Hey there, it's Ernest from Trip Astute. Today we're reviewing a complex topic: travel rewards cards (light chiming music) One of the questions I get asked a lot is, "what is the best travel card for me?" It's a tough question to answer because it really depends on a lot of factors. In this video, we'll cover
some of the questions you may want to ask yourself to determine which card is
right for you. To start off, most travel reward cards
have the following features: Number one is travel benefits.
these cards have some kind of travel benefit associated with them. Things like
bag or trip protection are standard on most of these travel reward cards. Number
two is no foreign transaction fees. This is a big one.
It allows you to use your
card abroad without racking up any additional fees, which is usually charged
to regular credit cards. Number three is the EMV chip. This is now standard in the
US, but has been the standard around the world the past couple of years. It's
basically the chip that's on the front side of your card that allows you to pay
for things without having to swipe.
For simplicity's sake, I basically break down
travel cards into three major categories: Number one is co-branded loyalty cards.
Number two is flexible points program cards. And number three is flat rate
cards. We'll start with the co-branded loyalty cards. These include cards that
are generally associated with an airline or hotel brand.
There are basically
credit cards for every major hotel and airline brand out there. These cards
allow you to earn points and miles which you can then redeem for that brand. So, if
you were to use the Hilton card and earn points, you could then redeem the points
for a stay at one of Hilton's many hotels in their portfolio, which includes:
the Embassy Suites, the Hampton Inn, Doubletree Hotel, Garden Inn, etc. Examples
of co-branded loyalty cards include the Chase Southwest Rapid Rewards card, the
Citi American Airlines AAdvantage cards, the American Express Delta cards, the
Chase Hyatt Rewards card, the Citi Hilton HHonors card, the American Express Hilton
Suprass card, and the US Bank Club Carlson Rewards card.
There are actually
plenty more to list, but those are just some examples. So what
are some of the pros with these cards? For one, there is simplicity in
redemptions since you're focused on a specific hotel or airline brand. It
becomes less overwhelming than having to consider all your options. Number two is
These cards often come with some pretty incredible perks. Things
like late check-out, early check-in, priority boarding, discounts on in-flight
purchases, and lounge passes. Some will even give you a special annual bonus
like a free hotel stay or a companion pass. These can be an incredible deal.
three: higher earning rates. You'll typically get earn more points if you
use a card with that specific brand. So in the case of Hilton, if you have the
Hilton card, using it at the Hilton will earn you the most points. So what are
some of the cons? With these cards, the big one is the restriction on
You're basically limited on where you can redeem your points and
miles. While some of these cards will allow you to redeem for non-travel items
like gift cards or Amazon credit, it's typically not a good idea in terms of
value. You can also transfer the points to other vendors, however, you're often
sacrificing point value again by doing so. So what type of traveler benefits
from a co-branded loyalty card? One would be travelers who go to the same
destination and stay at the same place.
For example, someone who goes to Hawaii
and stays in the same hotel every year. Number two would be business travelers
who are restricted on where they can stay and what airlines they can use. Or
three are folks who are looking for loyalty status or specific perks, like
the free night or priority boarding. So what's my conclusion? I actually have a
few loyalty cards that I don't use but did I keep paying the annual fee.
Because I get perks like free nights stays or priority boarding. For example, I
have the IHG card from Chase which has a $45 annual fee. Now I
barely use the card. However, every year they send me a
annual free night certificate that I can use at any IHG hotel.
Last year, I used it
for stay in Vietnam in a $400 a night room. It was an incredible deal and it
motivates me to pay the annual fee every year. The next type of card that we're
going to discuss is the flexible points program card.
These include cards that belong to one of the following programs: the Chase
Ultimate Rewards program, the American Express Membership Rewards program, the
Citi Thank You program, and the Starwood Preferred Guest program. Examples of
these cards include the Chase Sapphire Preferred and Reserve card, the American
Express charge cards including the Platinum, Gold, and Green card, as well as
the Everyday cards, the Citi Prestige and Thank You Preferred and Premier card, and
the American Express Starwood Preferred Guest card.
