The Ultimate Guide to Travel Rewards

CREDIT CARDS - TRAVEL CREDIT CARDS
Everything you need to know to start traveling the world for free.
Updated Feb. 20, 2024
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The Ultimate Guide to Travel Rewards

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Traveling the world for pennies on the dollar sounds too good to be true. But with travel credit card rewards, this is entirely possible. And learning how to take advantage of travel rewards may sound confusing, but it doesn’t have to be.

As an authority on the topic and lovers of the hobby ourselves, we’ve created this guide to help you succeed in finding ways to cross destinations off your bucket list for next to nothing.

You don’t need to be wealthy to enjoy the world of travel rewards — or even spend a lot of money. In fact, for the average American household, you shouldn’t need to spend more than you already do. And while you may have different travel goals than others, the basics of how to succeed at this hobby will remain the same: pick the best card, earn points, redeem points.

So, here’s what you can expect to get from this guide:

  • Tips for picking the best credit card to get started
  • How to (quickly) earn travel rewards points and miles
  • How to redeem rewards points and miles (for nearly free travel)
  • Helpful tips and tools (plus the things you should avoid)

We’ll also provide some action items to get you started and keep you progressing on your journey, as well as FAQs and helpful definitions — because we know there’s a lot to learn. We’ll try to avoid confusing acronyms and jargon in this guide, but we do have an acronyms glossary if you want to study up.

In this article

How to choose the right travel rewards card

When you think about travel rewards credit cards, your first thought might be to get a hotel or airline credit card. While these types of credit cards have their place, they’re not necessarily the best choice if you’re new to the hobby.

To pick the right travel card for you, it’s important you know how credit card rewards work and which type of points and miles are the best fit for you.

How do credit card points and miles work?

Points and miles are the currency of credit card rewards programs. Depending on which card you have, you can typically use points or miles for travel, cash back, gift cards, and more. Because we’re tailoring this guide to avid and aspiring travelers, we’ll just focus on the travel aspect.

There are three types of travel points and miles you can earn using credit cards: transferable, eraser, and co-branded. Here’s a quick summary of each and how you can use them:

Types of points and miles How they can be used Examples
Transferable Redeem directly in the card issuer’s travel portal or transfer to airline, hotel, and other travel partners Chase Ultimate Rewards
American Express Membership Rewards
Citi ThankYou Rewards
Capital One Venture Miles
Eraser Use your card to book eligible travel, then redeem rewards for a partial or full statement credit to effectively “erase” it Barclaycard Arrival Miles
Discover it Miles
Co-branded Redeem directly with the co-branded airline or hotel chain for free flights or stays Southwest Airlines Rapid Rewards
Hilton Honors
Marriott Bonvoy
Delta SkyMiles
Alaska Airlines Mileage Plan

Depending on the type of rewards program you choose, you may have different options for the type of travel you can redeem your points or miles for.

With co-branded cards, for instance, you’ll typically get the best value when you use your points or miles with that specific airline or hotel brand, so you don’t get a lot of flexibility. These points and miles do, however, have a dynamic pricing structure, so it’s possible to get more value out of your rewards depending on how you redeem them.

With eraser-type rewards, you get a lot of flexibility because you can book your travel wherever you want. But these rewards typically have a flat value per point or mile, so it’s difficult or even impossible to maximize their value.

Finally, transferable rewards programs (which are our favorite) give you the choice between booking travel through the card’s proprietary travel portal — picture a platform similar to Expedia or Orbitz — at a fixed value or transferring them to an airline or hotel partner to potentially get more value.

Check out this video for an explanation (with examples) of how these three types of points and miles work:

Things to consider when choosing your first card

When it comes to picking your first travel rewards credit card, you don’t want to go with the first offer you see or default to your primary bank just to make things more convenient. There are a lot of different features credit cards have to offer, and they can vary wildly from card to card.

