There are two main flavors of travel rewards cards that can get you a free seat on your next trip:
- Airline rewards cards (such as co-branded airline cards), which let you earn frequent flier miles
- Generic travel rewards cards, which let you earn generic “points” or “miles” that you use to reimburse yourself for any travel expense, including tickets on any airline (examples include the Capital One Venture and VentureOne cards, the American Express Blue Sky and the Barclaycard Arrival World MasterCard)
So which is best?
We asked some travel hackers (frequent fliers who are constantly spinning points and miles into free flights) to weigh in.
When it comes to making travel easier, co-branded airline cards are the clear winner. Generic travel rewards cards don’t provide any at-the-airport perks, but airline-affiliated cards do (as long as you’re flying that airline), often while waiving the annual fee the first year. And co-branded airline cards typically offer tempting signup bonuses that can equate to a free round-trip domestic flight once initial spending requirements are met.
“The credit cards affiliated with airlines have the upper edge when it comes to perks. Many of these cards will offer you free checked bags, priority boarding, priority security,” says Jason Steele, a credit card expert who shares rewards travel tips at Card Journalist.
If you travel in groups and check bags (common for family vacations), an airline card can save you real cash. Checked bag fees can be as high as $25 for the first bag on a one-way flight, and avoiding them can justify holding on to an airline card, even after the annual fee kicks in. Even those who fly a few times a year can get value out of airline cards, considering the major airlines generally have entry-level cards that cost less than $100 a year.
“Even if you’re a couple-times-a-year flyer, that’s maybe three checked bags that could offset most of your annual fee,” says Ryan Lile, founder of rewards travel site Frequent Flyer Academy.
The less your rewards are worth, the more you have to spend on the card to earn a free flight. In the redemption value category, airline cards can often be declared the winner – but not always.
Points or miles earned through generic travel cards generally have a predetermined redemption value — generally 1 cent each (although some cards sweeten the deal with redemption bonuses). That means if you want a $300 plane ticket for free, you’ll need 30,000 points to get that $300 statement credit.
“They fix the game and give you 1 cent per point, whereas with airline frequent flier miles, you can get a lot more than that,” Lile says.
That’s because many airline rewards programs assign a required number of miles to a rewards flight. On legacy carriers, it’s generally 25,000 miles for a domestic round trip in economy (although the amount you’ll need will increase as seat availability decreases, or on peak travel dates). If you snag a $400 flight for 25,000 miles, you’re getting a value of 1.6 cents per mile (more than the 1 cent a mile you get with generic travel rewards cards). If you redeem for international business class flights, the value you get can blow generic cards out of the water, considering the miles you need is often low, compared to the several-thousand-dollar fare.
So why are generic rewards cards so popular?
“I think it’s slick marketing, Alec Baldwin and some decently funny writing,” Lile says.” I don’t think people have time or interest to dig into the roots of [airline] programs and find the most value. So I think [generic travel] cards take advantage of that.”
Generic travel cards aren’t always a bad value, however.
“As for the value being fixed, that’s certainly true,” says Casey Ayers, author of “PointsAway: The Definitive Guide to Free Flights & Nights Worldwide.” “But you could argue that a lot of redemptions on an airline reward chart aren’t always that great.”
The crux of the matter is the cash cost of the flight.
“If you find a really cheap cash cost on a flight, a fixed-rate point system [with a generic rewards card] could actually be a good thing,” Ayers says.
For example, Ayers says, say you’re flying from Washington, D.C., to New York City. You can easily get a round trip for under $200. Or perhaps you find a cheap ticket on discount carrier, such as Allegiant or Spirit. A reward flight on a legacy carrier would still cost you a minimum 25,000 airline miles — probably a waste. You’d be better off using a generic rewards card for a $200 statement credit and saving airline miles for a trip where they’ll pack more of a punch.
So do the math. A rule of thumb: The pricier the flight, the more you’ll get out of true airline miles.
“If you’re getting tickets that are worth $700 for 25,000 miles, maybe because you’re going to a more expensive destination, like Aspen or something, you’re doing great,” Steele says. “I’ll use 100,000 American miles and book a round-trip business class ticket to Europe. That ticket’s worth $5,000 or $6,000 dollars, so I’m getting 5 or 6 cents per mile. I would need three or four times the amount of spending on an Arrival or Capital One in order to do that.”
Flexibility, availability and simplicity
Your travel rewards are useless if you can’t use them for the trip you want to take. So, in addition to potential redemption value, you’ll need to consider whether your rewards will require you to jump through hoops.
While generic miles and points may sometimes be worth less, they might appeal to some customers because of their transparency.
“With a points card, you get a monetary value up front,” says Clint Johnston, founder of travel rewards site TripHackr. “That 40,000 points is going to be $400. You know how much you have to spend. But with 40,000 Delta SkyMiles, that might not get you the flight that you want because of peak travel dates.”