I did a separate video on the
Chase Ultimate Rewards program and how I. Maximize my points using a variety of
Chase cards. You should definitely check it out if you're interested in the
program. It gives a fairly comprehensive review of how I earn and redeem points
in the program.
These programs allow you to earn points through a variety of
cards and then allow you to redeem them through multiple channels. The most
popular being transferring points to one of their airline or hotel partners. Since
these points are flexible, you can redeem them in a variety of ways, from full
travel experiences like a cooking lesson with a celebrity chef, to gift cards from
major retailers. Some of these programs even allow you to book travel through a
portal, much like you would through Expedia or Kayak, except that you can
redeem points to pay for the trip.
Though much like the co-branded loyalty cards,
you'll often sacrifice value if you redeem it for non-travel items. One more
note: the Starwood Preferred Guest program is technically a hotel loyalty
program, so you might be wondering why I've lumped it into this category.
The reason is even though it's associated with a specific hotel brand,
it has many of the features of a flexible point program such as the
ability to transfer points to airlines with a bonus.
I actually know several folks who use their Starwood Preferred Guest card for
rewards other than hotel stays. And for a lot of folks, Starwood points are
considered to be one of the most valuable reward currencies out there. So
what are the pros of using these cards? One would be the multiple redemption
These points offer the most flexibility when it comes to redemption
options. For example, with the Chase Ultimate Rewards program, I'll often compare the
cost of booking an airline ticket through the Chase portal versus
transferring the points and booking through the airline. I know that I can
earn at least 1.5 Cents per point using the portal, so I'll compare
to see if transferring gives me a higher value. Another benefit are the multiple
cards that can earn points.
With the exception of the Starwood Preferred
Guest card, the other programs allow you to earn points through multiple cards
and accounts. This allows you to earn points quicker. Another benefit is the
bonus categories. These cards often have bonus categories for certain types of
spending like travel, dining, or fuel purchases, allowing you to build up your
And lastly, these cards often have very strong travel protection
perks. Perks like primary car rental insurance, baggage insurance, global entry
fee reimbursements, and lounge passes are some of the valuable perks associated
with these type of cards. So what are some of the cons with these cards? One
would be the confusing earning and redemption structures. With all the
options comes confusion.
These programs can be quite complex and definitely
require a certain passion for researching and understanding the
various redemption options. Another negative is the changing partnerships.
It's not uncommon for some of these programs to lose travel partnerships
with certain companies. A couple years ago, Chase loss Amtrak as one of its
travel partners, so many folks were upset that they couldn't redeem points for
train travel. So what type of traveler benefits from a flexible points program
card? I would recommend these cards to luxury travelers who are looking for
top-tier benefits and high-end travel.
The second group of travelers that I
would recommend this to are point & miles collectors. These are folks who are
looking to earn as many points as possible through their daily
spend and bonus categories. The third type of traveler are folks who like a
lot of options when traveling. These are folks who value flexibility over
So what's my conclusion on these cards? Well, I won't lie. These programs are my favorites and are the ones that I spend the most time
researching and building. Though keep in mind that I'm a total nerd when it comes
to this stuff. The last category of cards are the flat
These cards earn points that can be redeemed at a fixed rate for
travel expenses. It's very similar to a cash back card, but instead of getting
cash back, you get reimbursed for travel expenses. For example, you might book an
airline ticket and then login to the credit card website and use points to
then clear the charge. Keep in mind that these programs often refer to their
points as miles which is different from the miles that you might earn from a
co-branded loyalty card.
Since you can't transfer the points to another program,
these are really points, which can be really confusing for new folks who are
getting into this hobby. Some of the popular cards in this category include
the Barclaycard Arrival cards, the Capital One Venture cards, the Discover
Miles card, and the new US Bank Altitude Reserve card. So what are some of the
pros for this category of cards? One is that they tend to offer general travel
protections and perks. These cards tend to have similar perks to other travel cards,
including no foreign transaction fees, global entry fee reimbursements, Wi-Fi
passes, and many more.
