Not everyone wants the same things from credit cards rewards. You might want to make travel affordable for your family. Another person might want to increase the balances in their checking account and Roth IRA. Yet another might want overwater villas in the Maldives.
Credit card rewards can help you achieve all of these things. But what your priority is will determine your strategy, what programs you pay attention to, and what actions you take.
This article will walk you though what to expect based on your priorities, whether it’s more cash in your wallet or high-end luxury travel. We’ll show you how to focus your pursuit of credit card rewards to get what you want. And we’ll also help you understand what kind of effort to expect to invest to go after the rewards that are most meaningful to you.
Priority: Cash in your wallet
If your priority is to increase the amount of cash in your bank account, focus on cash back rewards. Cash rewards are by far the simplest type of rewards. But they also provide the most option value. You can also use cash to book travel. And for almost every rewards collector, cash should be at least part of your rewards strategy.
What you need to know about cash rewards
Here is what you should focus on if you want to get the most cash in your wallet:
| Primary areas of focus. | Cash back welcome bonuses – Earn cash back rewards through new cardmember welcome bonuses on credit cards. Cash back category spending – Use credit cards that earn greater than 2% cash back rewards in the spending categories where you spend the most money. |
| Most relevant products/cards. | Cash back rewards cards – Cards that earn cash back on purchases. Transferable points programs that can be easily converted to cash – Some rewards programs can be easily converted into cash. Look at Chase Ultimate Rewards and Citi ThankYou Points. |
| Your essential wallet contains… | A 2% everywhere card – Your default card for purchases 5% cash back rotating category cards – Cards that get you bonus cash back Cards that earn bonus cash back on common spending categories like gas, groceries, and dining. |
| Want more? Look here. | Build a 5x everywhere strategy – Use your rotating category cards and bonus category cards to buy gift cards and start earning 5% cash back almost everywhere. Leverage card-linked offers and shopping portals for additional cash back on purchases. Bank of America Premium Rewards – If you have a large amount of assets you can move to Bank of America, consider going after BofA Premium Rewards. |
Priority: U.S. domestic travel
Perhaps you want to use your point for travel, but aren’t really interested in collecting passport stamps. You can use credit card rewards for U.S. domestic travel pretty easily.
Here are some things to think about if your travel priorities are largely within the U.S.:
- Do you care about airline programs? Many U.S. domestic travelers shouldn’t care about airline miles programs. If you don’t usually fly the same airline, you’re going to get better focusing on rewards that you can use to fly any airline. However, if you live in a city where one airline controls all of the schedule, or are in a situation where fly one airline most of the time, that airline’s program becomes relevant.
- Keep option value in mind. A new credit card welcome bonus on a Delta credit card might give you 50,000 miles. But once you have those miles, you can only use them for flight on Delta and its partners. What if you find yourself with Delta SkyMiles and find that tickets on United or Southwest are half the price? A focus on cash rewards and points that can be used to book any airline can keep you from getting locked in to paying higher prices.
What you need to know about rewards for U.S. domestic travel
Your travels have you staying within the United States and you want to use your credit card rewards for travel. Here’s what you need to know:
| Primary areas of focus. | Welcome bonuses on cards that earn points – Airline, hotel, or flexible/transferable points can make sense depending on your travel needs domestically. Focus on points that can be used for elevated travel when booking through a portal and transferable point programs. Category spending – Use credit cards that earn the greatest rewards where you spend the most money. |
| Most relevant rewards programs. | Airline programs – If your expected travel will be on one or two airlines, it makes sense to accumulate programs in an airline program. Most of the U.S. domestic carriers offer easily bookable reward flights on all domestic flights, at point valuations that are tied to cash prices. Chase Ultimate Rewards – You can use Chase to book air travel and hotel nights at 1.25 cents per point with the Chase Sapphire Preferred or 1.5 cents per point with the Chase Sapphire Reserve. And Chase points transfer to both United and Southwest. Transferable points programs – Once you’ve established your point balances with Chase Ultimate Rewards, look at Capital One Miles and Citi ThankYou Points primarily through a cash-back lens. If you are a Delta flyer, look at Amex Membership Rewards. |
| Your essential wallet contains… | Airline credit card – If you fly a single airline, consider holding that airline’s cobranded credit card to earn miles and for the benefits like checked bags. Chase sapphire Preferred or Reserve – If you’re earning Ultimate Rewards, you probably want to hold a Chase Sapphire Preferred or Reserve card so you can redeem your points for elevated value for travel. Cards that earn bonus points on common spending categories like gas, groceries, and dining. |
| Want more? Look here. | Build a point-focused 5x everywhere strategy – Use your cards that earn category bonuses to buy gift cards to promote most of your spending to earning greater rewards. For example, you can use the Chase Ink Cash at office supply stores to buy gift cards (including Visa and Mastercard gift cards) to get 5x everywhere. Leverage your bank’s bonus portal for additional points on purchases. |
Priority: International economy travel
If you want to travel internationally and don’t mind sitting in economy, you can get a lot of travel out of a moderate amount of credit card points. International economy travel requires only a moderate amount of effort. And it is very possible to use points to get a family of five to Europe in coach.
