April 13, 2023
If you’re looking to maximize your credit card travel rewards and leverage the biggest perks, there are a few strategic things you can do. Here’s how to choose and use the perfect rewards card for you.
Credit cards are extremely popular in this country. In fact, the Federal Reserve reports that in 2021, a whopping 84% of adults in the U.S. had a credit card.
Exploring a little deeper, it turns out the average American has not just one but three credit cards, according to an Experian report. Having multiple cards can be a good thing because it helps you keep your credit utilization ratio low, which in turn boosts your credit score. It also lets you strategically use certain cards for certain purchases.
For example, there are many benefits to using credit cards when you travel. But travel-focused credit cards that reward you for making travel-related purchases are even better. Perks can include higher reward levels for travel categories, savings on travel expenses, access to airport lounges, and more. If used and managed properly, a travel credit card can be a very valuable tool.
There are several considerations for choosing a travel credit card. Compare the features and benefits of each card, including details of the rewards program, the available credit limit, the annual fee and the interest rate.
If you always use a certain airline or hotel chain, joining their loyalty programs could be very beneficial. However, if they don’t line up with your travel plans—maybe you like to pick and choose based on price and convenience—a more universal rewards program is probably better for you.
While travel-focused credit cards offer great perks for frequent travelers, you could also have a credit card that gives you higher rewards on everyday purchases compared to a travel card that only rewards travel categories. Depending on how you shop, the everyday card might be a better choice. Non-travel credit cards can still be used for travel, and might still earn cash back or points that you can use to offset your travel expenses.
Each credit card rewards program has its own features and benefits. Some programs are geared towards specific spending categories, like groceries, dining or entertainment. But travel rewards credit cards often have some of the most attractive rewards. Understanding your specific rewards program is key to helping you make the best use of your credit card.
If you’re looking to earn the biggest rewards in the shortest period of time, using the card as often as possible is the best strategy. If you treat it like cash rather than a loan—make purchases and then pay them off the same month, before they accrue interest—you can leverage your rewards and maximize your return.
Here are some ways to increase reward earnings:
Credit cards often offer lucrative sign-up bonuses to attract new customers. So consider all the options before deciding which card to apply for. Make sure you understand the fine print, including spending quotas you need to meet before receiving the bonus or time limits you have to meet those quotas. If the offer doesn’t align with your spending habits, it’s probably not worth getting that card.
For example, earning a $100 reward for spending $1,000 in 90 days is pretty doable. But having to spend $6,000 in the same time frame might be out of your range, even if the reward for doing that is worth $750.
It’s important to understand how your rewards program works so you can get all the perks you’ve earned. Some programs automatically give you a statement credit without you having to do anything, whereas others require you to take action by redeeming points or requesting cash back.
If you have choices on redemption, such as whether to take a statement credit, gift card, merchandise or travel, figure out which is worth more—the monetary value or the reward item. If you’re getting travel miles that are worth more than the statement credit, take the miles. But if you can buy the item for less than the value of the cash back, take the money.
Sometimes there are conditions or limitations to choosing certain options. Travel rewards are often the most complicated, and depending on your credit card, you might find blackout dates or other restrictions. So do your research before redeeming your rewards.
To be most efficient, it’s important to keep track of pertinent account details. That includes not just your payment due dates, but also limited-time bonus offers and a list of expiring rewards so you can use them before you lose them.
Interest charges and late fees can eat through all your rewards, so it’s crucial to keep track of your spending and pay your monthly bill on time. In order to avoid late payments that can derail your progress, consider setting up AutoPay, signing up for notification reminders, or adding your due dates to your personal online calendar.
Learning to make regular on-time payments is one of the most vital financial habits you can maintain, because it accounts for the bulk of your credit score. Young adults with limited credit history should establish this track record as soon as possible so they can qualify for better card offers.
Paying at least your minimum due will let you avoid late fees. But carrying that balance could still negate your rewards because you’ll pay interest that’s undoubtedly higher than your reward rate.
Everything related to finances comes with terms, and that includes credit card rewards. You might have to make purchases from a certain website or after clicking a link in order for them to be eligible. You might have to spend a predetermined amount within a set period of time to earn bonus rewards.
Higher-level rewards might be capped on an annual basis. Reward redemption may be limited to specific airlines, hotel chains, or times of year. And your rewards might expire if you don’t use them within a certain period of time. If you ignore the terms, you won’t earn as much as you could, and you might even lose rewards you already got.
Earning rewards is great … unless you’ll never use them. If you don’t ever travel by plane, an airline miles card might not work for you.
Consider these things when choosing a card:
Your answers to these questions will determine what type of rewards program will work best for you. If you rent cars several times a year, look for a card that rewards car rentals or tank fill-ups. If you dine out, pick one focused on restaurant purchases. If you prefer to buy groceries when you travel, choose a card that offers extra perks on grocery purchases. And if you fly a lot, an air miles card might be what you need.
Matching your rewards program to your spending habits is the best way to save money and maximize your perks. If you decide a travel card is what you need, see if you pre-qualify for the Credit One Bank Wander® Card, which offers elevated rewards on travel-related purchases.
For over a quarter of a century, Heather has been working as a journalist in all media: TV, radio, print, and online. After establishing her career in Toronto, she has been living, working, and playing in Las Vegas for the past decade. She loves pulling apart complicated topics to make them simple, fun, and easy to understand, especially in the business and financial niches. But she also enjoys writing about the personal side of life, including success, relationships, families, and pets. She approaches everything from a yin-yang perspective, so her passion for wordplay and entertaining metaphors is always balanced with an intense (and some would say annoying) focus on facts and accuracy.
This material is for informational purposes only and is not intended to replace the advice of a qualified tax advisor, attorney or financial advisor. Readers should consult with their own tax advisor, attorney or financial advisor with regard to their personal situations.
A travel credit card—more accurately, a travel rewards credit card—can help make getting away a little easier. Especially on your wallet, if it’s the right card for you. But what exactly is a travel awards credit card, how do you know if one is right for you, and how do you go about getting one?
Travel credit cards have some of the most appealing perks of all cards, but they also usually come with an annual fee. So it’s natural to wonder, “Are travel credit cards worth it?”