Reward Credit Cards: A Travelers Best Friend

Perhaps the biggest obstacle to travel is cost.  Saving for a trip used to mean putting spare change in the piggy bank.  Today the best way to save up for travel is by choosing and using the right credit cards.  Reward credit cards are a virtual piggy bank and unlocking their potential will give you much more than spare change.

Frequent Fliers No Longer Means Flying Frequently


Frequent Flyer programs were designed by airlines to encourage loyalty by rewarding those who flew often with one particular airline.  Loyalty programs spread to credit cards and soon spending money using a credit card came with reward points.  Those reward points could be used for a variety of purposes including being transferred to airline loyalty programs.  Airlines also teamed up and offered co-branded credit cards that specifically  earned reward points with one specific airline.  Hotel chains also joined in and you can earn rewards towards your hotel stay as well.

The Sign Up Bonus


While most people own one or two credit cards, the savvy traveler has taken advantage of the initial credit card offering to rack up huge rewards very quickly.  Most reward credit cards offer a sign up bonus to entice consumers to their card.  Most are tied to a minimum spend requirement.  You are only eligible for the sign up bonus by purchasing  a certain amount within a given period, typically 3 months from your sign up date.  While some reward card offers come out to $100-$200, others offer almost too good to be true bonuses that when used properly can come out to $1,500 or more in travel expenses. 

Many consumers have taken advantage of these sign up bonuses and will apply for multiple credit cards at once and repeat the process several times per year.  The result is racking up massive amounts of reward miles or points that can be used for airfare, hotel stays, or any number of other expenses.

Diversify, Diversify Diversify


In addition to the initial offering reward credit cards will often give you multiple points per dollar spent on specific categories such as gas stations, dining, or travel expenses.  You can maximize your earning by choosing multiple cards, each with different category bonuses.  The goal is to ensure that every expense is earning more than one reward mile or point per dollar spent. 

In addition to diversifying the category bonuses, it pays to diversify the reward programs themselves.  Having multiple options when it comes time to travel allows flexibility when the time comes to redeem those rewards.  Flexibility in turn gives you options and choice is a wonderful gift for travelers.  It also pays to be aware of other ways to maximize your reward points building.  Among the most lucrative is using shopping portals. 


Newcomers to the travel reward game may not realize that many of the top brands in the industry have created alliances allow travelers to choose between several different airlines within the same program.   For example, the Star Alliance includes United Airlines,  Lufthansa, Singapore Air, and many more.  Rules do apply, but the idea is that you can redeem a reward flight with any of the alliance partners and typically each member specializes in one part of the world.  Hotel chain consolidation has led to the same type of situation in the hotel reward game with your reward points being able to be used in a variety of locations.


  How to Begin

For those new to the credit card reward game it is best to first determine what your needs are.  If you are looking to travel within the United States, look at credit cards tied to Southwest and Jet Blue airlines.  Those wishing to travel internationally look at what airlines fly to your future destination and target cards that tie in with those airlines. 

Also strongly consider keeping one or more credit cards through Chase branded credit cards.  This is for two reasons.  First, they are among the most powerful and flexible rewards points you can have.  With Chase’s Ultimate Rewards Program you can transfer points to 11 different partners which includes many of the biggest airlines and hotel chains.  They also transfer at a 1:1 basis that doesn’t always happen with competitors. 

Secondly, while Chase owns the most desirable rewards program out there, they have also instituted controls to try and prevent consumers from accumulating too many credit cards at one time.  The so called 5/24 rule, in which they usually reject any application where the applicant has applied for 5 or more credit cards within the last 24 months.  Therefore it is important to begin accumulating Chase Ultimate Reward points first and then branch out to other banks cards, so you do not get shut out of these valuable rewards.

The best part is that you can enjoy the fruits of reward credit cards without altering your normal spending pattern.  Spend how you normally would while paying attention to how you are paying for it.  Use reward credit cards smartly and save big on your next trip.   

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