Since you’re looking specifically to travel for free, here are some of the most important factors to think about when choosing the right card for you:

  • Annual fee: There’s nothing wrong with getting a card that has an annual fee. But it’s crucial that you make sure you can get enough value out of the card to make up for it. And that’s not too hard to do — even some of the most expensive credit cards on the market provide perks with a value that match or even exceed their yearly cost.
  • Value of the sign-up bonus: Sign-up or welcome bonuses provide an excellent way to quickly rack up a lot of points or miles. Don’t be fooled, though. Some rewards programs value their rewards differently, so just because a card offers more points, it doesn’t mean you’re getting more value.
  • Minimum spend to earn the bonus: Most travel rewards credit cards require you to spend a certain amount within a set period to earn their sign-up or welcome bonus. You’ll want to check the minimum spend requirement and make sure it’s feasible with your budget — every dollar you spend above your normal budget effectively cuts the value of the bonus by the same amount.
  • Additional perks: Some credit cards go above and beyond, offering valuable rewards by adding in extra perks to make your travel more convenient or luxurious. For example, some cards offer various trip protections, complimentary airport lounge access, application fee credits for expedited airport security programs (Global Entry and TSA PreCheck), annual travel credits, elite status, and more. Just keep in mind that more perks usually translates into a higher annual fee.
  • How and where you’ll want to use your points: Depending on your travel goals, one card’s rewards program may be better than another. Different rewards programs have differing values for their points and miles, and some cards do better than others at providing flexibility and value.

Our top two card recommendations to get you started

Even if you know what you want in a credit card, the options can be overwhelming. To help you get started on the right foot, we recommend the Chase Sapphire Preferred® Card or Chase Sapphire Reserve®.

Both cards earn points with Chase Ultimate Rewards, which is arguably the most versatile travel rewards program on the market. Both cards offer bonus rewards on travel and dining purchases. 

The Sapphire Reserve offers 5X points on flights and 10X points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually; 3X points on other travel and dining & 1X points per dollar on all other purchases. 

The Sapphire Preferred offers 5X points on travel purchased through Chase Ultimate Rewards®; 3X points on dining, select streaming services, and online groceries; 2X points on all other travel purchases, and 1X points on all other purchases. Each year on your card anniversary, you will also earn bonus points equal to 10% of the total purchases you made in the previous year.

Both Sapphire cards also provide several valuable insurance protections, including:

  • Trip cancellation and trip interruption insurance
  • Trip delay reimbursement
  • Primary rental car insurance
  • Baggage delay insurance
  • Lost luggage reimbursement
  • Travel and emergency assistance services
  • Travel accident insurance
  • Purchase protection

The Sapphire Reserve, however, takes things to the next level by also offering several elite perks: complimentary airport lounge access, a $300 annual travel credit, rental car benefits, ridesharing perks, luxury hotel perks, emergency evacuation and transportation insurance, and an emergency medical and dental benefit.

Here are some more details for a side-by-side comparison:


Chase Sapphire Preferred

Chase Sapphire Preferred® Card

Chase Sapphire Reserve

Chase Sapphire Reserve®

Sign-up bonus Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening
Annual fee $95 $550
Rewards rate 5X points on travel purchased through Chase Ultimate Rewards®; 3X points on dining, select streaming services, and online groceries; 2X points on all other travel purchases, and 1X points on all other purchases

Each year on your card anniversary, you will also earn bonus points equal to 10% of the total purchases you made in the previous year.
5X points on flights and 10X points on hotels and car rentals when you purchase travel through Chase Ultimate Rewards® immediately after the first $300 is spent on travel purchases annually; 3X points on other travel and dining & 1X points per dollar on all other purchases
Redemption rate 1.25 cents per point on travel booked through Chase; one cent per point on cash back and gift cards 1.5 cents per point on travel booked through Chase; one cent per point on cash back and gift cards
Credits $50 annual credit on hotel stays purchased through Ultimate Rewards $300 annual travel credit
Authorized user fee None $75 annually
Foreign transaction fee None None
Sign up Learn more Learn more

So, how do you choose between the two Chase Sapphire cards?

