A Beginner’s Guide to Using Credit Card Points for Travel (2024)

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Learn how to maximize a travel points credit card before your next trip.

Bottom Line Up Front

  • Travel rewards credit cards let you turn points, miles or cash back earned from your purchases into flights and other travel perks.
  • When choosing a travel credit card, consider your travel style, credit history and budget to find the right one.
  • By using welcome offers and bonus categories, you can maximize rewards points for greater discounts.

Time to Read

8 minutes

July 5, 2024

The Eiffel Tower, Big Ben, the Pyramids or the Washington Monument—your travel goals are calling. The reality is, getting there can be challenging. The biggest hurdle: the cost. However, there’s a smart strategy to offset these costs: credit cards with travel rewards.

Travel credit cards reward your everyday spending with points, miles or cash back that can be redeemed for flights, hotels and more. Using them in combination with some other strategically chosen credit cards, you can turn your spending into unforgettable travel adventures.

How Travel Points Credit Cards and Rewards Work

A travel rewards credit card is just one type of rewards card you can sign up for. Credit card issuers entice you to use them by offering points, miles or cash back on everyday purchases. The trick is to use those rewards toward travel-related expenses—helping you save money.

Here’s a breakdown of the different types of rewards:

Types of Credit Card Rewards

A Beginner’s Guide to Using Credit Card Points for Travel (2)

Cash back is a straightforward reward option. You can earn a percentage of your spending back as a statement credit or direct deposit. Cash back offers flexibility, allowing you to spend this “free money” however you choose, like your travel plans.

A Beginner’s Guide to Using Credit Card Points for Travel (3)

Points

A Beginner’s Guide to Using Credit Card Points for Travel (4)

Points are the most common type of reward on credit cards. As you spend, you can earn points on your purchases (typically 1-2 points per dollar spent). Our Visa Signature® Flagship Rewards, GO REWARDS® and Navy Federal More Rewards American Express cards earn a maximum of 3X points. Once you’ve accumulated points, you can redeem them for travel benefits like flights, hotels, car rentals or upgrades. Depending on how many points you have, get deep discounts or pay for travel and accommodations without using cash at all.

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Miles

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Similar to points, except, instead of points earned per dollars spent, you earn miles, Travel reward miles are typically earned on airline-specific credit cards or cards that are co-branded with travel partners. Your miles can be redeemed for flights and other travel-related expenses with a specific airline or its partner brands.

The key difference between cash back, points and miles lies on when and how you're able to redeem your rewards. Cash back and points programs tend to offer more flexibility, allowing you to redeem for flights from any airline or hotel chain and even for events and experiences. Miles, on the other hand, are typically locked into a specific airline or alliance, which may limit your redemption choices.

Reward redemption may vary depending on the specific card you use. Generally, you can redeem your points or miles for:

  • Flights: Redeem points or miles for free/discounted flights or upgrades.
  • Hotels: Use rewards for hotel stays and upgrades at partner chains.
  • Car rentals: Cover all or part of your car rental expenses.
  • Travel experiences: Use points for tours, activities, cruises and other adventures.
  • Merchandise: Redeem points for travel-related products through the card’s rewards portal.
  • Statement credits: Apply points toward your credit card balance after booking your trip.

How to Choose a Travel Rewards Card

There are a wide array of travel credit cards available, but they’re not one-size-fits-all. It’s important to consider both your financial situation and your travel goals in order to choose the right travel rewards credit card for you.

  • Travel goals:Think about how you like to travel and your future goals. Are you a frequent flyer with a specific airline? Do you prefer a particular hotel chain? Are you interested in unique travel experiences? You’ll want to match your card’s rewards program to your travel style. Research the brands each card works with to ensure you’ll use the points or miles.
  • Spending habits:Analyze your monthly spending patterns. Do you spend heavily on dining or groceries? Many cards offer bonus categories that reward specific spending habits. Choose a card with a bonus category that aligns with your biggest spending area to accumulate points much faster.
  • Credit history:Your creditworthiness plays a significant role in the cards you qualify for. If you have a limited credit history or a lower credit score, consider starter travel cards with lower score requirements. Although these cards may offer lower rewards rates, they can help you build your credit score and earn travel rewards. If you have excellent credit, a higher-tier card may offer you more robust rewards.
  • Annual fees:Travel reward cards may come with annual fees. Before you apply, weigh the benefits of the card against the annual fee. Cards with premium benefits like airport lounge access or travel insurance might justify a higher fee if you’ll use them frequently. However, if you're a casual traveler, a card with no annual fee and a good rewards program might be a better fit. Navy Federal credit cards come with no balance transfer fees or foreign transaction fees.

