Travel Reward Credit Cards 101

If you love to travel, then travel reward credit cards are absolutely awesome. Not only can you get free flights and free hotel stays, you can also fly for free in first class and stay in 5-star resorts, as well. While regular cash back cards generally reward you with 1 cent per dollar spent, travel reward cards can get you 2, 3, 5, and sometimes as much as 20 cents per dollar.  How is that possible?

We’re getting there.

Let’s say, you want to fly between New York and Chicago. The lowest point redemption within the Continental US on most major US airlines like United, Delta, US Air, and American,  is 25,000 miles. If the roundtrip ticket between New York and Chicago can be purchased  for about $250, then you can say that you redeem your flight at 1 cent per dollar. If it costs more in cash—you’ve done better, and if it costs less, then you’ve done worse.

However, not all airline programs calculate your awards like that. British Airline Avios, for example, is a distance based program, and it clocks the award for this particular route at only 15,000 miles. It doesn’t mean it’s always cheaper to use British Avios than the frequent flyer miles from the above-mentioned airlines, but it does mean you should do your homework in order to maximize your profit.

But wait, you might say. How am I supposed to use British Airways to fly between two American cities? You can—and this is one of the most advantageous points of frequent flyer programs—because both British Airways and American Airlines belong to One World Alliance, and you can redeem miles collected on one airline to fly on another.

Right now you can sign up for Citibank American AAdvantage card and get 50,000 miles as a sign up bonus (it’s not a public offer, but if you look around my website you’ll find just the right link). That will get you two flights between NYC and Chicago, and it’s great. But you can also sign up for Chase British Airline credit card and get the same 50,000 Avios, only these Avios will get you three flights between NYC and Chicago instead of two.  Easy, right? Best of all, you are getting this incredible value before even taking a single flight!

Think about it. In order to earn 50,000 miles in most programs, you would have to fly 50,000 miles on an airline of your choice or spend $50,000 on your credit card. However, with a single sign up bonus, you’re  getting these 2-3 flights a silver platter.  Amazing, isn’t it?

So how do you get up to 20 cents per dollar? By redeeming your miles for really expensive city pairs in the first class seat, for example between the US and South East Asia on Cathay Pacific. That flight is pure luxury and indulgence, and it will cost you 135,000 miles. That sounds like a lot of miles, right? However, if you pay hard cold cash for the same flight, it could cost you over $25,000. See? Math doesn’t lie.

Although, we would have to remember that while math doesn’t lie, people can be easily carried away. So if you would never ever pay for the first class ticket out of pocket, then there are no real savings there. You would just blow a lot of miles on one trip instead of using them on several vacations. Unless, of course, this is a special event, like a honeymoon or something, in which case it’s worth every single frequent flyer mile and then some.

This is a guest post by Andy Shuman, a credit and travel expert. He writes and blogs at during and between trips that he enjoys free of charge mostly due to creative use of credit card offers. He’s an author of bestselling books from Lazy Traveler Handbook Series available on Amazon. When he’s not traveling, he lives with his beautiful wife and daughter in Brooklyn, NY.

Image thanks to  Kuster & Wildhaber Photography on Flickr.


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