Pick the Sapphire Reserve if you travel fairly regularly and can utilize the $300 annual travel credit each year. That perk alone lowers the card’s annual cost significantly. While it's still more expensive than the Sapphire Preferred, the premium benefits that come with the Sapphire Reserve are enticing for many. If you feel the difference is worth paying to access those additional perks, then choosing this card is a no-brainer.

If, however, you’re not ready to stomach a steep annual fee and you just want to dip your toes in to get started on this hobby, then the Sapphire Preferred’s benefits are plenty good enough.

Just keep in mind that once you receive a sign-up bonus on one of these cards, you can’t receive another sign-up bonus on a Sapphire product for at least 48 months — and you can’t have more than one Sapphire product at the same time, regardless of when you apply. You can upgrade or downgrade from one card to the other, but you won’t be able to earn the sign-up bonus this way.

Success story: Dreaming of an island getaway? Here’s how to travel to Hawaii for just $22.

FAQ

Since you’re just getting started learning about the world of travel rewards, you may already have a lot of questions. Here are a few common questions we’ve come across from fellow newbies, along with answers that can help:

Is travel rewards a good hobby for me?

While the idea of traveling the world for almost free is appealing, this hobby isn’t for everyone. Earning and redeeming travel rewards for free trips is best for people who are on a budget, can use credit cards without the temptation to overspend, and always pay their balances in full each month.

If that describes you, welcome to the club! If not, the potential cost of racking up debt and interest charges can outweigh any benefit you gain from travel rewards, and you may be better off avoiding the hobby.

What is the Chase 5/24 Rule?

If you’ve been reading about Chase credit cards, you may have come across the 5/24 Rule. In short, this unofficial rule states that if you’ve opened five or more new credit card accounts (this includes authorized user accounts) in the last 24 months, you’ll be automatically declined for most Chase credit cards.

> View more: All about the Chase 5/24 Rule

Will a travel rewards hobby damage my credit score?

You may see small, temporary drops to your credit score every time you apply for a new credit card. But as long as you use your cards responsibly, this hobby should improve your score instead of hurting it.

> Read more: How credit cards can raise your credit score

How much are credit card points worth?

The answer is that it depends. General travel rewards programs often assign a set value to their points or miles — one cent a piece is common — but that can change based on the card you have and whether you have the option to transfer your rewards to a travel partner.

> View more: What credit card points are really worth

What are some other travel rewards cards I should consider?

While there are plenty of reasons to like the Sapphire cards, they’re not for everyone. Here are a few other cards that might be a good fit for you:

Capital One Venture Rewards Credit CardCapital One Venture Rewards Credit Card:
Offers a great early spend bonus, 2 miles per dollar on every purchase, every day and 5 miles per dollar on hotels and rental cars booked through Capital One Travel, statement credit redemption, and the option to transfer your miles to travel partners.

Platinum Card from American ExpressThe Platinum Card® from American Express:
For luxury travel lovers, this rewards card is the pinnacle of elite travel perks. Its rewards program isn’t as strong as the Sapphire Reserve’s, however.

How to earn points

Depending on the card you have, there are plenty of ways to earn points and miles toward your next vacation. Here’s a breakdown of each possible option, using the Chase Sapphire Preferred as an example:

6 ways to start earning points

  1. Sign-up bonus: The Chase Sapphire Preferred offers the ability to earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That’s a little more than $1,333 per month of spending on your part. Once you receive that bonus, it’s worth $750 in travel booked through Chase — or potentially more when transferred to a travel partner. For most people, the minimum spend requirement can be met simply by using the card to pay for monthly expenses.
  2. Optimizing your card spending: The Chase Sapphire Preferred offers 5X points on travel purchased through Chase Ultimate Rewards®; 3X points on dining, select streaming services, and online groceries; 2X points on all other travel purchases, and 1X points on all other purchases. By using the card every time you eat out or book travel, you’ll maximize the card’s rewards program.
  3. Shopping portals: The Chase Ultimate Rewards portal allows you to earn bonus points when you shop at online retailers through the portal — and that’s on top of the rewards you’re already earning. While some other card issuers offer this same feature, many don’t.
  4. Referrals: Chase Sapphire Preferred cardholders can get an extra 15,000 bonus points for each friend they refer who applies and gets approved for the card. There is, however, a maximum of 75,000 points per year that you can earn this way.
  5. Adding an authorized user: This particular card doesn’t offer any bonus points for adding an authorized user, but many other cards do. That said, adding an authorized user to your Sapphire Preferred can still earn you points in that authorized user purchases also generate rewards and count toward the minimum spend for the card’s sign-up bonus.
  6. Anniversary bonuses: Each year on your card anniversary, you will also earn bonus points equal to 10% of the total purchases you made in the previous year. Other travel cards also offer bonus points or miles every time you renew your card and pay the annual fee.
Pro Tip: learn the secret to getting a business class ticket worth $7,500 for just $900!