With these personal factors in mind, here’s a glimpse at some popular travel card categories to see the different types available:

  • Airline miles cards: These are ideal for frequent flyers with a preferred airline or alliance. Airline miles cards may offer free checked bags, priority boarding, potential upgrades or bonus miles on flights booked with a partner airline.
  • Hotel points cards: Hotel points cards are perfect for travelers who like to stay at specific hotel chains. Points can earn you hotel stays, cool perks like room upgrades and free breakfast and bonus points when you stay at partner hotels.
  • Flexible points cards: These cards provide the most flexibility for different travel styles. Points can be redeemed for a range of travel expenses from various partners. Navy Federal’s Visa Signature® Flagship Travel Rewards Credit Card offers 3X points on travel purchases and flexible points redemption, allowing you to maximize your rewards based on your needs.

QUICK RECAP

How to Select a Travel Rewards Card

  • Choose rewards you want: Flexible points, airline miles, hotel points
  • Do your research: Brand partnerships, bonus categories, card fees
  • Consider credit history: Credit score, length of history, APR

QUICK RECAP

How to Select a Travel Rewards Card

  • Choose rewards you want: Flexible points, airline miles, hotel points
  • Do your research: Brand partnerships, bonus categories, card fees
  • Consider credit history: Credit score, length of history, APR

How to Maximize Your Credit Card Travel Points

With most travel credit cards, you’ll earn rewards just by using the card; however, occasional use might not translate into valuable rewards. By using your travel rewards credit card strategically, you can maximize your points or miles—meaning better perks on your trips! Here are a few ways to earn as many rewards as possible.

1. Complete sign-up bonuses and welcome offers

Many travel cards offer sign-up bonuses to encourage you to use the card immediately. These offers usually include bonus points/miles if you spend a certain amount in the first few months. Bonuses can jumpstart your points balance significantly. Look into whether your travel rewards card offers a welcome bonus and do your best to meet the minimum threshold.

Smart Money Tip

The best way to hit your sign-up bonus spending requirement is to plan ahead. If you have a big purchase coming up (like Christmas shopping), sign up for a rewards card in advance, so you can earn rewards on planned expenses.

2. Leverage bonus categories

Most rewards credit cards have a base earning rate for all purchases, such as 1 point per dollar spent. But, many also have bonus categories that give you additional rewards for spending on travel, dining or gas. Use your travel rewards card any time you purchase in those categories to rack up extra points/miles.

3. Watch out for promotions and partnerships

Rewards cards frequently offer bonus points in partnership with retailers, travel companies and other businesses. Keep an eye on your card issuer’s website or app for promotional offers. You might be able to earn extra points on purchases made with your card.

Additionally, if you have a credit card affiliated with a hotel or airline, always use that card when purchasing from those brands. These cards may give extra points for brand-specific spending.

4. Research points transferability

If your card lets you transfer points, explore loyalty programs through travel partners like airlines and hotels. Some loyalty programs might have a better redemption value for your desired travel option. This can significantly stretch your points and unlock more valuable travel rewards.

How to Redeem Your Travel Rewards

Once you’ve accumulated a healthy travel points balance, it’s time to redeem them for a dream vacation! There may be several ways you can redeem your travel rewards, so research your credit card program’s offerings.

