How to book cheap or free travel deals with credit card rewards — a guide for beginners

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The general consensus is that credit card rewards are convoluted and hard to use.

That’s not true. Credit card rewards are nearly effortless to use. It’s easy to get free hotel stays, rental cars, and airfare. The only convoluted part is finding ways to squeeze every last drop of value from them. 

In this guide, we’ll give you a crash course on how to quickly earn credit card rewards and book free travel. We’ll also share the knowledge you need to find amazing deals for yourself. We’ll even cover some jaw-dropping sweet spots which, while not always the easiest to book, exhibit the power of credit card rewards. You’ll be booking $20,000 flights before you know it.

We’re focused here on the rewards and perks that come with each card. These cards won’t be worth it if you’re paying interest or late fees. When using a credit card, it’s important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.

Nearly free travel is possible

My first award flight was to the Philippines in 2014. I paid 40,000 United Airlines miles and $5.60 in taxes and fees. That’s right — I paid more for gas to drive to the airport than I paid for my flight.

After my trip, all I wanted to talk about was how I flew to Asia for $5.60. I had proved to myself a new travel strategy that could take me anywhere I wanted to go for practically free. I told friends and family how I did it — how easy it was to earn the rewards just by achieving a single credit card welcome bonus.

I could not keep anyone’s interest for long. The prospect of free travel is one of those things that most people totally ignore because it sounds fishy.

To all my friends and family that are suspicious of free travel, thank you. If everyone in the world expertly utilized credit card rewards to travel for free, there wouldn’t be such amazing travel opportunities out there. The fact that 99% of travelers are apprehensive to jump into the world of free travel benefits those of us who have learned the tricks of the trade.

I estimate that I get about $30,000 in free travel per year — and that’s just from taking three or four trips annually. I’ve used them for lie-flat business class seats and five-star hotels in places like Barbados, Dubai, Ireland, Maui, the Maldives, Peru, South Africa, St. Lucia, Switzerland, and many more.

I also frequently use points for roadside hotels when road-tripping and for quick flights to visit family. You can do it, too.

Identify your travel goals

Before you begin collecting credit card rewards, you should first identify your travel goals. Not all credit card rewards can accomplish the same thing, after all. For example:

• If you want free airfare, you should collect airline miles
• If you want free hotel stays, you should collect hotel points
• If you want free food, you should collect cash back
• If you have mixed goals, you should collect flexible points (we’ll get into these in a minute)

Here are some common travel goals with which you might identify, along with the top 10 rewards currencies that will help you achieve those goals. If more than one of the below goals describes you, determine which currencies overlap the most and collect those.

Of course, there are many hundreds of specific travel styles for which a different mix of rewards would be better suited.

How to earn credit card points

The fastest way to accumulate rewards is by earning credit card welcome bonuses. Most rewards credit cards come with a chunk of either points, miles, or cash that will deposit into your account after you meet minimum spending requirements.

For example, the Chase Sapphire Preferred® Card offers 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. You’ll still earn points on your spending — but once you’ve spent your four thousandth dollar, Chase will dump another 60,000 points into your lap.

There are dozens and dozens (and dozens) of credit card sign-up bonuses out there — quite literally millions of points and miles to be earned — if you’re willing to open credit cards and earn their bonuses.

Many rewards credit cards also provide bonus points when spending in certain categories. You’ll earn points for your everyday purchases exponentially faster if you take the time to find a handful of credit cards that offer bonus categories for your spending habits.

Opening multiple credit cards is not a bad thing

You’ve probably been conditioned to believe that opening multiple credit cards is bad for your financial health. It’s not — at least, there’s nothing intrinsically irresponsible about it. As long as you don’t spend beyond your means and pay off your card in full every month, credit cards are a valuable financial (and travel) tool.

If you use your credit responsibly, your credit score will actually increase after opening credit cards. You can read our guide on how to get an excellent credit score if you’re really concerned.

Many of us that are deeply entrenched in the world of credit card rewards (myself included) have well over 20 active credit cards. That sounds totally wild to most people — but they’ve earned me millions of rewards totaling hundreds of thousands of dollars in travel.

For example:

As long as you’re getting more back than you’re paying in annual fees, the cards are worth keeping (provided you can afford those annual fees!).

Don’t collect credit card rewards if you can’t keep your spending down

If you don’t have the best track record with credit, or if you simply don’t think you’re responsible enough to open lots of credit cards, don’t do it. Rewards credit cards come with outlandish interest rates. In other words, unless you’re able to pay your credit card in full each month, you’ll pay out the nose in fees. And accruing debt on a rewards credit card isn’t easy to overcome.

It’s also a good rule of thumb to keep from jumping into credit card rewards until you have a credit score of at least 700. This will give you the best chance of being approved for pretty much any card you want.

Earning flexible points

There are four real powerhouse points currencies in the flexible rewards space. These are the most popular points among travelers for two reasons:

1. They are extremely easy to earn. Each flexible points currency can be earned on at least five different credit cards (and some can be earned on 10+ cards).
2. They can each be transferred to more than a dozen different valuable airline and hotel partners. This is helpful if you’ve got multiple travel goals that you want to achieve, and you don’t want to collect a single airline or hotel currency. For example, if you want to stay at both Hilton and Marriott for free, you could collect Amex Membership Rewards points, which transfer to both programs.

