Travel rewards points programs can be a great way to save money on your next trip, but they can also be confusing – and often downright frustrating – to navigate.
Perhaps that’s why six in 10 people who have travel rewards never even use them, according to a study from ValuePenguin.
To save you from squandering valuable benefits, or to help you if you’re new to using travel perks, here’s a quick primer on the three main types of travel rewards programs that exist, how they work and what you need to do to earn and redeem travel benefits.
With this knowledge, you can make an informed decision about which one is right for you.
When my son was in college, I often used the miles I’d racked up on my card to fly him home during holidays and summer breaks. It was a great money saver!
Airline miles programs
Airline miles programs are offered by most major airlines – like American, Delta, Southwest or United – and they allow you to earn miles or points for each flight you take with these carriers. The airline points can then be redeemed in the future in various ways.
Typically, you’ll redeem airline points for free flights. But you might also snag a flight discount if you’re using a combination of cash and airline miles to purchase a ticket.
Other times, you’ll trade in your airline miles for flight upgrades. This is an especially desirable perk on long-haul flights. Imagine, for instance, flying coast to coast and getting bumped up from economy or coach seating to a cushy seat in business or first class.
Some airlines even let you earn points if you don’t fly. Instead, rewards are based on your spending when shopping or dining, and so on. (Note: With airline rewards, the words miles and points are used interchangeably; so just think of them as a form of currency to pay for flights.)
Airlines often let you convert your miles into gift cards for restaurants, stores or online retailers.
Earning and redeeming airline points
To earn rewards through airline miles programs, you sign up for the desired airline program and enter your membership number when booking a flight. Alternatively, you can apply for a co-branded credit card and use it for routine purchases. (A co-branded credit card is one where a business – such as an airline company, hotel or retail store – partners with a bank to offer credit cards bearing the business’s name or loyalty program. The bank then offers those credit cards to people, enticing them to sign up by getting rewards every time they use the card.)
When it comes to redeeming rewards, there are a few things to keep in mind.
First, check the program’s rules and restrictions to make sure the reward you want is available when you need it. Some programs have blackout dates or limited availability.
Second, consider the value of the reward compared to the number of points or miles needed to redeem it. Sometimes, it might be worth saving your points for a higher-value reward in the future.
If you love to travel with your kids or grandkids, airline miles programs can be especially useful.
You can earn miles for airline travel and then use your miles to book free or discounted flights for the whole family, making travel more affordable.
For example, you could use airline points earned through Delta SkyMiles to book a family vacation to Disney World or to visit relatives and friends across the country.
When my son was in college, I often used the miles I’d racked up on my co-branded Chase United Presidential card to fly him home during holidays and summer breaks. It was a great money saver!
Hotel rewards programs
Hotel rewards programs work similarly to airline miles programs, but instead of earning points for flights, you earn them for hotel stays. These points can then be redeemed for free nights or upgrades at participating hotels.
What kind of upgrades? Think bigger, nicer rooms and hotel suites instead of standard rooms; and rooms with great views or additional amenities, like plush bathrobes or concierge services.
Earning and redeeming hotel points
To earn such rewards through hotel rewards programs, you just sign up for the hotel’s program and enter your membership number when booking a hotel stay. You also have the option of applying for a co-branded credit card and charging your everyday purchases on it.
When it comes to redeeming rewards, again, the most important thing is to review the program’s rules and restrictions. You should also know the value of the reward compared to the number of points needed to redeem it.
Some hotel rewards programs also offer other perks, like free breakfast or late checkout, which can make your stay more enjoyable. I’ve happily tapped the late checkout benefits offered via Hilton Honors and other hotel programs countless times since I prefer to sleep in when traveling, and I avoid booking early morning flights.
Using hotel points for a couples vacation or a girlfriends getaway can be another great way to save money on accommodations.
Even if you’re traveling for business, why not take advantage of that opportunity to later lighten your wallet when you take personal vacations?
For example, you can earn points for your business hotel stays and then use those hotel points through a program like Marriott Bonvoy to book a luxury hotel during a romantic weekend getaway. Or maybe you use those hotel points for a fun-filled trip with your besties to Miami or another beach destination.
