Tag: Credit card rewards
Get The Most Out of Credit Card Rewards for Your Next Vacation
February 1, 2025

According to a survey conducted by Lending Tree, even though 87% of all credit cardholders earn rewards, nearly 70% are sitting on unused cash back, points, or miles. Regarding travel, only 12% optimized their rewards to earn a free flight or hotel stay last year. “Many people who collect rewards are doing so with a goal in mind, such as a dream vacation with their family,” says Matt Schulz, a credit analyst at Lending Tree. “As they earn, those rewards points and miles sit unused.”
While the reasons behind leaving rewards vary, many people don’t know how to use them. Understandably, cashing in rewards benefits for the first time can be intimidating, but that’s no reason to leave value on the table.
Here’s everything you need to know about earning the most travel benefits from your spending and cashing them in for priceless vacation memories.
Compare Credit Cards to Find the Best Fit For Your Goals
Take your time comparing credit cards to find one that fits your needs, and then make it your main payment method. This means comparing bonus offers and the types of rewards offered.
You’ll want to make sure you’ll be able to use the points you earn for the travel you want. A good credit score is a normal requirement to get the best travel rewards cards, which is usually at least 670. If you’re not quite there yet, you may want to focus on improving your credit first to get the best offers.
Everything to Consider When it Comes to Bonus Offers
If you’re open to getting more than one credit card, then you may want to get a few that offer the best sign-up bonuses. A sign-up bonus involves charging a certain amount of money within a specified time period to earn the cash back or points bonus. When using your rewards for travel, you would then put that cash back or points toward your next vacation, including airfare and lodging.
For instance, with a Citi Double-Cash Card, rated the third-best credit card in 2024 by Card Critics, you could earn $200 cash back or 20,000 Thank-you points after spending $1,500 within the first six months. For most people, charging $1,500 worth of expenses over six months is feasible, but your spending capability should be the top consideration when comparing bonus offers. “Sign-up bonuses can be really helpful for folks on a tight budget,” Schulz says. “Just make sure that you’re comfortable with how much you have to spend to get the bonus.”
If you find yourself trying to spend more than you normally would to earn a sign-up bonus, then the cash-back offer likely doesn’t make financial sense. As long as you think of bonus offers as something you could earn simply by paying your existing bills, then they’re a great way to earn rewards toward a vacation you might not otherwise be able to afford.
Rack up Rewards Beyond the Sign-Up Offers
Once you’ve earned your sign-up offers, you’ll want to spend as much on your credit card to continue earning rewards. When considering which cards are the best for you, you’ll want to pay attention to the rewards they offer and what kinds of purchases qualify for reward points. Many card purchases only qualify for points in certain categories, such as gas or groceries, while others only qualify with specific experiences like dining or travel.
This is why it’s so important to think about what you’re already spending money on, because the goal is to earn rewards for what you already need to buy rather than changing your lifestyle to rack up points. “No matter how lucrative the rewards, overspending to get them doesn’t make sense,” Schulz says. “The math just doesn’t work in your favor.” If you’re someone on a budget that saves by not eating out a lot, then a card that rewards you for groceries is going to be the best fit for you, while the person who eats out and hardly ever cooks at home is going to benefit the most from using a card with dining rewards.
Know the Difference Between Types of Points
Typically, credit cards work with certain airlines and hotels where you can redeem your points, so when choosing the card for you, make sure you want to use the companies where your points will be easy to redeem and worth the most value. There are three types of reward points: fixed value, variable value, and transferable points.
- Fixed value points have a clear published dollar value. For example, points might be worth one cent each when redeemed for travel rewards. The advantage of fixed value points is that you can always use your rewards for purchases that would otherwise require cash, but the downside is that there’s no way to outsize the value of your points. A $100 ticket may require 10,000 points at one cent per point.
- Variable rewards involve the cost of a hotel stay or airfare being attached to a specific amount of points, so one night at a specified hotel may cost 20,000 points, even if the cash amount of the room varies. The perk of variable rewards is knowing when to redeem them for outsized value.
- Transferable points are also known as flexible points because they can be transferred to other partner programs for redemption. You may also be able to cash in on rewards as statement credits or redeem them toward travel at a fixed rate. This variability makes transferable points desirable.
It’s easy to lose track of how many points you’ve earned, especially if you decide to earn with more than one card, so consider using a spreadsheet to keep track of your earnings. Once you’re ready to redeem your points for travel, you’ve made it the most exciting part. Simply begin with your credit card’s website, which should be your first stop in redeeming your rewards. The website should have all of the information you need to know, such as comparing cash back versus points for travel or step-by-step directions for transferable points, plus any current promotions.
Whether or not you’re on a tight budget, earning rewards that can be used toward your next vacation is something anyone who uses a credit card should be taking advantage of. As exciting as traveling can be, traveling for less is even more so. With Insureyouknow.org, you can keep track of your spending, rewards earned, and travel goals all in one easy-to-access place. Once you learn how to get the most out of your rewards, you’ll become an expert on traveling for less in no time at all.