What can be better than tickets to someplace nice?
Tickets to someplace nice you don’t have to pay for, a free hotel stay and maybe access to an airport lounge while you’re waiting for your flight.
All of this can be a reality with a travel credit card and just enough miles or points.
That may sound fantastic, but getting started with travel rewards can feel overwhelming. There are numerous travel credit cards and rewards programs to choose from, and they all have different — and often confusing — terms and benefits.
Don’t fret. In this guide, we’ll dig into the world of points and miles: what they are, how to earn them and how to spend them wisely.
What are points and miles?
Points and miles are currencies in rewards programs offered by credit cards, airlines or hotel chains.
If you’re wondering what the difference between points and miles is, there isn’t much. Generally, miles have been associated with airlines, and points have been associated with credit card and hotel rewards. However, there are credit cards that earn miles and airline loyalty programs that earn points, so the only difference is semantics.
You can earn points and miles by making purchases with your rewards credit card or through a hotel or airline loyalty program. Each rewards program has its own earning rates and rewards values, as well as redemption options. You may also get additional benefits by being a program member or cardholder.
Depending on the program, you have a few ways to spend your rewards. For example, airline loyalty programs may offer seat upgrades and award tickets, and hotel chains may offer free nights and room upgrades. Travel credit card rewards programs provide more diverse redemption options, but typically, you get the best value by spending your points and miles on airfare.
How points and miles work
As you can see, points and miles can get you free travel, but how exactly does that work?
Let’s take a look at the different kinds of rewards programs to answer this question.
In the travel rewards space, there are two main types of loyalty programs: hotel loyalty programs and airline loyalty programs.
If you’re a brand loyalist — say, you only fly with Delta or stay exclusively at Hilton — earning rewards through such programs can make a lot of sense for you. Plus, you’ll get membership perks that can make your travel experience more comfortable and save you some extra money.
As you spend money within the program, you can reach higher membership levels, earning even more rewards and benefits.
Airline loyalty programs
All major airlines in the U.S., as well as many international carriers, have loyalty programs. Most airlines are grouped into alliances, so you can often use your airline rewards to book flights with a partner airline.
To earn miles with an airline, you need to sign up for its loyalty program, which will reward you for each flight you take. Plus, you can earn miles flying with the airline’s partners — just be sure to include your membership number in the reservation.
Also, most U.S. airline programs have co-branded credit cards. These can provide additional perks and help you earn miles faster by offering higher rewards rates and allowing you to earn on non-airline spending.
Popular airline loyalty programs and credit cards
Airline programWhat to considerCredit cardsValue of points*American Airlines AAdvantageMember of the oneworld allianceAccess to Admiral Club loungesAffordable award flightsElite status perks, including free checked bags, free cabin upgrades, priority seating and more1 centDelta SkyMilesMember of the SkyTeam allianceAccess to Delta Sky Club loungesFree changes on most domestic ticketsElite status perks, including unlimited upgrades, free checked bags, Clear membership discounts and more1.3 centsSouthwest Rapid RewardsNot an alliance memberNo blackout dates for award flightsAffordable award ticketsOpportunity to earn the Companion PassNo lounge networkElite perks include free checked bags, priority boarding, free in-flight Wi-Fi and more1.5 centsJetBlue TrueBlueNot an alliance member but has airline partnersOffers most legroom out of U.S. airlinesFree Wi-FiNo lounge networkElite perks include free checked bags, priority boarding and seating, free alcoholic beverages during in-flight service and more1.4 centsUnited MileagePlusMember of the Star AllianceNo fuel fees on award flightsAccess to United Club loungesElite status perks, including free checked bags, priority boarding and seating, free cabin upgrades and more1.1 cents
*All point valuations via Bankrate.
Hotel loyalty programs
If you only stay at a certain family of hotel brands, becoming a member of their loyalty program may be a no-brainer.
Like airline rewards programs, hotel loyalty programs also have membership tiers, offering better perks at higher levels. Such perks may include early check-in and late check-out, room upgrades, free nights and more.
As for points, you’ll earn them for eligible hotel stays and spending with partners, such as car rental companies, restaurants and more. Additionally, you can get a co-branded hotel credit card to boost your earnings.
Popular hotel loyalty programs and credit cards
Loyalty programWhat to considerCredit cardsValue of points*Hilton HonorsMore than 6,700 properties worldwideBrands range from mid-level to luxuriousNo blackout datesElite status perks include priority check-in and check-out, room upgrades, free nights and more0.6 centsWorld of HyattMore than 1,100 properties worldwideBrands range from mid-level to luxuriousNo blackout datesElite status perks include room upgrades, free breakfast, late checkout and more2.1 centsIHG Rewards ClubMore than 6,000 hotels across 100 countriesBrands range from budget-friendly to luxuriousNo blackout datesElite perks include exclusive rates, late check-out, priority check-in, room upgrades and more0.7 centsMarriott BonvoyMore than 6,900 properties worldwideBrands range from mid-level to luxuryNo blackout datesElite perks include exclusive rates, mobile check-in, late check-out, room upgrades, lounge access and more0.7 centsWyndham RewardsMore than 9,000 hotels across more than 80 countriesBrands include budget-friendly, midscale and upscale propertiesBlackout dates may applyElite perks include discounts, early check-ins and late check-outs, room upgrades and moreWyndham Rewards Earner Card*Wyndham Rewards Earner Plus Card*Wyndham Rewards Earner Business Card*0.9 cents
*All point valuations via Bankrate.
Rewards credit card programs
Loyalty programs can be an excellent idea when you stick to one hotel brand or airline. However, many people prefer flexibility when they travel, picking flights and lodging based on their needs and budget.
If that applies to you, a general travel credit card may be a better option. These cards allow you to earn points or miles on all of your spending and redeem them for travel, cash or purchases with the issuer’s partners. Plus, premium travel cards also provide valuable benefits, like annual statement credits, airport lounge access, travel insurance and more.
The rewards versatility and added perks make rewards credit cards a good addition to a traveler’s wallet. Now, let’s take a look at the four major credit card rewards programs and what they have to offer.
American Express Membership Rewards
American Express Membership Rewards is one of the most popular credit card rewards programs. It’s a great choice for heavy spenders who appreciate luxury travel perks like airport lounge access and elite status at hotels.
Amex has a massive credit card portfolio, so you can find a card that earns Membership Rewards and fits your spending, making it easy to maximize your point earnings.
That said, some of the best Amex cards come with expensive annual fees. The American Express® Gold Card, for example, earns excellent rewards on groceries and dining and offers benefits that any foodie would love, but it also has an annual fee of $250. The Platinum Card® from American Express is a highly valuable card designed for travelers and filled to the brim with premium perks, but its annual fee is $695.
On the bright side, Amex points are highly valuable — about 2.1 cents per point, according to Bankrate — especially when transferred to some of the issuer’s partners or used to book airfare with Amex. Alternatively, you can redeem for hotels, car rentals, merchandise, gift cards and more, but your points will be worth less.
Chase Ultimate Rewards
Another highly desirable program is Chase Ultimate Rewards. There’s a lot to love about Chase’s rewards ecosystem, including its flexibility and incredible value.
Whether you prefer no-annual fee cards that earn rewards on everyday spending or don’t mind paying for the extra value premium travel cards offer, Chase has a card for you. Or, even better, you can combine both options and maximize your earnings and redemption value.
The star of Chase Ultimate Rewards — and one of the best travel credit cards overall — is the Chase Sapphire Reserve card. Even with an annual fee of $550, the card provides outstanding value thanks to $300 in annual statement credit for travel, a long list of premium travel benefits and a 1.5-cent-per-point value on travel redemptions through Chase.
Other redemption options include travel purchases outside of Ultimate Rewards, cash back, gift cards, Amazon or Apple purchases and more. Depending on the card, you may also have an option to transfer your points to travel partners to get the most bang for your buck.
Capital One Miles
Capital One Miles is an up-and-coming rewards program with quite a few promising offers.
The main appeal of the program is its simplicity. The Capital One cards that earn miles have flat rewards rates, so cardholders don’t have to worry about matching their spending to bonus categories.
You can pick a no-annual fee card or opt for more rewards and benefits. The most expensive option, the Capital One Venture X Rewards Credit Card ($395 per year), undoubtedly has attractive perks and statement credit benefits.
Redemption is simple as well. You can redeem for recent travel charges or for booking travel with Capital One. Gift cards are also an option, as well as cash back, but the latter cuts your point value in half. Additionally, the issuer has a growing list of transfer partners.
Citi ThankYou points are the rewards currency of Citi rewards credit cards. The value the program can provide largely depends on the card, but to the right cardholder, it can offer a lot of flexibility.
Citi ThankYou cards come with different annual-fee and rewards structures, so it’s easy to find an offer that suits you. Depending on the card, redemption options can include travel, cash back, gift cards, merchandise and more.
For those looking to maximize travel rewards, the Citi Premier® Card may make the most sense. At $95 per year, it earns rewards on travel purchases, allows you to transfer points to Citi travel partners and offers a $100 hotel savings benefit. That said, the card doesn’t offer any popular premium perks.
Point values of popular credit card rewards programs
Rewards programBaseline valueBankrate value*American Express Membership Rewards1 cent2.1 centsChase Ultimate Rewards (Chase Sapphire Preferred and Ink Business Preferred Credit Card)1.25 cents2 centsChase Ultimate Rewards (Chase Sapphire Reserve)1.5 cents2 centsChase Ultimate Rewards (other Ultimate Rewards cards)1 cent1 centCapital One Miles1 cent2 centsCiti ThankYou (Citi Premier Card)1 cent1.9 centsCiti ThankYou (basic ThankYou points)1 cent1 cent
*Based on the average of the issuer’s five highest-value transfer partners (if available).
Points and miles dos and don’ts
Now that you know how different rewards programs work, let’s talk about the best practices for using them.
Do always pay your bill in full. Many consumers dive into travel rewards without having a plan to pay off their purchases. This is where they get in trouble. The average minimum APR for rewards credit cards is approximately 19 percent. High interest charges can quickly deplete any rewards earnings.Don’t run up large balances. Carrying a large balance on a travel credit card will cost you a boatload in interest, and it can lead to high credit utilization, which accounts for 30 percent of your FICO score.Do pay attention to point values. Rewards programs offer multiple redemption options. However, you’ll often find redeeming for things like Amazon purchases significantly reduces your point value. Try to get the most out of your hard-earned rewards and avoid low-value redemptions.Don’t let your rewards expire. Credit card rewards typically don’t expire while your account is open. However, your airline and hotel rewards might. Pay attention to expiration dates and don’t let your points and miles go to waste.Do look into transfer partners. Most of the time, you can find the best value from credit card rewards when you transfer them to a travel partner. It may seem complicated at first, but it’s worth figuring out.Don’t avoid cards with annual fees. While you may want to start with a no-annual-fee card to get a hang of the rewards game, consider upgrading to a card with annual fees in the future. These cards typically offer high sign-up bonuses, statement credit benefits and premium travel perks that more than justify the card’s cost.
The world of points and miles may seem overwhelming at first. We hope that after reading these fundamentals, you’ll give it a shot. Maybe one day you’ll only travel using rewards and forget what it’s like to buy plane tickets with actual money (like some of CreditCards.com’s staff have).
To find the right travel credit card and begin your journey, check out CardMatch. This tool matches credit card offers to your credit profile, so you can be sure you have a good chance of being approved. Plus, checking your offers doesn’t affect your credit score.
*All information about the AAdvantage Aviator Red World Elite Mastercard, Citi / AAdvantage Platinum Select World Elite Mastercard, CitiBusiness / AAdvantage Platinum Select Mastercard, Hilton Honors American Express Aspire Card, JetBlue Card, JetBlue Plus Card, JetBlue Business Card, Southwest Rapid Rewards Premier Business Credit Card, United Business Card, United Club Business Card, Wyndham Rewards Earner Card, Wyndham Rewards Earner Plus Card and the Wyndham Rewards Earner Business Card has been collected independently by CreditCards.com and has not been reviewed or approved by the issuer.
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