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Travel credit cards operate in the same way as any other rewards credit card: they earn points on purchases made using the card, especially on travel purchases. There are several kinds of travel credit cards, and each card receives rewards in different ways depending on the card, but in general, they all earn points on travel and everyday purchases, which may then be redeemed for future travel or other alternatives such as gift cards or cash back.
There are four basic kinds of travel rewards credit cards, each with its own set of benefits. Some examples include:
Hotel rewards credit cards work very similar to airline rewards. Credit cards with hotel rewards are associated with a single hotel group’s frequent stay program. These rewards can only be used for the specific hotel group the card is associated with and often give the best rewards when you make purchases from the associated hotel group.
Transferable point cards allow you to accumulate rewards, and then use those rewards within the same card program or transfer them to other travel rewards programs such as airline air mile accounts or hotel frequent stay programs.
If you have a travel credit card with points or rewards, it means that your rewards don’t always have a direct relationship to the real cost of what you intend to redeem them for. This is especially apparent in cases including airline reward flights. Typically, the number of points required to redeem a specific flight does not change when the actual dollar amount of the flight changes. An example of this would be a flight that requires 15,000 points would always require 15,000 points regardless of whether the flight costs $250 or $500.
When it comes to travel rewards, cash value cards are likely to provide you with the most options. They are not tied to a specific hotel or airline company, so you do not have to worry about optimizing your rewards by only staying in a specific hotel chain or only flying on one airline; instead, your points, miles, or rewards (different card issuers call their rewards different things) are worth a fixed value, typically $.01 each.
With these cards, you normally use your card to pay for your travel expenses and afterwards redeem your rewards as cash back rewards to offset those expenses. For example, suppose you need to book a flight that costs $500 round-trip. You’ll use your credit card to make the purchase, and if you have 50,000 miles in your rewards account, you will use those 50,000 miles as cash back rewards to cover the cost of the ticket. Normally, you can fly on any airline and stay at any hotel at any time.
When it comes to travel rewards, cash value cards are likely to provide you with the most options. They are not tied to a specific hotel or airline company, so you do not have to worry about optimizing your rewards by only staying in a specific hotel chain or only flying on one airline; instead, your points, miles, or rewards (different card issuers call their rewards different things) are worth a fixed value, typically $.01 each.
With these cards, you normally use your card to pay for your travel expenses and afterwards redeem your rewards as cash back rewards to offset those expenses. For example, suppose you need to book a flight that costs $500 round-trip. You’ll use your credit card to make the purchase, and if you have 50,000 miles in your rewards account, you will use those 50,000 miles as cash back rewards to cover the cost of the ticket. Normally, you can fly on any airline and stay at any hotel at any time.
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