If you’re a travel rewards card aficionado, life has never been better.
In the increasingly heated battle for high-spending cardholders, card issuers are continuing to roll out tantalizing rewards and new perks for valued cardholders.
And if you have excellent credit, savings on these cards can run into thousands of dollars a year — if you play your cards right.
1. Prioritize rewards cards with partner airline programs.
One of the most important choices facing consumers looking for a travel rewards card is whether to go with a generic card or one affiliated with an airline frequent flier program.
But according to Leff, you can have your cake and eat it too. Look for generic travel rewards cards, he says, which give you the ability to transfer points to frequent flier accounts with partner airlines. This gives you maximum flexibility when it comes to redeeming rewards points.
Examples of this type of hybrid airline miles card include the Chase Sapphire Preferred card (which comes with a $95 annual fee, waived the first year). This card lets you transfer points to miles on a 1:1 basis to the frequent flier programs of major airlines, such as United, Continental, US Airways, Air Canada, Lufthansa and more than 20 other airlines.
Similarly, the American Express Premier Rewards Gold card (which comes with a $175 annual fee, waived the first year) and the American Express Starwood Hotel credit card both offer the ability to redeem rewards earnings on more than 350 airlines or transfer points to more than 30 frequent flier programs.
2. Weigh the credit score pros and cons before jumping on a new offer.
With sign-up bonuses ranging from 10,000 miles/points to 50,000 miles/points, many rewards card aficionados are not shy about applying for multiple credit cards to supersize rewards earnings each year. However, you have to know how to weigh the pros and cons and factor how a card application will impact your credit score.
“Each time you apply for a card, you get a credit inquiry,” says Dubash. “For most people, one credit inquiry will result in a six to eight point drop in their credit score.”
However, this drop in scores may be counterbalanced by other factors. “Your total amount of credit will also increase, lowering the debt-to-credit ratio, which will improve your score,” Dubash notes. “So, in the long term, you make up the credit score drop; it’s typically a temporary effect.”
Still, playing the bonus points game is not for everyone. Credit inquiries stay on your report for two years, so people planning to apply for a mortgage within the next two years are better off not applying for multiple credit cards.
3. Watch out for the big kahuna.
It’s the rewards cardholder’s version of dying and going to heaven: The 100,000 points sign-up bonanza. This year alone, the Capital One Venture card and the British Airways Visa Signature card have both featured 100,000 points/miles promotions. And experts believe we haven’t seen the last of them.
“As competition continues to heat up, these promotions are likely to get more and more common,” says Leff. “But you have to jump on them fast, because they often fill up quickly.”
Even if the offer is with an airline you don’t fly with, read up on the details before rejecting it. British Airways miles, for example, can be redeemed with British Airways’ oneworld partner airlines, including American Airlines and Cathay Pacific, among others.
4. Create a strategy to optimize rewards earnings.
To get the most out of your rewards cards, create a spending strategy to maximize earnings.
“Sometimes you’ll earn more points if you use a generic travel reward card and then transfer your points to your preferred airline instead of using your preferred airlines’ credit card,” said Dubash in an email.
For example, he notes, with the American Express Gold Delta SkyMiles card, you will earn two miles for ticket purchases on Delta and one mile for everything else.
However, if instead you use the American Express Premier Rewards Gold card, you will earn three points for airfare, two points for gas and groceries and one point for everything else. These points can then be transferred on a 1:1 basis to your Delta frequent flier account.
5. Take advantage of companion ticket offers.
Many companion ticket vouchers have hidden strings attached, which limit their value. However, companion tickets can also be a great deal.
Both Leff and Dubash recommend the companion ticket offer of the Bank of America Alaska Airlines Visa Signature card, which comes with a $99 companion ticket every year.
“This is a true companion ticket; there are no hidden strings attached to it,” says Leff. “Any seat is $99. If you live in a city served by Alaska airlines, it’s definitely worth the $75 annual fee.”
Leff recalls buying a first class ticket to Hawaii and then getting a ticket for his spouse for another $99 plus tax using the companion ticket.
For high spenders, Dubash recommends the Travel Together Ticket from British Airways Visa card, which enables cardholders to bring a companion for free on their next reward flight if they charge $30,000 or more to their card within a calendar year.
6. For the best redemption value, go for premium travel rewards.
If you’re looking to maximize the redemption value of your frequent flier miles earnings, the best value is found in international business and first class tickets, which can cost tens of thousands of dollars, says Dubash.
For example, an American Airline for a ticket to Europe will cost 60,000 miles in the off season, a $800 value.
However, for 66 percent more miles (read: 100,000 miles), you can get a business class ticket to Europe — a $4,000 value, which ismore than four times the redemption value of the regular ticket. Seat upgrades on domestic flights using miles is another way to maximize redemption value if your goal is to travel in comfort.
7. Don’t miss out on reduced mileage awards.
Many cards feature reduced mileage awards, which is another way to maximize redemption value.
For example, Dubash says, with the US Airways credit card, you pay 5,000 fewer miles for all award redemptions on US Airways. The Reduced Mileage Award program of the Citi Aadvantage card enables cardholders to shave up to 7,500 miles off redemption requirements for domestic economy tickets.
8. Don’t forget the perks.
Free checked bags, free passes to airport lounges and priority boarding. These are just the start of some of the travel perks offered by airline credit cards.
At $25 a bag, the free checked bag benefit can add up quickly, Dubash points out. And, if you’re traveling in the busy season or just happen to be on a full flight (and who isn’t, these days?), priority boarding allows for much greater comfort and ease when on the road.