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“Reader Questions” are now answered twice a week — Tuesdays and Thursdays — by TPG Associate Editor Brendan Dorsey.
Home rentals have seen a huge explosion of growth due to websites like Airbnb and VRBO offering easy booking online. You can book many of these homes with a credit card, but will your card earn bonus points for this purchase? That’s the question posed to us by TPG reader John:
“What kind of points does my Chase Sapphire Preferred card receive when renting a vacation home on VRBO or HomeAway?”TPG Reader John
Thanks for the question, John. It’s an important one to ask now that home rentals are becoming a popular alternative to hotels.
To answer your question specifically, unfortunately the Chase Sapphire Preferred will not earn 2x points on purchases at VRBO or HomeAway (VRBO was actually purchased by HomeAway in 2006) even though it seems like they would count as travel. Why is this? Because HomeAway and VRBO purchases don’t code as travel purchases, but rather usually code as “real estate” or “property management.” Other websites like VacationRentals.com and CyberRentals.com have the same issue, showing up under categories that aren’t eligible for bonus points on credit card statements.
If you’re booking through HomeAway, a better card to use would be the Chase Freedom Unlimited, which earns 1.5% cash back on all purchases, or The Blue Business℠ Plus Credit Card from American Express, which earns 2x Membership Rewards points on all purchases (up to $50,000 a year; then 1x thereafter). Since HomeAway was purchased by Expedia in 2015, it’s possible the online travel agency could change the merchant category code for the company at some point.
Fortunately, Homeaway’s biggest competitor, Airbnb, doesn’t seem to have this same issue. When using a card like the Chase Sapphire Preferred Card, you’ll earn 2x points on the purchase since it codes as travel. Reports indicate that FlipKey and Booking.com (which has a vacation rental section) count as travel too.
But what about other cards that earn bonus points on travel rental purchases? Surprisingly, there’s only a handful of cards that have a general “travel” bonus category:
|Card||Travel Category Bonus||Return on Spending (Based on Valuations)|
|Chase Sapphire Preferred||2x points||4.2%|
|Chase Sapphire Reserve||3x points||6.3%|
|Citi Premier Card||3x points||5.1%|
|Bank of America Premium Rewards credit card||2x-3.5x points||Up to 3.5%|
|US Bank Altitude Reserve Visa Infinite Card||3x points||4.5%|
These cards should all earn bonus points for Airbnbs. The best being the Chase Sapphire Reserve that would earn 3 Ultimate Rewards points per dollar, or a 6.3% return according to TPG’s valuations. The Citi Premier earns 3 ThankYou points per dollar on travel purchases, or 5.1% back — its low annual fee makes it an attractive card, too.
Note that the earning structure for the Bank of America Premium Rewards credit card varies based on your status with the bank’s Preferred Rewards program. If you have $20,000 or more in your accounts, you qualify for one of the three tiers and will earn a 25%-75% points bonus on all spending with the card — at the highest level (Platinum Honors), you’d be getting 3.5x points on travel purchases (a 75% bonus on the card’s 2x earning rate for travel).
So be wary of what card you’re using when reserving a vacation rental, as well as the company you’re booking with. And if you’re planning on redeeming points for Airbnb, that’s a whole other beast. You’ll want to check out our guide to The Best Travel Rewards Credit Cards for Airbnb to ensure you’re maximizing your points.
Featured image by Airbnb.
With some great bonus categories, the American Express Gold Card has a lot going for it. The card offers 4x points at US restaurants, at US supermarkets (up to $25,000; then 1x), and 3x points on flights booked directly with airlines or through amextravel.com. It is currently offering a welcome bonus of 35,000 bonus points after you spend $2,000 in the first three months.
- Earn 35,000 Membership Rewards® Points after you spend $2,000 on eligible purchases with your new Card within the first 3 months.
- Earn 4X Membership Rewards® points at U.S. restaurants. Earn 4X Membership Rewards® points at U.S. supermarkets (on up to $25,000 per year in purchases, then 1X).
- Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
- Earn up to $10 in statement credits monthly when you pay with The Gold Card at Grubhub, Seamless, The Cheesecake Factory, Shake Shack, and Ruth's Chris Steak House. This is an annual savings of up to $120. Enrollment required.
- $100 Airline Fee Credit: up to $100 in statement credits per calendar year for incidental fees at one selected qualifying airline.
- Choose to carry a balance with interest on eligible charges of $100 or more.
- No Foreign Transaction Fees.
- Annual Fee is $250.
- Terms apply.
- See Rates & Fees