Sign up for more cards

Chase Freedom Unlimited Credit CardIf you’re planning to get one of the Sapphire cards, it may also be worth applying for the Chase Freedom Unlimited® or the Chase Freedom Flex℠. With the Chase Freedom Unlimited, you earn 5% cash back on travel purchased through Chase Ultimate Rewards®, 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service and unlimited 1.5% cash back on all other purchases. Or, get the Chase Freedom Flex and earn 5% cash back on rotating quarterly categories you activate (on up to $1,500 spent) and travel purchased through the Chase Ultimate Rewards portal; 3% cash back on drugstore purchases and dining at restaurants (including takeout and eligible delivery service); and 1% cash back on all other purchases.

Here’s the trick, though: Instead of earning straight cash back, you actually earn points that you can redeem for cash back, gift cards, travel, and more. And you can transfer points earned with one of the Freedom cards to your Sapphire card account, pooling them together and taking advantage of the more flexible and valuable redemption options (more on what this means in the next section).

Ink Business Preferred Credit CardYou can also sign up for business credit cards — like the Ink Business Preferred® Credit Card and Ink Business Cash® Credit Card — and work the same strategy. Other card issuers may also offer both personal and business credit cards that allow you to combine points or miles within the same program.   

Note: If you’re planning to get a card that offers Amex Membership Rewards points, you can also get multiple cards within the rewards program, and Amex will pool your points for you.

Pro Tip: No single card will offer the best rewards on everything. By having multiple cards, you give yourself a better chance to maximize your earning potential every time you swipe.

One thing you shouldn’t do to earn more points

As we’ve hinted at before, this hobby may not be a good option for you if you think you might be tempted to overspend. Earning travel rewards is nice, but not at the expense of your financial wellness.

As such, it’s a good idea to set a rule for yourself to always pay your balance(s) in full each month and to keep track of your spending so you’re not purchasing things you don’t need just to earn rewards.

FAQ

Now that we’ve covered how to quickly rack up travel rewards, here are some common questions about earning rewards, along with their answers:

What travel rewards card has the best sign-up bonus?

There’s no real clear answer to this question, unfortunately. Credit cards often offer increased sign-up bonuses for a limited time, and because point values can vary from program to program, the best sign-up bonus out there can change.

> Read more: Check out our list of the best credit cards

What if I don’t think I can meet the minimum spend for a sign-up bonus?

Before you apply for any card with a sign-up bonus, it’s essential to run the numbers to make sure you can meet the minimum spend requirement. Again, spending more than you would otherwise to get a sign-up bonus is rarely a good idea.

> Read more: Dozens of ways to meet the minimum spend

Can my spouse or partner sign up and share travel rewards points with me?

With some rewards programs, yes. For example, you can pool Chase Ultimate Rewards points with a spouse or domestic partner.

Amex doesn’t allow you to pool Membership Rewards points with another person. You can, however, transfer your points to a transfer partner account belonging to one of your authorized users. Because you can choose a spouse or partner as an authorized user, you can technically transfer points to them this way. Check the terms before you apply to make sure you get what you need.

How long does it take to get my rewards points?

