Travel Rewards Credit Cards – What? Who? Why?

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I write this blog for a whole variety of reasons and one of them is because I’d quite like to see a lot more people enjoy the kind of travel I enjoy. The travel that is less of a chore or test of endurance and more of an early start to the vacation.

I know some extremely intelligent people who, for one reason or another, don’t seem to be able to grasp just what they’re passing up when they don’t participate in at least some of the numerous loyalty programs out there. The most common excuse I hear is that it takes too much effort to collect miles and points, but that’s just nonsense.

Firstly, loyalty programs have a 2 minute sign-up process and they don’t cost anything to join – where’s the effort in that?

Hilton HHonors Loyalty program

Secondly, collecting points only requires an effort if you’re doing it to the extent that an avid miles & points collectors does it. But no one is saying that everyone has to put that kind of effort in. It’s perfectly simple to add miles & points collecting in to your normal spending routine with almost no effort at all. So the excuse that it takes “too much effort” just doesn’t fly.

For most people, the way to collect miles & points without altering their normal routine is by using a travel rewards credit card.

Before I carry on let me just re-itterate that, at the time of writing, Traveling For Miles doesn’t have relationships with any banks or credit card companies. Whether readers take this information on board and act on it or ignore it completely doesn’t make any financial difference to me whatsoever. This is just about getting information out there in an unbiased way.

What Is A Travel Rewards Credit Card?

Travel rewards credit cards are cards that, in return for putting spend on the card, will:

  • Earn you miles/points in an airline’s loyalty program
  • Earn you miles/points in a hotel chain’s loyalty program
  • Earn you points in a rewards system that then allows you to either transfer those points into an airline/hotel loyalty program or to redeem them for travel itself.

Most major airlines will have a co-branded card (e.g. United Milage Plus Explorer Card in the US or the British Airways credit cards in the UK) as will hotel chains (e.g. Hilton HHonors Amex in the US and the IHG Visa card in the UK). In the US credit card companies like Amex, Chase and Citi will also offer their own points programs whose currencies can be converted into miles and points and these can be a great fit for anyone not wedded to a single airline or hotel chain.

Delta Co-Branded Amex Cards

What cards are available to you will vary significantly from country to country and from credit score to credit score but most people reading this blog should have access to a reward-based credit card of some sort.

Who Should Consider A Travel Rewards Credit Card

Quite simply, with a few exceptions that I will get into in a bit, anyone who enjoys traveling should hold at least one travel rewards credit card.

Miles and points can be used to save on airfares and hotel costs and, contrary to often parroted opinion, you don’t have to save up for premium class travel if you don’t want to. Yes, you often get the best value out of airline miles when you redeem them for premium cabin travel but there are plenty of times when they can be used to save money off regular Economy Class travel too.

As far as I’m concerned, if you’re using your miles to bring down the cost of a family vacation (and therefore keeping cash in your pocket) that’s just as valid a use of them as a luxury business class ticket on Etihad.

Who Should Stay Away From Travel Rewards Credit Cards?

If you don’t pay off your credit card every month, religiously, you should avoid travel rewards credit cards at all costs. They’re a terrible idea for you. These kind of cards almost always come with higher interest rates and late payment penalties that non-rewards-earning cards, so any savings you may garner from the miles and points you collect will be wiped out (and more!) by the increased costs you’ll incur.

Put simply, they’re a great way to get yourself even deeper into debt than you already were. If you don’t pay off your card every month these are a losing proposition for you – stay away!

Why Should You Bother?

As long as you’re not using the travel rewards credit card to make purchases you wouldn’t otherwise have made, why not earn miles each time you shop? On top of that, some of the travel rewards credit cards will give you a nice sign-up bonus to get you started (usually after you spend a certain amount on the card in the first few months of having the card) and that is often enough for a low-level reward all in itself.

If you’re paying off your card each month and if you haven’t changed your spending habits then the miles & points you’re earning aren’t physically costing you any money (yes, there’s something called an opportunity cost but I’ll go into that in my next post when I discuss pitfalls).

If you’re not currently earning cash back, miles, points or some other reward from your credit card then the chances are you’re leaving money on the table every time you shop….and that’s just silly! If you’re going to use a credit card shouldn’t you at least be using one that gives you something back?

Keep an eye out for a companion post to this one in which I discuss the pitfalls of travel rewards credit cards.


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