Make Travel Rewards Cards Work

Travel Rewards credit cards, along with their loyalty programs, come with so many terms, conditions, limitations, and exclusions that it’s really easy to make mistakes choosing or using one. Whether you’re new to the world of travel rewards or a seasoned veteran, the following (unwritten) rules can help you avoid many common missteps.

1) Pay your balance in full every month

Most travel rewards credit cards have relatively high APRs so the interest charges you incur will most likely negate any miles or points you earn.

2) Don’t cancel a card and lose your points or miles

When you cancel a credit card you may lose any rewards (miles, points, or cash back) that you’ve accumulated. If you have a branded credit card (connected to a specific hotel or airline) what you earn automatically transfers to the program’s account so there generally isn’t a problem. But in some cases, points or miles that you’ve earned sit with the card issuer until you redeem them. This includes American Express Membership Rewards points, Chase Ultimate Rewards points, and Barclaycard Arrival Miles. If you’re considering canceling a card with this type of rewards make sure you redeem your rewards first.

3) Don’t let your rewards expire

Some loyalty programs don’t have an expiration date on rewards but many do. If your account has a certain period of inactivity (read your terms and conditions) you can lose any rewards which you have earned. Generally the time period is around 18 months but it can be shorter. If you receive rewards in the form of certificates they can come with a “use by” date also.

4) Don’t miss out on a signup bonus

Rewards credit cards frequently offer generous signup bonuses to new card members in the form of points or miles. Normally these come with spending thresholds that you have to reach within a specific amount of time ($500 or more in the first 90 days, for example). For example, the current Barclaycard Arrival MasterCard signup bonus offers new members 20,000 bonus points when you spend $1,000 during the first 90 days that your account is open. Additionally, the Barclaycard Arrival Plus MasterCard offers 40,000 bonus points after spending $3,000 within 90 days of account activation. Before you commit, ask yourself a few questions…

  • Can I afford to spend whatever amount is required to earn the bonus?
  • Will I routinely use this card?
  • Do the rewards reflect my spending habits?

If your answer is a resounding “yes”, then by all means enjoy the benefits of a great signup bonus offer.

5) Take advantage of bonus categories

If you have a rewards credit card with bonus categories – use them! Some cards offer bonus rewards on dining, groceries, or gas station purchases. This is why getting a rewards card that fits your spending habits is so important. You want to earn generous rewards on the things you buy the most. Why earn rewards at a 1% rate when you can possibly earn double or triple that amount? Case in point – the Citi ThankYou Premier Card gives cardholders the opportunity to earn three points per dollar on dining and entertainment purchases and two points per dollar on all travel expenses.

6) Don’t rule out rewards credit cards with annual fees

Many people assume that if a credit card comes with an annual fee it’s automatically a bad choice. But that’s not necessarily the case. Many rewards credit cards that charge a yearly fee also offer generous signup bonuses, great rewards, and anniversary bonuses which more than cover the cost of the membership fee. Plus many credit card issuers waive the first year’s fee so you have 12 months to decide if the card is personally worth it. For instance, the Starwood Preferred Guest American Express Card comes with a $65 annual fee which is waived for the first year. Plus, new members receive 10,000 points at signup and an additional 15,000 points after spending $5,000 during the first 6 months.