If you want to book travel directly with your points or miles, you have 2 options:

  • Card issuer travel portal: Most credit card issuers host an online travel portal. Here, you can redeem points directly for flights, hotels, car rentals and packages. All you have to do is sign into the portal and book your trip.
  • Transfer points to travel partners: Many cards allow you to transfer your points directly to the loyalty programs of airlines, hotels and other travel companies. From there, you can redeem points through the company’s booking portal.

It’s a good idea to compare redemption rates between your card issuer’s portal and travel partners’ loyalty programs. Sometimes, you might find a better deal by transferring points. At other times, card issuer promotions make booking through the portal more advantageous.

In addition to travel booking options, you may have access to other redemption choices and perks. For example, Navy Federal’s Visa Signature® Flagship Travel Rewards Credit Card allows cardholders to redeem points for cash, gift cards and merchandise through a rewards portal. Additionally, cardholders are eligible for a statement credit of up to $100 for Global Entry and/or TSA Pre✓® application fees, when purchased using the card.1

Take time to explore your credit card’s rewards redemption options—especially if you have a flexible points rewards card. By redeeming points strategically, you could pay for almost every aspect of your upcoming trip!

Use Your Travel Points Credit Card Responsibly and Save

Travel rewards credit cards are a fantastic way to save on travel, but it’s important to use them responsibly. Avoid overspending just to earn rewards. Instead, use your card for things you’d normally buy. Monitor your credit card usage and pay your balance off in full every month to avoid paying interest and fees.

When you choose a rewards card through Navy Federal Credit Union, you’ll also gain access to fraud notification, a Zero Liability policy for unauthorized transactions and access to your credit score. By using these tools, you can keep a close eye on your credit and avoid unexpected costs.

Remember: There’s no right or wrong way to use a travel points credit card. No rewards program will be one-size-fits-all. If you want to use a rewards credit card to save on travel, the best thing to do is research and understand how your program works to maximize the benefits.

  1. Examine your spending habits, travel goals and brand preferences to determine what kinds of travel rewards cards make sense for you. Choose between a co-branded or flexible credit card based on your travel style.
  2. Research card reward programs and additional perks, such as a free year of Amazon Prime® through Navy Federal’s Visa Signature® Flagship Travel Rewards Credit Card. Look for a card that offers perks in the short and long term.
  3. Get prequalified for a Navy Federal Credit Card that suits your personal credit history and rewards preferences. With the right choice in mind, apply and start earning rewards!

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1

Receive up to $100 in statement credits for Global Entry or TSA Pre✓® charges that are processed after the Global Entry program application fee or TSA Pre✓® application fee is charged to your Visa Signature Flagship® Rewards Card. Visa Signature Flagship Rewards Cardholders are entitled to up to $100 in statement credits per eligible Visa Signature Flagship Rewards Credit Card number every 4 years per Global Entry or TSA Pre✓® program. The 4-year period is based on the date of the first qualified transaction. Statement credits are applied to application fee charges made on or after account opening. Please allow 6–8 weeks after the applicable program application fee is charged for the statement credit(s) to post to your account. Cardholders are responsible for payment of all charges until the statement credit(s) post(s) to their account. Visa® and Navy Federal Credit Union reserve the right to modify or cancel this offer at any time and without notice. Global Entry is a U.S. Government program, operated by U.S. Customs and Border Protection (CBP). TSA Pre✓® is an expedited airport security program operated by the U.S. Transportation Security Administration (TSA) that allows low-risk travelers within the United States to speed through security at select airports. Visa and Navy Federal Credit Union have no liability with regards to the Global Entry and TSA Pre✓® programs and have no control over either program, including, but not limited to, the application, approval process or enrollment, and fees charged. For complete details on the Global Entry program, including full terms and conditions, go to cbp.gov/travel/trusted-traveler-programs/global-entry. For more information about TSA Pre✓® and the application process, visit tsa.gov/precheck. The TSA Pre✓® trademark is used with the permission of the U.S. Department of Homeland Security.

This content is intended to provide general information and shouldn't be considered legal, tax or financial advice. It's always a good idea to consult a tax or financial advisor for specific information on how certain laws apply to your situation and about your individual financial situation.

A Beginner’s Guide to Using Credit Card Points for Travel (2024)
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