Travel: How to get the most out of rewards cards
If you have a travel rewards credit card, chances are you’re confused about how best to use it, said Lorie Konish in CNBC.com. “That means you’re probably leaving real money on the table.” More than half of Americans say they’re “befuddled” by frequent-flyer programs, 47 percent find hotel loyalty programs confusing, and 45 percent are puzzled by credit card rewards in general, according to a poll by consumer safety site NextAdvisor. There are some simple steps you can take to avoid this confusion. Always read the fine print when signing up for a new card so you know exactly what rewards are being offered and how you’d redeem them. Then make sure those rewards fit your lifestyle. “Don’t sign on for a frequent-flyer rewards program for an airline you never fly.” And if you fly only a couple of times a year, a travel rewards card might not be right for you. Instead, get a “cash-back rewards card, which lets you redeem those rewards for almost anything.”
Travel rewards cards fall into two broad categories, said Scott McCartney in The Wall Street Journal—those that are affiliated with a particular airline or hotel and those that aren’t. Many credit card watchers say cobranded airline cards, which typically pay one frequent-flyer mile for each dollar spent, “are losing their luster.” With reward seats getting “more expensive and harder to find,” the payback is getting weaker. Unaffiliated cards from Chase and American Express often offer a better deal. They give points you can use to pay for travel through an Expedia-like booking service, or that can be transferred to a range of hotel and airline partner-loyalty programs. The most efficient way “to get points quickly is through sign-up bonuses,” said Lucas Peterson in The New York Times. The Chase Sapphire Reserve, for example, offers a 50,000-point bonus when you spend $4,000 in the first three months after opening the account. But keep in mind that some cards have high annual fees—$450 for Sapphire Reserve, $550 for American Express Platinum. And always pay the balance of the card in full each month. “The point is to make money, not give it back to the banks.”
Accumulating frequent-flyer miles with a card is easy; what’s hard is “learning how to use them wisely,” said Jen Ruiz in The Washington Post. To maximize your return, book a trip in one-way stages; a recent NerdWallet study found that nearly two-thirds of one-way flights offer better point values than round-trip flights. Avoid using miles during peak travel times: I saw prices from Honolulu to Miami range from 25,000 miles to 90,000 miles in the same week depending on whether I left on a Tuesday or Sunday. And never redeem your miles on “anything not powered by jet fuel.” So ignore airlines’ offers of discounted magazine subscriptions or apparel—your points will go much further when spent on flights.