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With so many great points and miles credit cards available, it can be hard to know where to start. With newer award travelers in mind, TPG Senior Points & Miles Correspondent Jason Steele walks through several popular redemption goals and outlines the best credit cards for each of them.
Are you new to the award travel game? Don’t worry — we’ve all been there. One of the first things you’ll learn about this hobby is that the best cards to use will depend on the type of award travel you have in mind.
In today’s post, I want to look at six different award travel objectives, from traveling during peak times to redeeming for premium-cabin tickets, and offer some credit card suggestions that will help get you there.
1. Domestic holiday travel
The holidays are always a peak travel time, and domestic flights before and after major holidays can be some of the toughest awards to book with traditional frequent flyer miles. If you’ve tried to redeem your rewards for holiday travel, perhaps you’ve learned the hard way that the airlines will typically charge double or even triple for these award flights.
In response to cardholder frustration with these programs, there are now many credit cards that offer points or miles worth a fixed amount toward the price of a ticket — typically one cent per mile. Just be sure to book your flights as far in advance as possible, as ticket prices rise sharply as the holidays approach.
- The Capital One Venture Rewards Credit Card offers double miles on all purchases, and each mile is worth one cent as a statement credit toward travel purchases. There’s a $59 annual fee, though it’s waived the first year.
- The Barclaycard Arrival Plus World Elite MasterCard also earns double miles on all purchases, which are worth one cent each as statement credits toward travel expenses. In addition, cardholders receive 5% of their redeemed miles back toward their next redemption. There’s an $89 annual fee for this card, which is waived the first year.
- The newest entry in this category is the Discover it Miles card, which offers 1.5 miles per dollar spent, and again miles are worth one cent each toward travel. Discover will double the miles earned by new cardholders in their first year of card membership. This card also features a $30 annual statement credit toward in-flight Wi-Fi purchases, and there’s no annual fee.
- The Citi Prestige Card can make sense for holiday travel, as it allows you to redeem points for 1.6 cents apiece toward flights on American Airlines/US Airways. And since you can earn 3x points on air travel and hotels and 2x points on restaurants and entertainment, you can accumulate rewards very quickly. There’s a steep $450 annual fee, but that’s offset by perks such as Admirals Club access and an annual $250 airline credit.
Alternatively, you can use a credit card that offers points and miles in an airline program with a revenue-based award system. With Southwest and Virgin America, for example, the number of miles required for an award flight corresponds to the price of a paid ticket.
- The Southwest Rapid Rewards Premier Credit Card offers points in Southwest’s Rapid Rewards program, which are worth at least 1.3 cents each toward flights in the lowest fare class. This card really makes sense if you hold the Companion Pass, as it doubles the value of these points. (For more information on the Companion Pass, read TPG’s post on How To Get the Southwest Companion Pass for 2015/16 and my post on 16 Things Every Flyer Should Know About the Southwest Companion Pass.) If you plan to fly Southwest, also consider the Chase Sapphire Preferred Card and Ink Plus Business Card, both of which earn Ultimate Rewards points that can be transferred to Southwest.
- The Virgin America cards from Comenity Capital Bank offer points in Virgin America’s Elevate program, which can be worth over two cents each toward award tickets. Also, consider the Amex Everyday Preferred Card from American Express, or any other Amex card that’s part of the Membership Rewards program, as these points can be transferred to Virgin America. Just make sure that Virgin America offers service on the routes you need before you transfer, as the carrier has a relatively limited route map.
2. International business class tickets
Premium-class award travel to overseas destinations is a great way to use your traditional airline miles, since the purchase price of these tickets can be extremely high. A $5,000 round-trip business-class ticket to Europe on American Airlines will cost you 500,000 miles with Capital One, Barclaycard or Discover, but can cost just 100,000 AAdvantage miles. So even when one of these cards offers double miles on all spending, it can’t match the value of a traditional airline mileage card.
If you already have some miles with a particular airline program, you may want to leverage this head start by getting the carrier’s co-branded credit card, such as the Citi AAdvantage Platinum Select MasterCard or the United MileagePlus Explorer Card from Chase. As for Delta, a series of massive devaluations means the SkyMiles program is a poor choice for most business-class award travel, especially if you’re a beginner. For more about this situation, see TPG’s post on Delta’s latest developments.
The other, more advanced strategy is to use a card that allows you to earn points that can be transferred to multiple carriers. These include the Starwood Preferred Guest Credit Card from American Express, as well as cards that earn points with Chase Ultimate Rewards, American Express Membership Rewards and Citi ThankYou Rewards. Just note that this approach takes additional skill and planning to find the best use of your points, transfer them and book your award.
3. Mexico/Caribbean/Central America
These destinations are popular among award travelers, as they can be far less expensive than trips to Europe or Asia, and the travel time is much shorter.
