A travel rewards credit card earns points or miles on qualifying purchases, which can often be redeemed either in partnership with an airline or hotel loyalty rewards program or with the card issuer’s rewards program for travel, including airline tickets, hotel stays or cruises.
Pro Tip
How Do Travel Credit Cards Work?
Travel rewards cards offer similar earning structures to cash-back rewards cards, but earn points or miles instead of cash back. Like cash-back cards, these cards may also offer a welcome bonus for spending a certain amount on the card in a specific period of time following account opening. Travel credit cards typically offer additional benefits such as airline fee credits, hotel or resort rebates, lounge access and more.
How Do I Redeem Travel Rewards?
Travel reward redemptions often come with complex terms and conditions specific to the cardholder agreement. Every card is different, but many flexible travel reward cards feature an online site where redemptions can be made for travel.
Are Travel Rewards Cards Worth It?
For many, travel rewards have become a way of life, and credit cards offer a handy way to unlock travel benefits. Beware of generally higher interest rates and fees with rewards credit cards. It’s important to carefully manage credit card accounts since carrying a balance and racking up interest charges will quickly outweigh any rewards earned. Do the math on your personal spending and consider how you’ll use the benefits before applying for a new card.
Airline Miles
Frequent travelers may consider airline credit cards. These cards allow you to use your earned miles or points with an airline’s reward program. Cards like these are co-branded with a specific airline, but issuer-branded cards may offer more flexibility to redeem miles with different airlines. One major consideration with airline cards are the additional benefits: Many cards unlock access to travel lounges, waive checked baggage fees or provide other travel-related perks. If you aren’t sure where to start, Forbes Advisor evaluated the best airline rewards credit cards.
Pro Tip
Often, getting the highest value from your airline miles comes by booking international flights in premium classes, such as business or first class. These might be fares you otherwise couldn’t afford when paying cash, but with miles it can happen.
How Do Airline Miles Work?
Airlines offer rewards or frequent flyer programs to encourage brand loyalty from customers. Though traditionally miles were earned for spending with the airline, co-branded credit cards offer the ability to earn airline reward miles as a reward for credit card purchases nearly anywhere. These miles can usually be redeemed toward upgrades, benefits or award ticket purchases.
Each airline loyalty program and each co-branded airline credit card work a little differently. Be sure to read the fine print in the cardholder agreement and terms of use for the rewards program before applying for a credit card as a means of earning more airline miles.
How Do I Earn Airline Miles?
Because each airline miles program functions differently and your travel preferences and needs will vary from the next person’s, the best way to earn miles depends on your situation. For example, if you fly Alaska Airlines exclusively, an Alaska co-branded credit card might make sense for you. But if you fly a different airline each time you travel, a general travel card or set of cards may make more sense.
How Do I Redeem Airline Miles?
Since most airline rewards cards deposit accumulated miles directly into your reward program account, the easiest way to redeem miles is often with the airline. This may vary per program, as each rewards program is different. Some miles may have much better value when transferred to a partner airline, but value is ultimately measured by the specific redemption you make.
How Much Are Airline Miles Worth?
The value of your airline miles depends on the type of mile and the price of any given redemption. For instance, if a flight costs 50,000 miles or $500, you’ll be redeeming your points at 1 cent per mile. If that same flight costs $1,000 or 50,000 miles, the value doubles to 2 cents per mile.
How Do I Buy Airline Miles?
Most major airlines allow customers to buy airline miles online. We advise cardholders to focus on earning bonus miles instead of spending money out of pocket to buy miles. Generally, purchasing miles from an airline is more costly than earning them through purchases.
No matter how tempting it is to buy more miles from an airline, keep your eyes to the skies, looking for rewards opportunities instead.
The exception is if you have an upcoming redemption and are short a few thousand miles or you know that the comparable cash ticket price is higher than the cost of buying miles.
Hotel Points
Hotel credit cards provide perks such as elite status, award-free nights and more while also allowing cardholders to earn rewards they can redeem for additional stays. If you’re a loyal patron of a specific brand of hotel, this type of credit card may help you achieve a higher status or provide the occasional discount or award-free stay. If you’re not loyal to any specific hotel, a general travel card with flexible rewards may allow you to transfer points to multiple loyalty program partners or book any hotel you want with your points.
Pro Tip
Many hotel programs now use dynamic pricing for rewards, meaning that the cost in points is more or less correlated to the cash price for that trip. Because of this, even lower-priced hotels can be a good use of points: Some redemptions start at only 3,500 points for an award night.
How Do Hotel Points Work?
If you’re loyal to a specific hotel brand, a co-branded credit card can be a great way to earn rewards fast and achieve elite status with a specific hotel’s loyalty program. Just note that you typically will only be able to redeem a hotel’s points for a free award night with the brand. If you don’t have a hotel preference, you may want to consider a travel rewards credit card that allows you to transfer your rewards to multiple loyalty programs or that offers cash back as a redemption method.
How Do I Get Hotel Points?
Hotel loyalty program points can often be accumulated in several ways, including booking a hotel stay directly on the hotel website. But a rewards credit card may be a convenient way to boost points beyond your bookings. The exact ratio of points per dollar earned depends on the specific card and its structured terms. While spending money with your card is the main way you’ll earn these points, being savvy with how you redeem them can maximize the value of your rewards.
How Much Are Hotel Points Worth?
Though the exact value of your hotel points varies based on specific redemptions and hotel brands, most of the time hotel points are worth less than one cent each.
Business Rewards
Business credit cards offer plenty of benefits to companies both large and small. The key to finding the best credit card for you is figuring out which perks matter most to your business and determining what you prefer: rewards, cash back or help building credit. If you are looking to open a business rewards credit card, Forbes Advisor maintains an updated list of the best business credit cards.
How Do Business Rewards Work?
A business credit card can help keep your business and personal expenses separate. It also offers a way to track how much you’re spending on your business, especially at tax time. Some small business cards come with a rewards program, and some also offer welcome bonuses.
Pro Tip
If you own a small business, you don’t necessarily need a business credit card to keep your business and personal expenses separate. However, if you have plans to build the business over time, a business card is crucial. In addition to business-specific rewards programs, you can typically expect a higher credit limit. A business credit card can also be a great way to establish and build your business credit history.
Reward Programs for Small Businesses
For liability reasons, it’s often important to keep your business finances separate from your personal ones. As a small business grows, it may be time to consider a credit card specifically designed for a small business. A business credit card offers a tool to access the credit you need to grow the operation month-to-month while also earning cash back and other valuable perks.
How To Choose the Best Rewards Credit Card
Credit card rewards are an often-profitable way to earn a little bit extra from the purchases you make on your credit card. Whether you choose cash back, points or miles, rewards can add up over time and help you pay for vacations or everyday expenses. Look at your spending and consider your personal goals to determine what kind of rewards program is the best fit for you. Also consider the negatives of a card. What fees are charged and what risk do you take on with a rewards card?
Annual Fee
An annual fee is essentially a fee you pay to have the credit card. The annual fee will vary by card, but the cards charging higher annual fees often grant you additional perks and higher rewards rates that may make the annual fee worth paying.
Sign-Up Bonus
A sign-up bonus, also called a welcome bonus, is an incentive offered by a credit card issuer to encourage new customers to sign up for a credit card. These bonuses can include additional cash back, points or miles for hitting a spending threshold in a certain amount of time after your card approval. Some cards may also offer additional perks, reduced annual fees, introductory APR periods or even merchandise as a sign-up bonus.
0% APR Period
A 0% APR credit card is one offering a limited period introductory 0% APR on either purchases, balance transfers or both. This break from interest during the introductory period on either purchases or balance transfers typically lasts anywhere from six months to nearly two years. With a deferred interest offer, if balances are not paid off by the end of the period, interest will be charged retroactively to the date of the purchase or balance transfer.
Most balance transfers apply a fee for each transfer of $5 to $10 dollars or 3% to 5%, whichever is greater. Make sure you consider the fees when exploring a balance transfer. And if you select a card with only 0% balance transfer APR, you will likely be assessed interest on any new purchases. Carrying a balance typically nullifies your grace period. Read the terms and conditions carefully to ensure you don’t end up with surprise fees
Foreign Transaction Fees
A foreign transaction fee is typically 1% to 3% of the amount of a purchase and is charged when you make a purchase in a foreign country or in another currency. Some credit cards do not charge foreign transaction fees, so if you plan to travel internationally and use your card, look for one without the fee.
Find the Best Credit Cards for 2024
No single credit card is the best option for every family, every purchase or every budget. We’ve picked the best credit cards in a way designed to be the most helpful to the widest variety of readers.