The ultimate guide to using points and miles for travel: 7 best ways

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Credit card rewards can be extremely valuable currency. Depending on the card you choose, you’ll earn points, miles, cash back, or a combination of the three.

Racking up points and miles can be a great way to cover the cost of hotel stays, flights, car rentals, cruises, and more. The key to making the most of your card’s rewards is knowing how the reward program works and how to redeem points or miles for maximum value.

7 ways to use your points and miles for travel

1. Book a flight through your card’s travel portal

Once you’ve accumulated enough miles or points, you may be able to cover the cost of an airline ticket — or at least get one at a discount.

One way to do this is by booking directly through your card issuer’s travel portal. Some credit cards, like the Chase Sapphire Reserve®, give your points a 50% boost when booking through the Chase Ultimate Rewards portal.

Let’s say you have 10,000 points, typically worth $100. If you’re using those points to book a flight in Chase’s portal, those points will now be worth $150.

If you have an airline co-branded credit card, you can usually only redeem rewards with that airline. Plus, even when you're redeeming miles to cover the cost of a flight, you'll still need to pay for any taxes and fees.

2. Transfer points to partner airlines

Another way to use rewards to book flights is by transferring the rewards to a partner airline. In most cases, you’ll typically get much more value this way.

“Chase, American Express, Citi, and Capital One points all can be redeemed at a fixed rate on their own travel portals, but to get outsized value, you can transfer them to a hotel or airline partner,” says Freddy Lansky, founder of Points Panda, a travel concierge service.

Why? Airlines often offer favorable redemption rates for award flights. Plus, partner airlines may have their own pool of award seats with more availability than through your card's portal. This can be beneficial during peak travel seasons or for popular routes where seats are in high demand.

“When using miles for a flight, it typically doesn't matter what the cash cost of the ticket is. As long as the airline is making the flight available for an award booking, it will cost whatever (rewards) price the airline has outlined in its award chart,” says Jackson Newman, credit card and award travel writer for Thrifty Traveler.

If you want to fly business class, it’s not unusual to get ten times the value per point when transferring them to a loyalty program, Lansky says.

3. Upgrade your flight

Another popular way to use rewards is upgrading your seat on a flight. If you’ve amassed enough points or miles, it may be possible to cover the cost of moving from economy to business (or even first) class.

The best way to do this is to transfer miles to the airline’s program and redeem them to cover the cost of upgrading your seat from economy to business class.

Some non-airline credit cards may let you use the miles accumulated to upgrade your seat through the card’s travel portal.

4. Book a hotel stay

In many cases, the rewards you earn can cover your hotel tab. Like with flights, you can book discounted or free hotel stays through your card's travel portal or by transferring rewards to partner hotel chains.

One of the best ways to earn points for hotel stays is by using a specific hotel credit card like the World of Hyatt Credit Card, the Marriott Bonvoy Boundless® Credit Card, or the IHG One Rewards Traveler Credit Card. These co-branded cards offer free nights at hotels after spending a certain amount. They sometimes even offer free hotel stays as an introductory bonus or annual card anniversary.

5. Rent a car

If your rewards card has flexible redemption options, you can use points or miles to book a car. You can typically do this by booking through your card’s travel portal. Some credit cards also allow you to transfer points to the car rental company to pay for rentals. Certain cards may also offer statement credits for travel expenses, including car rentals.

The exact way to redeem points for rental cars varies based on the credit card and reward program rules. Remember that redeeming your points or miles for a car rental may not be the best value, and you may be better off using your rewards for something else.

6. Book a cruise

Are you a cruise fan? You can often use accumulated points and miles to pay for a cruise getaway. For example, American Express cards let you use points to pay for a cruise when booking through the American Express travel portal.

Some travel cards also have partnerships with cruise lines, allowing you to convert miles or points into cruise credits. Marriott Bonvoy cardholders, for example, can use points to book with Norwegian, Carnival, Royal Caribbean, and more.

But like with rental cars, the value you get from booking a cruise with rewards may not be the highest.

7. Buy travel packages

Rewards credit cards allow you to purchase entire travel packages with your earned points — including the hotel, flight, and other activities. You can typically do this through your card issuer’s travel portal. However, you may not get the best value for your points when booking an entire vacation this way.

“​​This is almost always a terrible value whether booking in cash or points,” Lansky says.

