Holly D. Johnson | (TNS) Bankrate

Travel credit cards make it easy to earn rewards — usually offered in the form of points or miles — for certain types of purchases. You can typically redeem your travel rewards for the big expenses associated with your next trip such as flights, hotels, car rentals and vacation packages. Some issuers also let you redeem travel rewards for statement credits and other non-travel options.

Some travel credit cards are associated with a specific airline or hotel loyalty program, whereas others let you earn rewards within a credit card’s rewards program. At the end of the day, you’ll want to understand the type of travel rewards your card offers, as well as available redemption options before you sign up.

Regardless of which type of card you choose, becoming a savvy travel rewards credit card holder can help offset travel costs and enhance your overall travel experience.

Types of travel credit cards

No matter your spending habits and rewards preferences, there’s likely a travel credit card that fits. Top travel credit cards include flexible rewards cards and those that are co-branded with another program, such as hotel credit cards and airline credit cards.

Flexible travel credit cards

Flexible travel cards offer a wide range of options. These cards typically earn rewards points within a credit card issuer’s own rewards ecosystem as opposed to an airline or hotel’s loyalty program. Though options may vary by card, you can usually redeem your rewards for travel through a portal or transfer points to an array of partner airline and hotel programs. The flexibility makes them a good fit for cardholders who don’t have allegiance to any particular airline or hotel chain. General travel credit cards can also come with some pretty nice benefits, which may include airport lounge access or travel insurance protections.Some examples of flexible credit card rewards programs or points currencies include American Express Membership Rewards, Capital One miles and Chase Ultimate Rewards, all of which have their own selection of cards for consumers and businesses.The Capital One Venture X Rewards Credit Card is one example of a flexible travel rewards card. It earns 10X miles on hotel and rental cars booked through Capital One Travel, 5X miles on flights booked through Capital One Travel and 2X miles on all other purchases. Those rewards can be redeemed through the Capital One Travel portal or transferred to one of Capital One’s travel partners.

Hotel credit cards

Co-branded hotel credit cards involve a partnership between a credit card issuer and a particular hotel chain. These cards typically earn a high rewards rate for booking hotel stays with the brand’s portfolio, and the points you earn can be redeemed for hotel stays, room upgrades and other hotel-related perks.For example, the Marriott Bonvoy Brilliant® American Express® Card earns 6X Marriott Bonvoy points on eligible purchases at hotels participating in the Marriott Bonvoy® program, 3X points at restaurants worldwide and on flights booked directly with airlines as well as 2X points on all other eligible purchases. You can redeem points for future stays at Marriott properties or for purchases with the brand and its partners.Many hotel credit cards offer automatic elite status (with higher annual fee cards typically granting higher status), as well as perks like early check in, late check out or free anniversary nights for cardholders.

Airline credit cards

Airline credit cards are also considered co-branded since they let you earn rewards within a specific frequent flyer program. An example of a co-branded airline card is the Delta SkyMiles® Gold American Express Card, which earns 2X miles at restaurants worldwide (including takeout and delivery in the U.S.), U.S. supermarkets and on purchases made directly with Delta and 1X miles on all other purchases.When you sign up for a co-branded airline credit card, you can redeem the miles that you earn for flights, cabin upgrades and other airfare-related purchases, like lounge membership. Some programs offer non-airfare-related redemption options like hotels or vacation packages, though these typically provide worse value than redeeming points for an award flight. Other benefits of airline credit cards can include free checked bags and priority boarding. If you travel with a specific airline more than once per year, the added perks to your trips could make it worth your while.

How to redeem points and miles

Once you’ve met the requirements for a hefty welcome offer or earned enough miles to cover your next flight or hotel stay, how do you redeem them? The kind of travel card you have and its respective rewards program determine how you can apply those rewards. If you have a hotel or airline credit card, you can typically only redeem those points with their respective loyalty programs, with a few exceptions. However, there are more ways to redeem flexible travel rewards, like booking through your card issuer’s online travel portal or transferring your points or miles to an issuer’s travel partners.