Another benefit is the simple earning and redemption
structures. Since you're dealing with flat rate redemptions, it's easy to
understand and utilize your redemptions. And lastly, you'll earn loyalty points
since you're purchasing the travel then reimbursing yourself afterwards. You'll
be earning points and miles from those airline and hotel programs.
So what are
some of the cons? One is the lack of redemption options. This actually might
be more of a pro than a con to you. With simplicity comes less options when
redeeming points for travel. For example, on some of my flexible point programs,
I've been able to squeeze more than three cents per point on redemptions.
Granted, it took me a lot of time and effort to maximize my
So what type of traveler benefits from a flat rate card? I would
say these cards really appeal to folks we're looking for simplicity when
earning and redeeming points. Not everyone wants to spend time researching
how to maximize their point redemptions. These cards offer a great way to get
better than average redemptions on your travel expenses. These cards are also
very appealing to travelers already invested in a flexible point program.
These cards allow you to have another option when covering miscellaneous
So what's my experience with these cards?
I think these cards are great. A lot of my friends and family use these cards,
and they seem to offer a good balance between earning rewards and great perks
for travel. The top cards in this category have great benefits and I often
use them to supplement my flexible point program cards. An example is paying for
smaller boutique hotels or train passes.
For those types of expenses, I will often
use a flat rate card since it's the easiest way to redeem points. Several
years ago, I went to a convention and I. Was eating at the hotel's restaurant for
several days. What I found was that the charges were marked as travel on my
credit card since they came from the hotel, so I could actually redeem points
toward my meals even though they weren't technically travel expenses.
I was able
to clear the charges with my Capital One Venture card. So given all the options,
which card is right for you? Well, it depends, and I suggest asking yourself a
couple of questions. One: how important are the travel perks and benefits? If
you're not planning to take advantage of the travel benefits or perks, or already
have a car that has all the travel benefits that you need, it might make
more sense to get a flat cash back card that can get you two percent without an
annual fee. That way, you can just take the two percent that you get back and put
it toward your travel savings.
Examples of these cards would be the Citi Double
Cash card and the Fidelity Rewards Visa. Number two is how invested are you in
the points hobby? If you're not looking to get too nerdy
into credit card rewards, then I highly suggest getting a flat rate card. Number
three: how often do you travel? Many flexible points program cards reward you
for spending on travel expenses. However if this isn't important to you, then I highly suggest getting a flat rate card or a
co-branded loyalty card.
Number four: where do you like to travel? If you like to
travel overseas, then you're probably better served with a Visa or MasterCard,
rather than an American Express or Discover. Number five: how do you like to
travel? Do you prefer to travel in luxury? I. Guess the question becomes would you
rather spend your points on upgraded travel or for more trips? Kind of a
quality versus quantity question. If you're someone targeting luxury travel,
then you probably want a loyalty or flexible points program card.
For me, I'm
in the latter category. I would rather be able to go to more places than to travel
comfortably with my points, so a mix of flexible point program cards and flat
rate cards works really well for me. And lastly, what are the current promotions
available? Credit card promotions change all the time, but there are often
incredible deals available. I suggest doing a Google search before you
actually apply for a card.
Some of the top bloggers will often post direct
links to promotions that aren't shown on the issuers website. It definitely pays
to do some research before you apply. Lastly, before venturing too deep into
the world of credit card points, I highly suggest that you take some time to
organize your finances. I did a video on this a while back called "Before starting
the points hobby".
I've included a link in this video, and I suggest you watch it.
This is an awesome hobby that's been very lucrative to a lot of folks, but
it's also an easy way to fall in the hole if your finances aren't in order.
What card programs do you like to use? Please share your experiences with us. If
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Until next time, travel safe and travel smart..