Understanding your card’s rewards

Rewards credit cards may offer points, miles, and cash back as a reward for your spending. Here’s a closer look at each one.

Points

You can earn points when you make eligible purchases with a credit card. You'll often earn a fixed amount of points for each dollar spent. Rewards rates usually vary by credit card issuer and spending category.

Depending on the rewards program, you can redeem points to pay for travel, merchandise, gift cards, and more.

“Credit card reward points can be transferred into many different airline and hotel partners, as well as being able to be used in a travel portal at a fixed rate per point,” Lansky says. “Since points are versatile, they are the most valuable.”

Miles

Miles allow travelers to accumulate miles when making purchases with their credit cards. You’ll generally earn miles for each dollar spent. You may sometimes earn a higher reward rate on travel purchases.

“Card users build a bank of miles through purchases,” says Karl Kaluza, vice president at Member Access Processing (MAP), an aggregator of Visa card services for credit unions. “Saved miles can be used to purchase an airline ticket or perhaps a seat upgrade from coach to business class.”

Most cards offering miles are co-branded credit cards or a partnership between a card issuer and an airline or hotel chain. Users can often redeem miles for flights, upgraded seats, and other travel expenses.

Cash back

Cash back is the most straightforward type of credit card reward. Typically, you’ll earn a percentage back for each dollar spent using the card. For example, if your card offered 3% back and you spent $100, you’d earn $3 in cash back rewards.

Cash back can be redeemed as a direct deposit, a statement credit, a gift card, or a check.

While most cash back cards offer a flat rewards rate, some may offer a higher rate for specific categories like dining, gas, or groceries.

Sign-up bonuses

Sign-up bonuses are another powerful way to accumulate rewards quickly. Many cards advertise a one-time rewards bonus after you open a card and spend a certain amount in the first few months. Those introductory bonuses could sometimes be worth up to $1,000.

“Getting a new sign-up bonus or welcome offer is key to kick-starting your reward earning and will help get you closer to that dream vacation sooner,” says Newman.

How to maximize the rewards you earn 

As you can see, there are many different ways to strategically redeem your rewards to get the most value. There are also methods to maximize how you earn rewards.

Now that you know how travel rewards credit cards work and how to use them, you can match your card to your spending habits to rack up miles or points faster. Here’s how.

Research the best credit cards for travel rewards

It’s crucial to start with the right card in your wallet. There are dozens of travel cards, so it’s essential to research and find the ones that align with your spending habits.

For most people, it makes sense to pick a general travel credit card with flexible rewards. But if you’re a loyalist to a specific airline or hotel chain, you may want to opt for a co-branded card.

“If you’re choosing an airline credit card, for instance, be sure to select a card from an airline that has a hub in the airport closest to your house,” Kaluza says. “That way, you will build more miles on nearly every flight you take.”

Not all credit cards are created equal. When choosing a travel credit card, look for features like sign-up bonuses, generous rewards rates, and flexible redemption options.

“It's important to look at both the sign-up bonus and the ongoing benefits of a card,” Newman says. “Finding a card that's going to fit your long-term spending habits and travel patterns and comes with a big sign-up bonus is a true win-win.”

Use bonus categories

Many credit cards offer higher reward rates for specific spending categories, such as groceries, gas, or dining. To maximize your rewards, be mindful of these bonus categories and use your credit card accordingly.

For example, if your card offers 3X the points on dining, use it whenever you dine out. That way, you can earn more rewards without changing your purchasing habits.

“In many cases, purchases in specific categories like at restaurants or supermarkets are rewarded with bonus points, giving you more than your standard 1% or 2% back,” Newman says.

Pool points and miles from multiple credit cards

One strategy to boost your rewards is to combine points and miles from multiple credit cards. If you have multiple cards with the same issuer, you can often pool your points or miles to maximize their value.

“For example, if you have both the Chase Sapphire Preferred® Card and the Chase Freedom Unlimited®, you'll be earning Ultimate Rewards with both cards,” Newman says. “Within your Chase Ultimate Rewards account, you can combine the points earned across these two cards into one pool of points to be used for a single redemption.”

Pooling rewards also allows you to reach redemption thresholds faster.

The bottom line

Travel rewards credit cards can be a crucial way to save on flights, hotels, car rentals, and more.

Making the most of your credit card rewards requires a strategic approach and a little effort. But the key is to find a card that works for you and redeem your rewards for the highest possible value.

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