Redeeming rewards on an issuer’s online portal

Your card issuer will typically have a portal on its website that lists redemption options and points values. Examples of redemption options include statement credits, travel purchases, gift cards and cash back.

Rewards programs typically use a 1 point:1 cent conversion rate, meaning every 100 points or miles is worth $1. Some issuers, like Chase, also offer boosted points values or other perks for travel purchases made through their online portal. To get an idea of how much your points and miles are worth, take a look at Bankrate’s points and miles valuations page for an in-depth look at airline, hotel and credit card program rewards values.

To redeem your rewards on an issuer’s online portal, log in to your account and locate the appropriate rewards or travel section.

Other ways to redeem points and miles

Some credit cards allow you to redeem your points and miles for things like statement credits, cash back, gift cards or other merchandise. This is usually the least valuable way to redeem your points and miles so you’d be better off using them towards travel most times.

Use your card responsibly

The most important rule of using a travel credit card is to always pay your bill on time and in full and never carry a balance if you can help it. To do this, make sure you never charge more than you can afford to pay off each month, and don’t let the prospect of rewards cause you to overspend. Credit card rewards aren’t worthwhile if you’re going into debt or racking up interest charges and fees to get them.

Don’t miss out on a sign-up bonus

Many travel credit cards come with generous sign-up bonuses requiring you to spend a certain amount within the first few months of opening the account. Although these bonuses are often an attractive incentive to apply for a card, make sure the spending requirement is realistic for your budget and travel plans before you choose a travel credit card. You don’t want to end up in debt for the sake of earning extra rewards.

Pay attention to a card’s fees

Credit card fees don’t directly affect the rewards you earn, but the cost of the fees does affect a card’s overall value to you. Take note of all the fees associated with any card you’re interested in getting.

One of the biggest fees to watch out for with travel credit cards is the annual fee some cards charge. Not all travel cards come with an annual fee, but those that do can range from an approachable $95 to $695 (or more). If you’re interested in a travel card that has an annual fee, be sure that the rewards and benefits will offset the cost. Otherwise, consider our list of the best travel credit cards with no annual fee.

Travel rewards cards for beginners

When you’re ready to earn rewards, it’s best to start with a beginner-friendly travel card so you can get the hang of things. Here are our picks for beginner travel rewards credit cards:

—Discover it® Miles. Earn unlimited 1.5X miles on all of your purchases without an annual fee. With a simple rewards structure and a mile-for-mile match on all of the miles you earn at the end of your first year, you’ll find plenty of ways to make the most of this flexible travel rewards card.

—Capital One Venture Rewards Credit Card. Get flexible travel rewards that are easy to use and understand, for a modest $95 annual fee. Earn 2X miles on all purchases and 5X the miles on hotels and rental cars booked through the Capital One Travel portal.

—Bilt Mastercard®. If you want to earn travel rewards by paying your rent, the Bilt Mastercard has you covered. Earn 1X points on rent (up to 100,000 points each year) without any transaction fees, 2X on travel and 3X on dining. Plus you’ll access exclusive benefits on the first of every month as part of Bilt’s monthly “Rent Day” promotions.

—Chase Sapphire PreferredⓇ Card. If you’re looking for your first travel credit card, but it’s not your first time using a credit card, the Sapphire Preferred offers tons of cardholder perks and high rewards on travel and everyday categories like dining. For $95 per year, you’ll benefit from a $50 annual hotel credit through the Chase Travel portal, a solid lineup of travel protections and 25% more value when you redeem your points through Chase Travel.

These might not be your forever cards, but they’re a good starting point for learning how travel credit cards work. They’ll also help you get familiar with earning, redeeming and eventually maximizing travel rewards.

The bottom line

To make sure a travel credit card is ultimately worth it for you, be sure to select a card that rewards you for the type of purchases you make most often or the categories you spend the most in. Ideally, it won’t charge a fee that costs more than you’ll earn in rewards. If you’re ready to jump into the travel rewards lifestyle and start earning points toward your next trip, take a look at the best travel rewards cards to make your decision a little easier.

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