Even frequent fliers with airline status can use generic cards’ versatility to their advantage, Steele points out. To keep your status (or break into the next status level), airlines usually require you to fly a certain number of miles per year – but only paid tickets (not rewards flights) count toward that number. If you have a generic travel card, you can pay for the flight, get the status-qualifying miles and then wipe out the charge with your generic miles or points. You get the qualifying miles AND the free flight.
“If you get into the mind of a business traveler, all they’re thinking about is how to get to that next status level,” Steele says.
Squeezing maximum value out of airline miles, meanwhile, hinges upon having flexible travel dates and the ability to plan months in advance, Steele says. Those who have neither may find that the miles they’ve saved won’t be enough for their trip.
“I meet these people all the time,” Steele says. “They feel terrible when they have all those airline miles and can’t use them.”
That’s not to say airline miles will gather dust in your account. There are still plenty of easy-to-reach deals.
“Availability is pretty good,” Ayers says. “It really is just people knowing about them.”
Airlines often have certain destinations that line up well with their rewards charts, Ayers says. American Airlines, for example, tends to have the best off-peak rates to Japan between October and April.
Plus, there are co-branded airline programs that offer some of the flexibility of their generic counterparts. Steele cites the Southwest Rapid Rewards program (which has an affiliated credit card that’s currently offering a sign-up bonus of 50,000 points after you spend $2,000 in the first three months). There are no blackout dates, and the miles you need for a rewards seat is tied to the cash cost of the ticket instead of being set at an arbitrary amount (meaning the number of miles you need decreases if the fare goes on sale). Better yet, there are no change fees if your plans change (other frequent flier programs will charge you more than $100 to alter a reward flight itinerary).
“I’ll book something a couple months off, and if something comes up, and I’ll change my flight and not pay a change fee,” Steele says. “Or maybe they’ll have a fare sale, and I’ll rebook the ticket and get points back in my account, and rebook at lower rate.”
Another thing to consider: Even if your miles are with a particular airline, you’re not necessarily stuck redeeming them on that airline.
“People often don’t realize there are airline alliances,” Johnston says. “So you’re not locked into one airline. You can redeem with partner airlines. You might not always be able to do it online, but just give them a call.”
Getting the best of both worlds
If earning rewards travel is your goal, there’s no reason you have to pick just one type of travel card. In fact, generic travel cards and airline cards can (and perhaps should) peacefully coexist in your wallet.
For example, Ayers says, if you book an international rewards flight with airline miles, you’re usually not getting a truly free flight. You’ll still have to pay surcharges, taxes and fees (which can total hundreds of dollars) out of pocket. Those costs are coded as travel, meaning a generic points or miles card can come to the rescue and cancel them out.
“Those cards pick up costs that aren’t covered by airline programs,” Ayers says.
And there’s another option to consider: Cards that let you transfer points into a variety of frequent flier programs. Such Swiss-army-knife cards include the Chase Sapphire Preferred, cards attached to American Express’s Membership Rewards Program and the Starwood Preferred Guest card. Membership Rewards and the Starwood Preferred Guest card are offered by American Express, a CreditCardForum advertising partner.
The Starwood card, for example, lets you transfer your points to more than 30 airline programs (often on a 1-for-1 basis), meaning you can send them where you need them without losing value.
Having so many transfer options may be overwhelming for those who crave simplicity, but “people are going to have to make a little effort or they’re going to squander the value of their points,” Lile says. “With a little research, you can maximize this stuff. Transferring to airline programs is going to give you the most value.”
You can maximize your points even more by combining sign-up bonuses, using an airline card plus a flexible points-transferring card, Johnston says. For example, if you’re saving up for a big trip to a destination that United Airlines favors, you can get the airline’s MileagePlus card (and its sign-up bonus), get the Sapphire Preferred and collect its sign-up bonus, and then transfer those points into your United MileagePlus account.
“You go from zero miles to 80,000 miles once you meet the minimum spend,” Johnston says.
Given the airlines’ tendency to change their frequent flier programs, having a card that lets you transfer to multiple programs allows you milk the high potential value of frequent flier miles without forcing you to be loyal.
“The [airline] programs make big sweeping changes every couple years or so that can dilute the value of your points,” Lile says. “So if one program does something nasty, you have other options.”
The bottom line
Generic travel points and miles provide simplicity and flexibility, while airline miles often give you better value in exchange for some research. Some cards give you a little bit of both by letting you earn generic points that can be turned into frequent flier miles. Whichever type of card you’re dealing with, the sign-up bonus, not just the earning structure, is an important factor consider. Because it often amounts to a free ticket (with co-branded cards) and a big chunk of change (with generic travel cards), it’s important to know whether your travel plans will allow you to maximize it.
Your best bet: Get a couple cards and combine their powers.
“Don’t feel like you have to choose just one program,” Ayers says. “If you want to avoid the hassle of juggling cards, that’s certainly understandable, but the way you can get extreme value out of points and miles is by combining programs. You can play them against each other and use whatever is best for each trip.”
Updated April 2017