For these awards, I’d again focus on cards that are part of the fixed-value programs, such as the Capital One Venture Rewards, Barclaycard Arrival Plus and Discover it Miles. These will allow you to take advantage of discount carriers that serve this region, such as JetBlue, Spirit and Frontier — none of which have especially compelling frequent flyer programs or co-branded credit cards.
Southwest serves a small but growing number of destinations in this region, so it might be worth earning Southwest Rapid Rewards points from the Southwest credit cards, or earning and transferring points with the Chase Sapphire Preferred and Ink Plus.
4. International awards in coach
As much as I enjoy traveling in business class, there are some compelling reasons to choose coach awards, like the lower cost in miles and the greater availability of award seats, especially for families and other groups traveling together. Plus, once you take your first flight in business class, it can be very hard to revert back to coach.
Choosing the best cards for these awards will depend on your desired route. For example, a New Yorker who wants to visit London, Paris or another major European city will find many highly discounted flights for sale, especially outside of the peak summer season. When transatlantic fares are available for less than $1,000, you won’t get the most value out of your miles if you book an award flight. Plus, you could be earning miles and credit toward elite status when you buy a ticket (even when you pay for it using miles from your Capital One Venture Rewards, Barclaycard Arrival Plus or Discover it Miles card).
Using points and miles makes more sense if you’re, say, traveling to Europe from the West Coast or between smaller cities during a peak travel time — then, your economy class ticket could easily cost $2,000 or more. To get the best of both worlds, consider a card that earns points that can be transferred to your favorite carrier. For example, points from the Starwood Preferred Guest program and the Amex Membership Rewards program will transfer to Delta. You can also transfer points from Starwood to American, and from Chase Ultimate Rewards to United.
5. Low- to mid-level hotel awards
While airfare is typically the largest travel expense, hotel awards can also take a big chunk out of your trip costs, and they’re much easier to redeem than award flights. If you’re not set on the fanciest accommodations, these credit cards could help you earn free nights at low- to mid-range properties:
- Starwood Preferred Guest Card from American Express — Award nights at Starwood hotels start at just 2,000 points, though you’ll find a larger selection of awards in the 3,000 – 7,000 point-per-night range, including Sheraton, Four Points and Aloft properties.
- Hyatt Card from Chase — Hyatt’s Gold Passport program offers plenty of Hyatt Place and Hyatt House properties for 5,000 and 8,000 points a night, respectively. The Hyatt card also grants you immediate Platinum status, so you’ll be eligible for room upgrades and other perks. Finally, you can transfer Chase Ultimate Rewards points to Hyatt, so the Chase Sapphire Preferred and Ink Plus cards are also great for earning these points.
- Wyndham Rewards Visa from Barclaycard — This card has become very valuable now that Wyndham is charging a flat 15,000 points for award nights at any property. While Wyndham does offer a few luxury hotels (and plenty of motels), there’s real value in the brand’s mid-range properties. Since this card offers 2x points for every purchase, you’ll earn a free night after spending just $7,500. For more information, read my post on Why the Wyndham Rewards Visa Is Now a High-Value Hotel Card.
6. Luxury hotels
Many of the programs that offer the best redemptions for low- to mid-level properties can be a poor value for awards at premium properties. For example, Category 7 Starwood properties cost 30,000 points per night, which isn’t a great use of these very valuable points.
- Hyatt Card from Chase — This card offers decent value for both mid-range and high-end hotels, the latter of which are typically 20,000 or 25,000 points per night. Additionally, the card’s sign-up bonus is two free nights at any Hyatt property (after $1,000 in purchases within three months of account opening), which is perfect when you want to stay at a luxury hotel in a major city.
- Hilton credit cards — The Hilton brand includes some impressive luxury properties, such as the Waldorf Astoria, Conrad and Hilton Resorts. While award nights for these hotels require tens of thousands of points, there are four different credit cards to help you earn them. Citi offers the Hilton HHonors Reserve Card, which earns 5x points on all airline and car rental spending and 3x points on all purchases, and the Citi Hilton HHonors Visa Signature Card; while American Express has the Hilton HHonors Card and the Hilton HHonors Surpass. All these cards grant you some level of elite HHonors status, which enables you to receive your fifth night free after four consecutive award nights.
What’s your favorite use of points and miles?
Even after the introduction of the Chase Sapphire Reserve, the Chase Sapphire Preferred is still a fantastic choice if you want to avoid the Reserve’s $450 annual fee, earn 2x on all travel & dining and earn a 50,000 point sign up bonus.
- Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
- Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
- 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
- Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
- No foreign transaction fees
- 1:1 point transfer to leading airline and hotel loyalty programs
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
- No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards