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So you received your shiny new travel credit card and maybe even already earned some sizeable bonus miles. Now what? Maybe you are wondering how to actually use those credit card points to save money on travel.
Depending on your needs and desires, there are several ways to use them. Since everyone’s travel style is different, one way is not necessarily better than the other. Even I employ different methods of using my points, depending on the situation.
Using credit card points for travel can sometimes feel like more of an art than a science. However, this post will help demystify some of the information out there to help you get started using hard-earned rewards points for that next big trip.
4 Ways to Use Credit Card Rewards Points for Travel
While every travel credit card will vary slightly, these are the common ways to use credit card rewards points for trips. Using the examples of my Chase Sapphire Reserve and Capital One Venture – two popular travel cards – I will show you the main ways I’ve used points for travel.
Hint: #3 is the tip I’d most recommend for newbies 🙂
1. Book Trips Through Your Credit Card’s Travel Portal
Some cards, including the Capital One Venture and Chase Sapphire Reserve, allow you to book travel through the company’s travel portal. However, this is personally my least favorite way to use credit card points.
For starters, I have not seen that prices are any lower when booking through these portals than booking through any other big travel site, like Expedia or Booking.
Second, for airfare you are better off booking direct with the airline. I used the travel portal on the Chase Sapphire Reserve for years until I came to the conclusion that the customer service was too unreliable to continue.
Conversely, when I book direct with the airline my customer service is usually great. I can easily make changes or resolve problems either on the airline’s website or by contacting a helpful agent.
When to Book Through the Travel Portal
You may be wondering: If the travel portal is so bad, why would anyone ever book a trip that way? I’ve used the Chase travel portal in the past because it does offer some decent benefits:
- For one, your points go further, with a value of 1.5x their usual worth. The Capital One Venture does not have this same perk.
- Second, you can get extra points by booking flights through the credit card portal. On Chase, you earn 5x points when booking flights this way.
I would still use the portal for smaller trips that are booked close to the travel date. However, for giant international trips or ones booked far out that might change, I’d book direct with the airline.
2. Look for Deals through the “Pay Yourself Back” Feature
Chase has an awesome feature called “Pay Yourself Back”, which allows you to reimburse yourself for certain credit card expenses at 1.25 to 1.5x the normal redemption value.
Current eligible travel-related categories include gas stations and grocery stores at 1.25x. However, this is a category you have to keep an eye on.
For example, Airbnb secretly had a 1.5x redemption value on Chase last year that wasn’t widely announced. To be honest, I almost missed it until I was playing around in the Chase portal towards the end of last year.
We were able to cover an entire stay on Airbnb worth $1,968.91 for only 131,260 using the 1.5x rate. With a 1:1 ratio, this would typically only cover $1,312.60. This was such a win because we were able to book direct with Airbnb and still get the 1.5x rate we’d normally get booking flights indirectly through the portal.
Read Next: Are Plane Tickets Cheaper at the Airport?
3. Use Credit Card Points to Reimburse Travel Purchases With a 1:1 Redemption Value
Redeeming points to cover travel expenses on your credit card statement at a 1:1 redemption value is the most common travel perk you’ll see. This is what the Capital One Venture offers, and I used this perk all the time before we upgraded to the Chase Sapphire Reserve card.
The cool part of this perk is that it can be used for more than just flights on expenses like hotels, rental cars, and even cruises. If you are a newbie to credit card rewards, redeeming travel expenses on your card is the easiest place to start. It’ll get you in the practice of using points, which is preferable to not using them at all because you’re stressing over squeezing every last bit of savings out of them.
The obvious downside of using rewards in this way is that you’ll only get the 1:1 redemption value, and it’s ideal to have points go further than that. However, you have to keep in mind that either way, it’s free money!
4. Transfer Credit Cards Rewards Points to an Airline Loyalty Program
Transferring miles to an airline loyalty program can sometimes help you get more than the typical 1:1 redemption value from simply reimbursing travel expenses. Plus, this method allows you to both save and book direct with the airline!
That said, it takes doing a little extra homework and staying somewhat flexible. Admittedly, it’s taken me years to finally catch on to this.
Before I go any further, halt right there! Are you already a member of any airline loyalty programs? If not, go join a couple and then come back.
Currently, I am a member of two airline loyalty programs: United MileagePlus and American AAdvantage. You should choose the airlines you most frequently use, which will vary based on what is available at your local airport and where you like to travel. In addition, it needs to be an airline the credit card has a partnership with.
Many credit cards let you transfer your rewards points to airline partners at 1x their worth, so you don’t lose any of the value you’ve earned on credit card purchases. This might not seem special at first glance. Why not just get the 1:1 value by reimbursing credit card expenses?
Why Transfer Points to an Airline Partner?
Transferring points to airline partners makes the most sense when you stumble upon an “award flight”. These flights often require less points than a normal fare would require. To find these deals, you have to look up flights on the airline’s website and check the box for “book with miles”.
Your best chance of finding an award flight is by keeping your dates and destination flexible. As you are brainstorming what trips you might want to take in the near future, it pays to spend some time on the airline’s website checking for potential deals. Don’t be afraid to check again every so often, as award flights can pop up at random throughout the year.
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In conclusion, finding the most effective way to use your credit card rewards points for travel might seem like a full time job at first. While you may get a lucky break once in a while, it usually takes some effort to find good deals. I don’t always get a win during my own flight searches, but when I do, it’s oh-so-satisfying.
Don’t let using credit card rewards points overwhelm you. It’s not necessary to squeeze every ounce of value out of every point, and this mindset may cause you to not use points at all. Plus if you over fixate on it, you might miss another sneaky deal that is right in front of you (like me with Airbnb).
Start small with simple credit card redemptions, but in the meantime, start putting some of these other ideas into practice. Before long, you’ll be a pro at using rewards points on travel!
