When it comes to traveling, there are usually two obstacles that prevent people from going on their dream trip: time & money. I can’t help you with finding more time but I can help you with ways of making that trip more affordable.
Most of us have at least one credit card in our wallet, usually many more. I spent a lot of years using credit cards to help with big expenses or to help pay for things I didn’t really have the money for but absolutely needed. I only wish I had known about earning points for travel years ago! If getting started with using credit cards to earn points or miles for travel rewards is overwhelming, keep reading. I hope to explain things as simply as possible.
How do travel credit cards work?
Most credit cards out there are pretty straightforward. You need to buy something, you use a credit card, you pay it off. Most credit cards don’t earn you anything. But then there are credit cards that earn you rewards. Some credit cards earn you cash back, or a small percentage of what you spent, like 2% cash back.
There are also credit cards that earn you points for travel. Some earn you points that you can use towards flights and some earn you points towards hotels. They work exactly the same as a regular credit card except the rewards of earning points for travel can be worth thousands of dollars. If your goal is to travel then you should definitely have at least one credit card for earning points for travel.
Let me first be clear: I’m not advocating that anyone get a bunch of cards and rack up debt. You definitely don’t want to do that and it would totally defeat the whole purpose of using credit cards for earning points for travel.
*This post may contain affiliate links. When you click on an affiliate link and make a purchase, I will earn a small commission. There is no additional cost to you. Some links to credit cards contain bonus points for you and I if you apply for a credit card. Again, this doesn’t cost you anything. Thanks for reading!*
Earning Points for Travel: Where do you start?
Before you get a new credit card, the first thing you should do is sign up with airline loyalty programs. All airlines have them. You just go to the airline’s website and somewhere at the top will be a place to sign up. All you need is an email address and to make up a password. It’s completly free. You want to sign up for all of the major airlines loyalty programs.
You don’t need to sign up for every single airline out there but if you plan on flying to Tokyo and will be flying on Japan Airlines (JAL) then you’ll want to sign up for that one too. But for now, just sign up for the major airlines. You can see below what a few of them look like on the airlines websites.
There are also loyalty/rewards programs for hotels. You definitely want to sign up for those as well. These are also free to sign up with. Hotels such as Marriott, Hilton, and Holiday Inn are some of the most popular ones but there are others as well.
How do you earn points for travel?
There are many ways to earn points for travel. One way is by flying on an airline or staying at the hotel. Every time you do, you’ll earn points. The amount of points you earn depends on how many miles you’re flying or how much you’ve spent at the hotel. For example, by staying at a Hilton Hotel you can earn 10 points for every dollar you spend. So if you spent $100, you’ll earn 1000 points. Once you’ve earned enough points you can then book a room by using your points.
The same thing happens with the airlines. You book a flight and you earn points for every dollar you spent. There are other ways of earning more points but I’ll cover that in another article. I’ll keep this simple for now.
Earning points with a credit card
After you sign up with the airlines and hotel loyalty programs, it’s time to get a credit card. Not just any credit card but one that lets you earn points for travel everytime you use the card. There are a lot of options to choose from so you want to research cards and compare all the benefits.
First you should consider if you want a very specific card such as an American Airlines credit card. If you fly out of a city where American Airlines is the main airline there, then their card might be a good option for you. On the other hand, it might be more beneficial to get a card where the miles you earn can be transfered to multiple airlines. This way you’re not locked into one specific airline.
Let’s backtrack a bit and talk about Airline Alliances. There are three main Airline Alliance programs that all airlines fall under. Those are the Star Alliance, Oneworld, and Skyteam. These alliances allow you to use your points/miles earned to fly on any of those airlines within the alliance.
If you’re just starting out with earning points for travel and don’t have any to use yet, you’ll earn points for every dollar spent and those will go into your rewards account. Once you have enough points then you can use those instead of paying for the flight. So if you have 100,000 points with American Airlines then you can use those points to fly on American Airlines or any airline they are alligned with. You can see below which airlines fall within each of the Airline Allicance programs.
Credit card annual fees and benefits
Of course you aren’t locked into only flying within one certain alliance. It’s good to get credit cards where you can transfer the points you earned to all the alliances. In order to do that you should plan on eventually getting at least 3 travel reward credit cards. The options for this are many. Again, take the time to research and compare the benefits of the cards and decide what works for you.
