How do travel credit cards work?
Editor's Note
If you're unfamiliar with the world of credit card rewards, you're probably wondering why there are so many card offerings with benefits and perks focused on travel. Travel credit cards make up a healthy chunk of the financial space and can get you serious value on your next big trip or flight when used to their full potential.
Read on to see how these cards work and what kind of travel credit card best suits your needs.
How travel credit cards work
Unlike cash-back cards, travel credit cards earn rewards as issuer "points" or "miles" that are racked up as you make purchases with your card.
Travel cards can be used like any other card, but they also offer valuable earnings rates (e.g., 3 miles per dollar spent or 5 points per dollar spent) in specific spending categories like groceries, restaurants and gas. These points or miles will be calculated and added to your card account for later use.
Many travel cards also offer valuable perks like free checked bags, priority boarding and statement credits for services like TSA PreCheck, which can be valuable if you travel frequently or even only a couple of times a year.
Related: 7 of the best starter travel credit cards
What are the types of travel credit cards?
The three main types of travel cards are airline, hotel and general travel cards.
As you might guess, the first two types are cards issued specifically by airlines and hotel chains. If you're loyal to a particular brand, it might make sense to look into its card offerings and earn rewards for its particular loyalty program.
If you're looking for more flexible rewards, you can opt for a general travel rewards card that isn't tied to a specific hotel or airline brand. These cards, like airline and hotel cards, are issued by major banks like Chase, American Express and Citi, but they offer more versatility since their points and miles can be transferred to multiple travel partners.
Related: When does it make sense to spend on a cobranded credit card?
Points and miles overview
Once you've accumulated a good amount of rewards with an issuer, you can redeem them for various travel-related expenses. The type of rewards you earn will depend on the type of card you get.
The best way to redeem your points or miles is usually to transfer them to one of the airline or hotel partners affiliated with the card issuer. We recommend using your points or miles for flights, especially if you have a big vacation or scheduled flight coming up.
Related: Credit cards 101: The beginner's guide
How to maximize your value
When earning points, you'll want to make sure you're doing two things. The first is taking advantage of your card's earning rates in different spending categories — such as travel, restaurants, gas and groceries — to rack up as many points as possible.
The second is taking advantage of your card's welcome offer. This is usually a significant number of bonus points or miles you can earn if you hit a specific spending threshold within a certain time period after opening a new card. For example, a valuable card might offer upward of 50,000 points or miles if you spend a few thousand dollars with your card in the first three or six months.
Hitting your welcome bonus can supercharge your earnings and, in some cases, pay for your next big flight several times over.
Related: Maximizing credit cards to become points-rich without spending a ton
Bottom line
Even if you aren't a frequent flyer, travel credit cards can offer you substantial value, provided you follow a few simple steps and take advantage of the card's earning rates and welcome bonus.
While we understand that not everyone can squeeze every dollar out of a premium travel credit card, there are plenty of offerings for everyone that can make your next excursion a little bit cheaper and, hopefully, more enjoyable.
Related: The best overall credit cards
TPG featured card
at American Express's secure site
Terms & restrictions apply. See rates & fees.
| 4X | Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 4X | Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year. |
| 5X | New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App. |
| 3X | Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines. |
| 2X | Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com. |
| 1X | Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases. |
Pros
- Valuable dining and food-related credits
- Flexible rewards with airline and hotel transfer partners
- Multiple travel and purchase protections
- No foreign transaction fees
- Access to Amex Offers for additional savings (enrollment required)
Cons
- Not as useful for those living outside the U.S.
- Some may have trouble using Uber and other dining credits
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you’re approved and find out your exact welcome offer amount – all with no credit score impact. If you’re approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- New! Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You’ll know upfront exactly how much you’ll pay.
- Updated! $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That’s up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin’ locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- New! As an American Express® Gold Card Member, you can enjoy complimentary Hertz Five Star® Status. Enjoy benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Take advantage of a $100 credit towards eligible charges* at over 1,300 upscale hotels worldwide when you book The Hotel Collection through AmexTravel.com or the Amex Travel App **. *Eligible charges vary by property. **The Hotel Collection requires a two-night minimum stay.
- Book your travel through the Amex Travel App with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.