What Is a Travel Rewards Card?

Key Takeaways

Travel rewards cards let users earn points or miles for purchases, often at higher rates for travel and dining.
Rewards can be redeemed for flights, hotels, upgrades, and more—sometimes at higher value through transfer partners.
Cards range from no-fee options to premium cards with lounge access and travel insurance.
The best card depends on your travel frequency, goals, and willingness to manage rewards systems.
Not all travel redemptions offer the same value—smart redemption is key.

One way that credit card providers incentivize users to make purchases on their cards is through rewards. These rewards—often in the form of points or airline miles, or through cash paid back to the cardholder—accumulate over time as a customer utilizes their card, and can then be redeemed for various types of benefits. Travel rewards cards, in particular, provide rewards focused on travel-related expenses, such as flights, hotel stays, dining, and similar purchases.

These programs are highly popular for good reason. Keep in mind, though, that many of these cards carry steep annual fees, and there are typically limitations and other stipulations concerning the rewards themselves to pay attention to.

A travel rewards card is a special type of rewards credit or debit card. Rewards points or miles are accumulated over time as a cardholder makes transactions, often at a percentage of the amount spent that may vary based on the category of purchase. For travel rewards cards, sometimes benefits accrue at a higher rate for charges related to travel or dining, for example.

Travel rewards cards often also offer a sign-up bonus, which can be a sizable perk. A card may provide users with a large sum of points or miles upon reaching a certain spending threshold within a specified amount of time after opening the card, for example.

Points vs. Miles

Most travel rewards cards provide benefits based on units of value, such as points or miles. Typically, either points or miles can be redeemed for benefits such as airline tickets, hotel stays, gift cards, dining, or other similar options.

The value of each point or mile may differ depending on the reward you select. For example, a credit card branded as Chase, hypothetically, may offer a more favorable redemption rate when users redeem their rewards through the Chase Travel booking system.

Note

Travel rewards cards often allow cardholders to use points for a variety of different rewards options. In contrast, miles may be redeemed for travel-related expenses: checked bags, seat upgrades on flights, hotel stays, and so on.

Basic Mechanics of a Travel Rewards Card

Often, a travel rewards card will provide a fixed rate at which users accumulate points or miles (1 point valued at 1 cent for every dollar spent, for example). Points or miles can be held for an extended period of time and redeemed later on for applicable rewards.

However, the value of points or miles may decline over time, and in many cases, these rewards may expire if they are not redeemed by a particular deadline.

Types of Travel Rewards Cards

General-Purpose Travel Cards

Cards like the Chase Sapphire or Capital One Venture card are general-purpose travel cards, meaning that they are not tied to a particular brand or company aside from the provider. Cards in this category generally provide points for all purchases and have a broad array of rewards available to users. They may also provide added travel-related perks like access to airport lounges, membership in TSA PreCheck, and more.

Airline Cards

Airline-specific cards like the Delta AmEx and United Explorer lines are linked to particular carriers and often offer substantial rewards for booking with those providers. Users can typically redeem these rewards for additional perks and services from the carrier itself.

Hotel Cards

A third category of travel rewards card is linked with a specific hotel chain. These cards, including Marriott Bonvoy and Hilton Honors, are similar to airline cards except focused on rewards related to those hotels in particular.

How Travel Rewards Work

Travel rewards cards provide points or miles upon spending, potentially providing bonuses based on the category of spending itself or related to the opening of the account as a sign-up perk.

When it comes to redeeming these rewards, users typically must meet a minimum points threshold to be eligible. Sometimes users redeem rewards directly through a travel portal, which allows them to make direct purchases of flights, hotels, or other benefits using points or miles. In other cases, users may apply their points to eligible purchases to receive a statement credit—a reduction of a credit card bill—by the amount of that purchase.

Sometimes, the most advantageous use of rewards points, however, is through a transfer partner. Some airline or hotel loyalty programs partner with credit card providers to allow users to transfer their points or miles directly to the program platform. These may provide a favorable rate compared to the other methods of redemption, but there is more work involved, potentially leading to user frustration.

Tip

Transferring points to travel partners can yield more value—but requires more effort.

Perks and Features To Consider

The perks of travel rewards cards are varied and may include access to airport lounges, free checked bags, priority boarding for flights, hotel upgrades, free night awards, and even things like travel insurance or trip protection. Other bonuses include zero or reduced foreign transaction fees and other travel-related perks.

For access to these benefits, users should expect to spend up to $900 or more on an annual fee, depending on the card tier. Plenty of options exist below that premium price point, though, including free cards like the Chase Freedom Unlimited or the Capital One VentureOne Rewards card. Mid-tier cards include those with annual fees around $100, such as the Chase Sapphire Preferred card or the Emirates Skywards Rewards card.

Pros and Cons of Travel Rewards Cards

Cons

Annual fees
Redemption issues
Expiration of rewards
Blackout dates

Pros Explained:

Rewards potential: Travel rewards cards can be a game-changer for frequent travelers.
Access: Rewards cards provide access to unique experiences, products, and services often unavailable to other customers.
Offset expenses: Rewards cards can help to offset expenses, both travel-related and otherwise.

Cons Explained:

Annual fees: Those who don’t travel frequently may find that the annual fees for some travel rewards cards aren’t worthwhile for the benefits they provide.
Redemption issues: Redemption can be complex or restricted.
Expiration of rewards: Rewards can expire or lose value if unused.
Blackout dates: Most travel rewards have blackout dates, highly popular times of year for which users may not redeem their rewards.

Is a Travel Rewards Card Right For You?

A travel rewards card may be a great choice if you travel regularly (and thus have significant travel expenses) and particularly if you can pay your credit card statement in full each month. They are less ideal for those preferring a simple approach to booking travel or who don’t like to use points portals. Similarly, if you only travel at highly popular travel times—which may be subject to blackout periods by rewards providers—a card may not benefit you as much.

Warning

Rewards value disappears quickly if you carry a balance or miss payments on your card.

How Do Travel Rewards Credit Cards Work?

Travel rewards credit cards offer points or miles that accrue based on your purchases. You can later redeem those points or miles for free or discounted travel-related expenses like flights, hotel stays, checked bags, and more.

Can I Use Travel Points for Non-Travel Purchases?

The limitations of a rewards program depend on the card. In some cases, you’ll be limited to redeeming points or miles for services from a specific provider. General-purpose travel rewards cards typically allow a wider variety of options, although they are usually travel-related.

Are Travel Credit Cards Worth It if You Don’t Travel Often?

It depends upon the card, your financial goals and spending habits, and other personal factors. There are no-fee travel rewards cards, but they tend not to offer rewards programs as robust as their rivals. You’ll likely get the most benefit from a travel credit card if you travel often.

The Bottom Line

Travel rewards cards can help to offset expenses for those who travel frequently, thanks to their points or miles systems, which can be redeemed for everything from flights and hotels to airport lounge access and even insurance. The terms of these programs differ considerably based on the card—as do the fees. It is worthwhile to compare and contrast the best travel rewards cards to find the right option for you.

Key Takeaways