How to use travel rewards for the best value

These days, there’s a rewards credit card for just about everyone, including frequent travelers. Whether you fly around the country for work, enjoy taking your family on vacations, or love to sight-see solo, earning rewards on your travel spending is a great way to save money and get free perks. 

However, if you’re sitting on unused travel points or miles, they aren’t doing you any good; you have to use your points strategically to get the most value out of them. So if you want to use your travel rewards but aren’t sure where to start, here’s what you need to know.

Types of travel rewards

Travel rewards can come in a few different forms. It’s important to understand the various types of travel rewards so you can earn and redeem them strategically:

  • Hotel points: These are rewards points that you earn when using a cobranded hotel credit card, such as the Hilton Honors American Express Card or the IHG® Rewards Premier Credit Card. You can also earn points by joining a hotel’s loyalty program. Points translate to a dollar value, depending on the card and how they’re redeemed. Hotel points are typically used to book stays, room upgrades, spa services, and more with that particular brand.
  • Airline miles: Similar to hotel points, airline miles are earned by spending money through a cobranded airline credit card, such as the American Airlines AAdvantage® MileUp® or Delta SkyMiles® Blue American Express Card, or through an airline’s loyalty program. You can use your miles to book flights, cabin upgrades, et cetera, through the airline and its partners. Again, the exact value of your miles will depend on the card, airline, and redemption method.
  • Flexible travel points: These rewards points offer more flexibility when it comes to using them, and are typically offered by general (non-branded) travel credit cards such as the Capital One Venture Rewards Credit Card and Chase Sapphire Preferred® Card. These types of cards offer an online portal that you can sign into and then make travel-related purchases using your points, such as flights, hotel stays, cruises, rental cars, and more. You can also transfer points to the card’s airline and hotel partners. 

How to use your travel rewards

Once you’ve racked up some travel rewards, you have several ways to use them. Here are some of the most common options.

1. Book directly with the travel company

If you have a specific airline or hotel you want to book through, you can visit its website, log into your account, and purchase a flight or hotel stay using the points you have available. This is the most straightforward option for redeeming travel rewards. Plus, your rewards are often most valuable when used to book directly with the chain you earned points with.

Keep in mind that just as when you book a flight or room with cash, the total number of points needed will depend on whether you’re booking a standard or premium option. For example, plane seats in an exit row or business class will require more miles than a spot in coach. Similarly, booking a suite or poolside hotel room will require more points than a standard room at the base rate.

2. Book travel through your issuer’s portal 

Most major travel card issuers have a special website for redeeming travel rewards. “Typically, issuers will have an online portal with redemption options including travel booking, travel reimbursement, gift cards, and cash—usually in the form of statement credits or deposits to eligible accounts,” says Rachana Bhatt, head of credit card, unsecured lending, and retail lending distribution at PNC. “Within each redemption category, consumers usually have the ability to choose from numerous options like airline tickets, hotel stays, car rentals, cruises, experiences, restaurant and store gift cards, and much more.”  

The conversion rate for travel points is typically 100 points to every dollar. However, some card issuers may bump up the value of your points when you go through their portal rather than booking directly through travel partner websites. Chase Ultimate Rewards points, for example, see a 25% to 50% redemption bonus when used to book travel through the portal, depending on the particular card you used to earn them.

3. Transfer to a loyalty program

Some credit card issuers have partnerships with different hotel and airline brands to allow cardholders to transfer their reward points directly to the travel partner. For example, American Express has three hotel partners—Choice Privileges, Hilton Honors, and Marriott Bonvoy—as well as 18 airline partners, including Delta and JetBlue. Capital One is partnered with three hotel chains and 15 airlines.

“Leveraging points transfer partners is a popular way to use travel credit card rewards and can make cardmembers’ points go even further for them and their travel plans,” says Pam Habner, CEO of U.S. branded cards and lending at Citi. “Through points transfers, cardholders can redeem their points and convert them to another airline or hotel loyalty program which can provide cardmembers access to even more perks during their travels based on the loyalty program’s offerings.” Habner adds that keeping an eye on limited-time offers can help you find the best conversion rates for your rewards redemption. 

While this is often the method for getting the highest redemption value from your points, keep in mind that it does require a lot more research and knowledge of how various loyalty programs work. Additionally, once you’ve transferred your points to a partner, you can’t transfer them back.

4. Go through an award booking service

If you don’t want to go through the effort of comparing redemption options, points values, and loyalty programs, you could opt to use an award booking service such as Award Advocate or Mile Value. These services specialize in redeeming complicated travel awards, and will search for award availability and book travel for you, for a fee. 

There are definitely benefits to going this route. For one, you’ll free up time to focus on other things while your travel is being planned for you. Plus, an award booking service may know about more redemption options that you wouldn’t otherwise be aware of, opening up possibilities for redeeming rewards at a higher rate. On the other hand, the fee to use these services will eat into any savings you secure. 

5. Redeem for a statement credit 

One of the simplest ways to redeem your travel rewards is by booking your travel directly, then requesting a statement credit to offset the cost on your credit card balance. With this method, you don’t have to worry about comparing redemption values across multiple partners or programs—you simply get the value of your points added back to your balance as a credit, reducing the total amount owed. 

The downside is that you might miss out on higher redemption values. Points redeemed for a statement credit are worth about 1 cent each, versus the higher values you can enjoy by redeeming via other methods.

5 Tips for getting the most out of your travel rewards

Choosing the best redemption method isn’t the only way to maximize your travel reward values and save the most money. Here are a few more ideas to keep in mind:

  • Understand your program: Not all reward programs are created equal. Some offer more value on flights, while others are better for hotel stays or car rentals. Take some time to learn the rules and restrictions of your rewards program so you can use points strategically. Bhatt added that you should have an understanding of your point redemption values before using them. “For a general rule of thumb, consumers should aim for a redemption value of at least one cent per point/mile,” she says. “If you’re redeeming your points/miles for a particular gift card with a face value, that math should be fairly easy. However, if you’re redeeming your points/miles for a flight or hotel stay, you’ll need to do a bit of extra research to find the actual cash value of the flight or hotel stay.”
  • Double-dip: Use a rewards credit card to book flights, hotels, or car rentals that also have their own rewards program. This way, you’ll earn rewards on a single transaction from both the credit card and the travel company.
  • Pay attention to special promotions: Credit card companies and rewards programs often run promotions that offer extra points or miles. Subscribe to newsletters and follow these companies on social media to stay informed about these opportunities.
  • Keep your account active: In most rewards programs, your points or miles will expire if your account is inactive for a certain period. Even small activities like earning or redeeming a small number of points can keep your account active.
  • Be flexible: If you’re flexible with your travel dates and destinations, you can often get more value from your points or miles. Many airlines and hotels have award charts that require fewer points for off-peak times or less popular destinations.

Frequently asked questions

How do I redeem my travel reward points?

There are a variety of ways to redeem travel points, including through your card issuer’s travel portal, directly through travel partner websites, by transferring them to your card issuer’s travel partners, or even requesting a simple statement credit.

What can travel rewards be used for?

Travel rewards are most commonly used to book flights and hotel stays. However, they can be used to cover a number of travel-related expenses, including cruises, rental cars, vacation packages, and more.

How many travel rewards points do you need for a flight?

In general, one travel point or mile is equal to one cent. So if your flight costs $400, for example, you’d need 40,000 points to book it. However, it’s possible to redeem travel points strategically so that each point is worth more, requiring fewer points to book.

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