Credit card rewards programs
Credit card rewards programs allow you to earn points or cash back for everyday purchases, which can then be redeemed for travel expenses, like flights, hotels and rental cars. Some credit cards also offer travel-specific perks, like airport lounge access and travel insurance.
Over the years, I’ve spent many hours in the United lounges at Newark Airport and Bush Intercontinental, thanks to my Chase United Presidential card. Complimentary lounge access is especially nice when there are flight delays – or when you simply want to get away from throngs of travelers in the main airport terminal.
As long as you don’t change your spending habits, credit card rewards programs are a good way to earn travel rewards, because they can save you money on things like free checked bags or just make your travel go smoother, as with priority airline boarding.
Earning and redeeming credit card rewards
To earn rewards through credit card rewards programs, you apply for a card and simply charge away, making your normal purchases. You can also put some of your regular bills, like your monthly utilities, on the card.
But don’t get too spend happy! Resist the temptation to spend or charge solely to get travel rewards. Otherwise, you’ll rack up excessive debt. A good rule of thumb: Ask yourself, “Can I pay off my balances in full each month?” If the answer is no, reduce your credit card spending.
Some cards offer higher rewards for specific categories, like dining or travel.
When it comes to redeeming rewards, make sure to compare the benefits and fees of each card. Some cards have annual fees or higher interest rates, so take time to weigh the costs against the benefits. Many credit cards also offer sign-up bonuses, which can be a great way to earn a large number of points or miles right off the bat.
Sometimes, we all need to just de-stress and get away from it all, and from everyone.
If that sounds appealing, accrue enough awards – by using options such as the Chase Sapphire Preferred card, the Citi Premier Card or the Capital One Venture Rewards card – and treat yourself to a nice solo vacay to Hawaii or the destination of your choice, including flights and a hotel stay.
Depending on the airline, you may be able to use your miles for in-flight purchases such as meals and snacks, drinks onboard a flight or Wi-Fi access while you’re up in the air.
More affordable adventure awaits
As you can see, travel rewards programs can be a great way to save money on your next trip.
By understanding how airline miles programs, hotel rewards programs and credit card rewards programs work, you can choose the program that best fits your travel needs.
No matter what you’re planning – from a family vacation or a couples getaway to a girlfriends trip or a solo sojourn – travel rewards point programs can help make travel more affordable and enjoyable.
So why not start earning rewards today and planning your next adventure?
Don’t have enough miles for an airline ticket? Use your miles 10 other ways
Even if you don’t have enough miles or points for a full airline ticket, many airlines offer a variety of other ways to use them. These options can vary depending on the specific frequent flyer program, but some common uses include:
1. Upgrade to a higher class Use your miles or points to enjoy a better travel experience, by upgrading your seat from economy to business or first class.
2. In-flight purchases Depending on the airline, you may be able to use your miles for in-flight purchases such as meals and snacks, drinks onboard a flight or Wi-Fi access while you’re up in the air.
3. Hotel bookings Most airlines partner with hotel chains, allowing you to use your miles or points to book hotel rooms while traveling.
4. Car rentals Similar to hotel bookings, some airlines have partnerships with car rental companies, meaning you can use your miles or points to book a rental car.
5. Magazine and newspaper subscriptions Many airlines let you exchange your miles or points for magazine or newspaper subscriptions. This lets you swap those airline miles or points to read your favorite publications.
6. Charity donations Certain frequent flyer programs allow you to donate your miles to a charity partnered with the airline.
7. Shopping Nearly all airlines have online shopping portals where you can use miles to purchase a variety of items, from electronics to clothing and more.
8. Gift cards or dining Airlines often let you convert your miles into gift cards for restaurants, stores or online retailers.
9. Experiences or auctions Some frequent flyer programs allow you to use your miles to bid on or buy unique experiences, like concert tickets, special events or even travel packages.
10. Buying, transferring or gifting miles Airline carriers also allow you to buy more miles, transfer miles to another member or gift miles to someone else. Transferring miles can sometimes give you enough miles needed for a free ticket.
Remember, the options available to you will depend on the specific rules of the airline’s frequent flyer program. Always check the airline’s website or contact their customer service for the most accurate and up-to-date information. Also, consider the value you’re getting for your miles before you decide how to use them. Some options provide better value than others.
