By Alexis Berger
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Travel can be life-affirming, allowing you to connect with loved ones who live far away, visit destinations for the first time or simply get away to relax. One way to make the deal even sweeter? Maximizing points and other travel benefits to minimize out-of-pocket spending.
Many travel credit cards work by simply letting you earn points with eligible purchases. In turn, you can often use those points to book flights, hotel stays and more.
“Many credit cards offer points that can be redeemed for travel reservations at a fixed value, usually one cent per point,” Jason Steele, journalist and expert on credit cards and award travel, tells Newsweek. “To the extent that these points offset what one would spend on travel, they could be considered a cash equivalent.”
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Each card has its own rules and stipulations, with some options letting customers redeem points via direct booking on a travel portal and others allowing point transfers to airline partners or hotel loyalty programs.
To get the most value from your points and travel rewards program of choice, you’ll want to understand exactly how a given card works.
How Do Travel Credit Cards Work?
There are a few categories of travel credit cards, and each type offers its own set of benefits.
For example, airline-specific credit cards are co-branded between a specific airline and a credit card issuer; eligible purchases accumulate points with the airline’s loyalty program and are redeemable for flights (and sometimes purchased miles). These cards also typically offer airline-specific benefits, like free checked bags and priority boarding. Hotel credit cards work similarly, allowing customers to rack up hotel loyalty points with nights booked on the card, plus common cardmember perks like free nights, room upgrades and late checkout.
Some general travel reward credit cards let you redeem points on their own travel portal, or another specific platform, for hotel bookings, airfare and more. This type of card provides the flexibility to use points to pay for reservations with various airlines and hotels, whereas single-company loyalty cards typically do not.
Transferable-points cards—like Chase Sapphire Reserve and American Express Platinum—also have their own travel portals for direct booking, just like the general cards above, in addition to the capability to transfer points to certain airline and hotel loyalty programs. The ability to transfer points is an added bit of flexibility, and customers who research redemption values with various travel partners stand to maximize their points.
No matter which type of card you choose, know that most travel credit cards feature similar ways to generate points. For example, it’s common to get a points-based welcome bonus when you spend a minimum amount on the card within the first few months of opening the account. You’ll also get points through regular spending, with specified types of purchases earning additional points. Chase Sapphire Reserve, for instance, awards four times the points per $1 on direct hotel and airline bookings.
How Do You Turn Credit Card Points Into Flights?
After you’ve earned your points by making eligible purchases on your travel credit card, you’ll log on to your rewards program, whether that’s Chase Ultimate Rewards, American Express Membership Rewards, Capital One Miles, Citi ThankYou Rewards, Bilt Rewards or otherwise.
You’ll either book directly on the platform or, if applicable, transfer your points to an airline to complete the reservation. If you plan to transfer points, you’ll first need to verify which airlines participate with your credit card rewards program. Once you confirm the airline compatibility, you’ll check the transfer ratio of points to miles, as some are more favorable than others. If the ratio is 1:1, for example, that means 10,000 credit card points is equivalent to 10,000 miles—but here’s where you’ll want to do some research, as different airlines may have different conversion ratios, and different airline miles aren’t of a standardized value.
Note that potential taxes, award seat availability limits and airline fuel surcharges can apply even when booking flights using transferred points.
Once you understand the real points-to-miles value, it’s time to initiate the transfer—typically an irreversible process—which might be complete instantaneously or require a few days.
Travel Portal vs. Airline Transfer: What's the Difference?
There are benefits and drawbacks of using a general travel portal versus transferring points to an airline, and neither is a surefire strategy to score the best deal. The best choice for you will depend on your priorities, including any airline loyalty, flight time preference or other factors that can influence price and point value.
What Beginners Should Know Before Redeeming Points
When you’re booking on points, there are some basics to remember in order to snag the best value. That’s particularly true with transferable-points cards, where you have flexibility in how you apply your points.
First, you’ll want to compare the cash and points prices. Sometimes the conversion rate is in your favor, other times less so. You’ll also want to understand transfer rules, given that most transfers are irreversible. For example, some cards may require a minimum number of points to initiate a transfer and the process may not be immediate. If you’re hoping to book a last-minute trip on points, but those points don’t hit your account for 48 hours, you might find yourself in a pickle.
It’s also crucial to know whether your points expire because the worst strategy for maximizing their benefits is waiting until it’s too late to use them at all.
Contact Newsweek editor on this story: Catherine Clark.
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