Most of these travel credit cards do have annual fees. These fees generally range from $95 on up to $5000! Obviously, you probably don’t want to spend that much. I certainly don’t. The most I pay for a card is $550. That is the Chase Reserve credit card. While that may seem like a lot, you do get some of that back.
One of the benefits of the Chase Reserve card is that you get $300 back every year in travel. That could be from using the card to pay for a flight, a hotel, or a car rental. It also comes with lounge access to over 1200 airport lounges. Other benefits are automatic car insurance on car rentals, trip delay reimbursement, and reimbursement for your Global Entry or TSA precheck. There are dozens of other benefits, way too many to list here.
If you’re interested in reading more about the Chase Reserve Credit Card or if you want to apply for the card you can go here.
Credit Card Partners
Most airlines and hotels have their own branded credit card. There are also travel rewards credit cards with partners. If you go to Chase Credit Cards, you’ll see a lot of available options. Be careful when you’re looking for a card. There are reward cards and then travel reward cards. If you want to earn points for travel then make sure you choose the right card (hint: not reward cards).
Chase is partnered with United Airlines, Southwest Airlines, Aeroplan, British Airways, and more. They’re also partnered with Hotels such as Marriott and Holiday Inn (IHG) as well as Disney. There are also business cards that earn you travel rewards. The possibilites are endless!
How do you earn points For Travel?
Sign up bonuses
The first and biggest way to earning points for travel comes through applying for the credit card. Most travel reward credit cards have sign up bonuses. These sign up bonuses vary and change often but they range from 25,000 up to 120,000 points. Credit cards with low annual fees generally offer less of a sign up bonus so again, research and compare cards to find what works for you.
There is a small catch to getting those sign up bonuses. Usually you have to spend a certain amount within a time frame to earn the sign up bonus. For example, if a credit card was offering 60,000 points you might have to spend $4000 within 3 months to get those points. This is really easy to do if you have a big purchase coming up. Most people apply for a new card when they know they have to buy something big so they can get that bonus.
Points for every day spending
Everytime you use your credit card to make a purchase, you’ll earn points for every dollar spent. The amount of points you earn per dollar varies. Usually, its 1-for-1. You spend $1, you earn 1 point. But most travel reward credit cards offer more points for certain things. For example, the Chase Reserve gives 3 points for every $1 you spend eating out, including fast food.
The American Airlines Citi Bank card gives 2 points for every dollar spent on gas. Once you have more than one travel reward credit card you can use them on the things that earn you the maximum amount of points. Of course if you are planning on taking a trip soon on a specific airline then you’ll want to use that card to get you the most points for your flight.
Points for travel spending
Travel reward credit cards also give points whenever you spend on travel. If you have a Chase Reserve card and use it to pay for airfare on a United Airlines flight, you can earn 5 points for each dollar that flight cost you. That’s because Chase is partnered with United Airlines. If you use the Chase Reserve to pay for airfare on an American Airlines flight, that will only earn you 3 points per dollar spent. This is where having at least 1 credit card that belongs in each of the three alliances comes in handy.
An Alaska Airlines credit card will earn you 3 points per dollar spent on airfare on Alaska. However, even though American Airlines is within Alaska Airlines alliance, you’ll only earn $1 per dollar spent on airfare unless you’re purchasing a seat in First Class or Business.
If you’re stuck trying to figure out how to plan a trip, read all about how I plan my trips in my 12 Steps to Planning a Trip.
Final Thoughts on Earning Points for Travel
Starting out with earning points for travel can be confusing and a little overwhelming. There are many more “rules” to travel reward cards than what is listed here but this guide is just to get you started. Trust me, once you do get started it can become very addictive!
Step 1: Sign up for loyalty programs: Airlines and hotels.
Step 2: Research and compare credit cards. Remember to consider if a particular airline hub is near you.
Step 3: Apply for a travel reward credit card and earn a big sign up bonus.
Step 4: ALWAYS pay off your credit card balance every month. You aren’t really earning points if you’re paying a lot in interest.
Step 5: Continue spending to earn more points every month and look for another card to apply for.
Step 6: Repeat, repeat, repeat.