This depends on the rewards program you have. Some cards, for instance, deposit the points or miles into your rewards account as soon as your purchases post, while others wait until the statement closes — or even a month or two down the road. Because the timing is important, especially when you’re trying to book a trip, check with the card issuer before you apply so you understand the terms.

How to redeem points

Now that you’ve earned enough points or miles, it’s time for the fun part: planning your travel and redeeming your rewards. How you redeem your rewards depends on the type of card you have. With general travel cards, there are three main ways to redeem your rewards:

  • Redeem in portal: With rewards programs that have their own travel portal, you can search for and book travel directly through your rewards account. These portals function similarly to discount travel websites like Expedia, but they don’t necessarily offer access to book with every airline and hotel, limiting your choices a bit.
  • Erase travel purchases: This redemption option is simple: Use your card to make eligible travel purchases, then use your points to get a partial or full statement credit against the purchase.
  • Transfer to partners: Instead of booking travel directly with the card issuer, some rewards programs allow you to transfer your points or miles to one of the program’s partner airlines or hotels.

How to know which approach to take

There’s no one-size-fits-all answer for how you should redeem your travel rewards, so it’s important to understand the pros and cons of each option and your situation.

Redeeming your points or miles through the program’s portal can be lucrative if there’s an incentive to do so. The Chase Sapphire Reserve, for instance, offers 50% more value if you redeem your points this way, making each point worth 1.5 cents. The Chase Sapphire Preferred card offers 25% more value with this redemption option. For cards that don’t offer that kind of incentive, redeeming through the portal may simply be a matter of convenience.

If you have a card that offers to erase travel-related expenses, the biggest benefit of doing so is the sheer flexibility you get. As long as it’s an eligible travel expense, you can spend your money anywhere you want, giving you the chance to price shop and save. The primary drawback is that you’ll typically only get one cent per point or mile with these programs.

Finally, transferring your rewards to an airline or hotel partner is the most complicated way to redeem, since you’ll have to redeem the reward a second time in the new program. If you do it right, though, you could potentially squeeze more value out of each point or mile than you could if you redeemed them with the card issuer.

In this video, our resident expert Brandon shares how he gets the most out of his rewards:

How to maximize your redemption

This is the step where it’s easy to get stuck. You may do one search for flights or a hotel and get discouraged by how many points or miles you need to make it happen. So here are a few tips to help you maximize the value of your rewards every time you redeem:

  • Sign up for flight alerts: Regardless of how you redeem, take a minute to sign up for flight alerts through websites like Dollar Flight Club, Going (formerly Scott’s Cheap Flights), and Secret Flying. When you see new alerts come in, you can jump on the best deals by booking through your card’s portal, booking directly with the airline and erasing the purchase, or transferring directly to the airline’s frequent flyer program.
  • Book in advance: If you’re trying to find award flights or hotel stays one or two months in advance, you’ll likely have a hard time getting valuable redemptions. Try to extend that lead time to at least six months or even up to a year to give yourself enough time to search for cheap redemptions.
  • Be flexible: If you’re not flexible about your dates or even your destination, it can be tough to find a redemption that maximizes the value of your points or miles. If possible, consider expanding your options to give yourself the chance to compare redemptions and find the best one.
Success Story: Sometimes, the best redemptions are about an event and not the destination. Like, say, the World Cup.

FAQ

Now that you’re becoming a pro with redeeming your rewards, here are some more common questions that you might run into as you put your new knowledge into practice:

Once I transfer my travel rewards points, can I get them back?

Nope. The moment you submit a transfer request to a partner airline or hotel, there are no redos. As a result, it’s best to wait until you’re ready to book before you make a transfer and only transfer what you need for the specific redemption.

I have points with one airline; how can I transfer them to another airline?

Airlines typically don’t allow you to transfer your points or miles to another airline. You can, however, use your rewards to book flights on other airlines that have partnered with the one you have rewards with.

For example, United Airlines is a member of Star Alliance, which also includes Air Canada, Lufthansa, Singapore Airlines, and many others. If you have United MileagePlus miles, you can book flights with any of these alliance partners through United’s website.

