Redeeming Credit Card Travel Points: What You Need to Know

Learning about credit card rewards programs and how to redeem your credit card points is a great way to turn your daily spending into cash back or free travel. If you learn the tricks to getting the best value for your credit card travel points, you can easily save on future purchases. The best way to redeem your rewards will depend on the type of credit card travel point you’re redeeming — airline miles, hotel points or flexible travel points.

• Airline miles: Airline miles can be redeemed for flights, cabin upgrades and experiences like concerts or sporting events. You’ll typically have to redeem your miles with that airline or one of the airline loyalty program’s airline partners. Airline miles are an excellent way to get free flights with your card.
  
  See our picks for the top airline credit cards.
• Hotel points: Hotel points can typically be redeemed for free nights, room upgrades, food and drink and spa services at specific hotels and resorts. Most hotel points can also be transferred to the hotel loyalty program’s partner airlines.
  
  See our picks for the top hotel credit cards.
• Flexible travel points: Flexible travel points offer you the most redemption options. Programs with flexible travel points typically have a travel portal. You can easily use your points for things like car rentals, cruises, flights, hotel stays and vacation packages. Most of these credit cards also allow you to transfer your points to airline and hotel partners, which gives you even more choices.
  
  See all of our top travel credit cards.

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How to redeem credit card points

Most travel credit cards offer a variety of ways for you to redeem your points or miles for travel. The value of your points will vary based on how you redeem them. Here are your main redemption options:

Redeem as a travel statement credit

Different programs have different rules around redeeming rewards for a statement credit, so the exact steps for redeeming will depend on the program. In general, you’ll:

1. Book and pay for your travel with your credit card.
2. Log in to your account and make a request to redeem your points as a statement credit.
3. Or, choose a specific eligible purchase to be deleted from your statement in exchange for a certain number of points.

Redeem through the rewards program’s travel portal

Redeeming points through a rewards program travel portal is very similar to booking a trip through a regular travel portal. To redeem points, you should:

1. Log in to your online account.
2. Visit the travel portal and start shopping for the trip you want to take.
3. For each option, you’ll see the number of points required to book the flight, hotel stay or package.
4. Choose the option that works best for you — to maximize your points, look for options that fit your travel plans and require the least number of points.

Transfer to an outside loyalty program

Many travel credit cards offer a long list of transfer partners. You can transfer your points into the various airline and hotel loyalty programs, then redeem the points or miles as allowed by that program. To transfer points, you’ll:

1. Log in to your online account.
2. Select your eligible card.
3. Choose your transfer airline or hotel partner.
4. Enter your airline or hotel loyalty member number if applicable.
5. Enter how many points you want to transfer.
6. Review the details and submit.

Redemption options by rewards program

Each credit card, hotel loyalty program and frequent flyer program offers an array of ways you can redeem your points or miles. Here are the redemption options for some major credit cards and programs:

What is the best way to redeem credit card points?

Generally, with a travel rewards credit card, you’ll find the best value when you redeem your points for travel or transfer points to a travel partner.

How to maximize credit card travel points

1. Sign up for a credit card with a sign-up bonus

If you’re new to the rewards game, get a head start by taking advantage of sign-up bonuses. These bonuses typically offer new cardholders a cache of points or miles for opening a card and spending a certain amount in a specific period.

A sign-up bonus may be worth hundreds of dollars in travel. According to a recent LendingTree survey, the average sign-up bonus on a new points or miles credit card is 51,027 points, while the median is 45,000. If you’re wondering how to get free airline tickets with a credit card, this is one of the top tricks.

2. Decide how you want to redeem points in advance

Planning ahead is key to getting maximum value from your rewards. If you start by deciding with a goal in mind, it’s much easier to choose a credit card that’ll allow you to reach that goal. If you choose the wrong card, you may not be able to redeem your points for the reward you want, or you may be forced to choose a less valuable redemption option to reach your goal.

For example, if you’re looking to use credit card points to finance your next flight, you’ll want to get a travel card that’ll get you the best value when it’s time to make the purchase.

3. Learn the ins and outs of your rewards program

If you ask any rewards expert how they travel free with credit card miles, they’ll tell you to learn the nuances of your rewards program. Here are questions to keep in mind when you’re reading the terms and conditions:

• How do you redeem travel points with the program? See which redemption options offer excellent value, good value and poor value.
  As a general rule, flights and hotel stays tend to offer good value, while gift cards and merchandise are notorious for poor value — still, values do vary by program.
• Are there any blackout dates or other restrictions on when or how you can redeem rewards? If so, see what the restrictions are and how they work. Your rewards won’t do you much good if you can’t use them for the dates you want to travel.
• How hard is it to find award seat availability? You might want to try shopping around for award travel before you’re ready to book, so you can get used to the way the process works.
• Who are the transfer partners, and what are the rules for transferring your points or miles? See how long a transfer takes and what the transfer ratio is. You should also see if there’s a transfer bonus, which can increase the value of your points even more.
  You’ll want to look for a transfer ratio of at least 1:1, so your points don’t become less valuable in the transfer.

4. Know the average value of your rewards program’s points/miles

You should get familiar with the value of a rewards program’s points or miles. This’ll give you an idea of how far you can stretch a program’s points, and will also tell you if a particular redemption is above or below average in value.

Start by taking a look at our valuations of the currency (points or miles) of major rewards programs:

5. Find the sweet spots in your rewards program

Every rewards program has its “sweet spots” — redemption options that offer a particularly good value. Experts who frequently travel free with credit card miles always keep these deals in mind when planning award travel.

So how do you find these sweet spots? Start by checking the program’s award chart, which lists the different redemptions and how much they cost in points or miles.

Example

The American AAdvantage chart includes round-trip, off-peak economy flights to Europe for about 50,000 miles.

At the time of writing, United Airlines offered a great flight deal from the United States to Denmark for around 42,000 miles.

It’s also a good idea to keep an eye out for special deals. Many programs will run award specials where you can get a bargain redemption for a lower “price” than normal. You may get emails or other messages from your credit card company alerting you to deals.

6. Do the math before you redeem

Quickly calculate the value of a redemption to see if you’re getting a good deal. In general, you’ll want to aim for redemption values of at least 1 cent per mile.

How to calculate the value of my points

Cash price* ÷ Number of points needed for redemption = Points value

*Check to see if taxes and fees are included in your award

To do the calculation, you’ll need to know the cash value of the item you’re getting, whether it’s a flight, a gift card or a hotel stay. If you’re getting a gift card with a face value, it’s easy. Otherwise, you might have to do a little legwork to find the cash value — for example, researching the cash price (minus taxes and fees) of the flight you want to get with your miles or looking up the price of a hotel stay.

Example

You want to use your rewards to book a flight to the Bahamas. It would cost you 30,000 miles for a flight that normally costs $500.

$500* ÷ 30,000 = 1.7 cents. So the redemption value for the plane ticket would be 1.7 cents per mile. This is a good redemption value — go ahead and book it.

7. Be as flexible as possible

When searching for flights online, have you noticed that when you check the “flexible dates” box, you can sometimes get a much better value just by leaving a day earlier or extending your stay by a day? The same principle applies with award travel. You can often make your points and miles go further simply by being flexible.

For example, a Marriott award stay can cost twice as much in peak season versus off-peak season. So consider planning your vacation a month earlier or later to take advantage of off-peak pricing, or fly midweek and check prices for flying into different airports.

While searching out the best values can be fun and lucrative, you’ll also need to consider your wants and needs. By taking the trip you really want to take when you want to take it, even if it doesn’t give you maximum value for your points, it may still be the right choice for you.