If you want to get international luxury travel out of your credit card points, here are some things to think about:
- Don’t forget about cash airfares. Sometimes, the best deals for traveling internationally are cash airfare sales. Off-peak to Europe under $600/person is fairly common. Remember, you can use cash back awards to book international air tickets, too!
- Focus on the transferable point currencies, starting with Chase Ultimate Rewards. Earn your credit card rewards as transferable points to get the most value out of your travel rewards. Chase Ultimate Rewards is a great place to start because points can be transferred to airline partners or used to book travel through Chase Ultimate Rewards
- Start learning international airline programs. If you want to go to Europe on the cheap, Flying Blue is a must-learn program. Air Canada Aeroplan and Avianca LifeMiles are also good options. But United is also a transfer partner of Ultimate Rewards and can be a good option for flights to Europe.
What you need to know about rewards for international economy travel
If you want international economy travel from your credit card rewards, here’s what you need to know:
| Primary areas of focus. | Welcome bonuses on cards that earn points – Focus on points that can be used for elevated travel when booking through a portal and transferable point programs. Category spending – Use credit cards that earn the greatest rewards where you spend the most money. |
| Most relevant rewards programs. | Chase Ultimate Rewards – Chase is by far the best program for you if you want international economy travel. You can use Chase points to book travel directly or you can transfer them to airline partner programs. This makes the program excellent for both cash airfares and point transfers. Transferable points programs – The major transferable points programs provide flexibility to transfer points to international travel partners. Once you’ve established your point balances with Chase Ultimate Rewards, learn how to use Amex Membership Rewards, Capital One Miles, and Citi ThankYou Points. International airline and hotel programs – In many cases, the best point redemptions in coach come from airline transfer partners of the major point programs. Look to British Airways Avios for short-haul flights on OneWorld carriers, Avianca LifeMiles for short-haul Star Alliance Awards, Flying Blue for promo flights to Europe |
| Your essential wallet contains… | A card that enables transfers to airlines partners and elevated redemption value – Most major transferable point currencies require you to carry a card with an annual fee to enable point transfers to partner hotels and airlines. In the Ultimate Rewards point ecosystem, your premium card allows you to redeem your points for travel at 1.25 or 1.5 cents per point. A 2x everywhere card – Your default card for purchases. Cards that earn bonus points on common spending categories like gas, groceries, and dining. |
| Want more? Look here. | Build a point-focused 5x everywhere strategy – Use your cards that earn category bonuses to buy gift cards to promote most of your spending to earning greater rewards. For example, you can use the Chase Ink Cash at office supply stores to buy gift cards (including Visa and Mastercard gift cards) to get 5x everywhere. Leverage your bank’s bonus portal for additional points on purchases. |
Priority: International luxury travel
International luxury travel is by far the sexiest type of credit card reward. After all, who wouldn’t want to sip champagne while flying in a seat that folds down into a bed enroute to an overwater villa in the Maldives for free? While this type of travel gets the most clicks, it requires by far the most work and commitment to earning credit card rewards.
If you want to get international luxury travel out of your credit card points, you must be prepared to do three things:
- Accumulate a large number of transferable rewards points. Usually this involves signing up for a fair number of new credit cards or accumulating points over several years.
- Learn how to use airline and hotel programs. Booking international luxury travel isn’t as simple as going to Expedia and telling it where you want to go. Searching for, booking, and (if necessary) changing award tickets can be time-consuming and it requires learning how to use international airline programs.
- Be flexible. Be agile. If you want to travel to a specific destination on a specific date, temper your expectations. High-end award travel isn’t available on every route, on every day. And, generally, peak travel times have the least award travel availability. Sometimes award seats become available a year in advance. Sometimes they become available at the last minute. Most often, award seats become available randomly and you need to be able to jump on a redemption option and finish the plan later.
What you need to know about rewards for international luxury travel
If you want international luxury travel out of your credit card rewards, here’s what you need to know:
| Primary areas of focus. | Welcome bonuses on cards that earn transferable points – You can earn the most points through new cardmember welcome bonuses on credit cards. Category spending – Use credit cards that earn the greatest rewards where you spend the most money. |
| Most relevant rewards programs. | Transferable points programs – The major transferable points programs provide flexibility to transfer points to international travel partners. And that’s how you’ll get access to high-end luxury travel redemptions. Start with Chase Ultimate Rewards, but learn how to use Amex Membership Rewards, Capital One Miles, and Citi ThankYou Points. International airline and hotel programs – In order to get the most value out of your transferable points, you will need to learn how to redeem miles through transfer partners. Flying Blue, Avianca LifeMiles, and Air Canada Aeroplan are the best places to start. |
| Your essential wallet contains… | A card that enables transfers to airlines partners – Most major transferable point currencies require you to carry a card with an annual fee to enable point transfers to partner hotels and airlines. A 2x everywhere card – Your default card for purchases. Cards that earn bonus points on common spending categories like gas, groceries, and dining. |
| Want more? Look here. | Build a point-focused 5x everywhere strategy – Use your cards that earn category bonuses to buy gift cards to promote most of your spending to earning greater rewards. For example, you can use the Chase Ink Cash at office supply stores to buy gift cards (including Visa and Mastercard gift cards) to get 5x everywhere. Leverage your bank’s bonus portal for additional points on purchases. |