What do codeshare partners have to do with my travel rewards hobby?

Not all airlines belong to an airline alliance, but most airlines have codeshare partners. In this setup, two or more airlines agree to market the same flight under their own flight codes.

For example, you may be booking with Alaska Airlines, but the flight might actually be operated by American Airlines. As with alliance partners, you can book flights with codeshare partners even if you don’t have miles with their loyalty program.

> Read more: How does airline code sharing work?

How to get started (today) on your travel rewards hobby

As you get ready to apply for a credit card and start racking up rewards, here are some pieces of sage advice that can help you avoid mistakes other travel rewards enthusiasts had to learn the hard way:

  • Build your credit first: Most of the best travel rewards credit cards require that you have good-to-excellent credit to qualify — we’re talking a FICO score of 670 or higher. If you’re new to credit or have a low score, work on improving your credit score before you apply for a travel card.
  • Don’t sign up for every single loyalty program just yet: Diversify your rewards can pay off, especially because airlines and hotel chains often devalue their rewards programs through changes to redemption options. But if you spread yourself too thin early on, it can get unnecessarily complicated; plus, earning enough rewards with any one program can be tough.
  • Make sure you meet the minimum spend: The clock starts ticking on your sign-up bonus as soon as you get approved and the card issuer opens your account. If you don’t get the card in the mail until a week or two later, that’s time you’ll need to make up. Create a plan and do everything you can to meet that minimum spend requirement so you don’t miss out on the bonus.
  • Don’t cancel your card as soon as you earn the bonus: Applying for and earning sign-up bonuses from multiple credit cards is a great way to get your next free vacation fast. But if you cancel your card as soon as the bonus hits, that’s a sign of bad faith and could get you blacklisted from some card issuers. And depending on the program, you may lose the points or miles you’ve already earned.
  • Remember points and miles do not equal literal miles: If you’re booking a flight, the number of points or miles required for the trip have little to do with the actual number of miles you’ll be flying.
  • Overspending or going into debt to earn rewards isn’t worth it: We can’t stress this enough. If you think it’s even remotely possible that you’ll get into trouble financially with this hobby, you’re much better off staying away.
  • Don’t sit on your rewards stockpile for too long: It can be extremely satisfying to watch your rewards balances grow. But if you earn points and miles and then just sit on them, you’re likely to lose value through program devaluations or possibly point expirations. Your best bet is to earn miles as you need them, then redeem them relatively quickly.

Your checklist for getting started

Join the FBZ Elite - Travel and Points Facebook group (FBZE). Our group is all about sharing the ins and outs of reward travel, flight deals, and travel stories. We help each other learn how to maximize this amazing hobby and strive to provide a place for anyone to ask questions and connect with others, no matter your experience level.

Set up a reminder to check your credit score every month; we like to use Credit Karma.

Set up a system for keeping track of your cards. To get started, feel free to make a copy of our sample template and plug in your own details.

Create a system for tracking your points and/or miles. AwardWallet is a great all-in-one type of platform and app that we like using.

Create a system for scheduling your trips. We like using the TripIt app to keep track of our itineraries because it’s free, easy to use, and reliable.

Subscribe to our YouTube channel for the latest videos on optimizing your points, miles, travel, and more.

Bookmark the credit cards page on our website so you don’t miss out on any news or reviews in the world of rewards cards.

Last but not least, keep an eye out for our emails. We’ll be sending you valuable info to help you succeed at your new hobby.

Great for Flexible Travel Rewards

4.9

Chase Sapphire Preferred® Card

Current Offer

Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening

Annual Fee

$95

Rewards Rate

5X points on travel purchased through Chase Ultimate Rewards®; 3X points on dining, select streaming services, and online groceries; 2X points on all other travel purchases, and 1X points on all other purchases

Benefits and Drawbacks
Card Details

Author Details

Ben Luthi Ben is a personal finance and travel writer who loves helping people achieve their money goals. Along with FinanceBuzz, his writing has also been featured on U.S. News, NerdWallet, Experian, Credit Karma, and more.

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