boarding
  • Reaching elite cardholder status for flying

There are a few other things to consider. Will the rewards have restrictions when you can use them? Do they have blackout dates that prevent you from redeeming them during peak travel times?

Some airline cards allow you to use miles or points incrementally. So, instead of waiting until you have earned enough for a whole flight, you might have enough to upgrade your seats. Or you might take a hundred dollars off the overall price of your ticket by using their points.

Restrictions Worth Noting

You know the saying, read the fine print. Whether you are hoping to take points from your credit card or redeem frequent flyer miles earned from the airline card, there is likely to be fine print.

For example, if you make a purchase and earn rewards points, then return the item. You should expect the have the points you earned taken back away.

Many companies also require you to keep your account in good standing. If your account falls behind, you can forfeit points you have earned.

You should also make sure you know how long your rewards will last on your account. Some companies with tricky fine print have expirations on their rewards points. So, while you might think you are being careful to save up to get the whole vacation with points, some are expiring because you have not redeemed them in time.

Credit Cards with Travel Rewards, Worth It or Not?

The lure of a free plane ticket or a vacation partially covered in rewards sounds good to anyone. But are the cards with rewards programs attached worth it? The answer is a resounding maybe.

It will actually depend on you as both a consumer and as a traveler. Getting bonus miles or earning points on your credit card sounds lucrative for sure. But will earn the points quickly enough to make the cost of the card worth it?

Again, knowing your own spending and travel habits and reading the fine print is important.

A card might offer a big upfront reward for spending a higher amount in the first 90 days you have the card. But it could also cost more to keep the card. You might get a card with lower fees attached to keeping the card, yet there are more restrictions attached to when and how you can use those points.

If you have some travel dreams, and who doesn’t, it’s best to set some goals. Research both the cost of a card in fees and interest. Then counter that with the travel rewards points you would get in return. Alos. consider how much you will use the card to earn the points and if the cost of that card will, in turn, be worth the expense.

Generally speaking, the more you spend the more points you can earn, so it makes sense that eventually you might earn a reward that makes it worth it. This might be even truer if you are brand loyalist.

Understanding the Ins and Outs of Credit Cards With Travel Rewards

Credit cards with travel rewards sound enticing. The idea of getting a little something free from your spending can feel good too. In many cases the rewards are worth the cost of the card. So cashing in a points miles or earned points towards your future travel feels like a real win.

Understanding your own travel outlook and spending habits can help to find a card that will give you the biggest return on investment.

If you have travel wanderlust and big dreams of places to go and things to see, visit our blog again soon for more great travel articles.