Here we’ll look at the top five credit cards to earn each points currency, along with their current bonuses (if they offer one).

Earning airline miles

Below are the most popular airline loyalty programs — and the top five credit cards to open and use to quickly rack up your mileage balance.

Earning hotel points

Below are the most popular airline loyalty programs — and the top five credit cards to open and use to quickly rack up your mileage balance.

Recommended credit card strategies for beginners

The best practice for anyone new to credit card rewards is to invest in flexible points. Again, these points can be used for all kinds of things — from airfare to hotel stays to rental cars to cash back.

Let’s take a look at some strategic credit card pairings to turn yourself into a points-earning behemoth. These cards will help you to earn the maximum amount of rewards on all spending.

The Amex Trifecta

1.  Use The Platinum Card® from American Express for travel

The card earns:

• 5 points per dollar on airfare purchased directly through the airline or through Amex Travel (on up to $500,000 per calendar year)
• 5 points per dollar on hotels booked through Amex Travel 
• 1 point per dollar on all other eligible purchases

2. Use the American Express® Gold Card for dining and groceries

The card earns:

• 4 points per dollar at restaurants
• 4 points per dollar at U.S. supermarkets (on up to $25,000 in spending per calendar year, then 1 point per dollar)
• 3 points per dollar on flights booked directly through the airline or Amex Travel
• 1 point per dollar on everything else

3. Use The Blue Business® Plus Credit Card from American Express for everything else

The card earns a flat 2 points per dollar on the first $50,000 in purchases each year (then 1 point per dollar). You’ll have to operate a small business to qualify for this card, but even things like DoorDash delivery or freelance writing can qualify for this.

The Chase Trifecta

1. Use the Chase Sapphire Reserve® for travel and dining

The card earns:

• 10 points per dollar on Lyft rides through March 2025 and on Chase Dining purchases through Chase Ultimate Rewards®
• 10 points per dollar on hotel stays and car rentals purchased through Chase Ultimate Rewards
• 5 points per dollar on air travel purchased through Chase Ultimate Rewards
• 3 points per dollar on other travel (after earning the $300 travel credit) and on dining
• 1 point per dollar on everything else

2. Use the Chase Freedom Flex℠ for various everyday purchases

The card earns:

• 5% cash back (5 points per dollar) on travel purchased through Ultimate Rewards
• 5% cash back (5 points per dollar) on up to $1,500 in purchases each quarter (then 1x) in rotating bonus categories when you activate. This can include things like Amazon, gas stations, supermarkets, and more.
• 3% cash back (3 points per dollar) on dining and drugstore purchases
• 1% cash back (1 point per dollar) on everything else

3. Use the Ink Business Unlimited® Credit Card for everything else

The card earns a flat 1.5% cash back (1.5 points per dollar) on all purchases. You’ll need to be a small business owner to qualify for this card — but if you do things like sell on Etsy, walk dogs for money, tutor, or drive for Uber, you can qualify for this card.

The Citi Trifecta

1. Use the Citi Premier® Card for groceries, gas stations, dining, and travel

The card earns:

• 3x points on air travel, gas stations, restaurants, supermarkets, and hotels
• 1 point per dollar on everything else

2. Use the Citi Custom Cash℠ Card for your most common monthly expense

The card earns 5% back (5 points per dollar) on up to $500 spent per billing cycle (then 1 point per dollar) for your top spending category. Eligible categories include:

• Restaurants
• Gas stations
• Grocery stores
• Select travel
• Select transit
• Select streaming services
• Drugstores
• Home improvement stores
• Fitness clubs
• Live entertainment

You’ll earn 1% back (1 point per dollar) on all other purchases.

3. Use the Citi® Double Cash Card for everything else

The card earns 1 point per dollar when you make a purchase, and 1 point per dollar when you pay your credit card — effectively giving you 2 points per dollar on all purchases.

The Capital One Duo

1. Use the Capital One Venture X Rewards Credit Card for travel and non-bonused spending

The card earns:

• 10 miles per dollar on hotels and car rentals booked through Capital One Travel
• 10 miles per dollar when booking on Turo (offer ends May 16, 2023)
• 5 miles per dollar on flights booked through Capital One Travel
• 2 miles per dollar on all other eligible purchases

2. Use the Capital One Savor Cash Rewards Credit Card for rideshare, entertainment, and everyday spending

The card earns:

• 10% cash back on Uber and Uber Eats purchases through November 14, 2024
• 8% cash back on Vivid Seats purchases through January 31, 2023, and on Capital One Entertainment purchases
• 5% cash back on hotels and rental cars booked through Capital One Travel
• 4% cash back on dining, entertainment, and popular streaming services
• 3% cash back at grocery stores
• 1% cash back on all other purchases

Again, this cash back can be converted into Capital One miles if you also have a Capital One miles-earning card like the Capital One Venture X Rewards Credit Card.

The Cashback Trifecta

1. Use the Blue Cash Everyday® Card from American Express for groceries and online retailers

The card earns:

• 3% cash back at U.S. supermarkets on up to $6,000 spent per year (then 1% back)
• 3% cash back at U.S. gas stations on up to $6,000 spent per year (then 1% back)
• 3% cash back on U.S. online retail purchases on up to $6,000 spent per year (then 1% back)
• 1% cash back on all other eligible purchases

2. Use the Capital One SavorOne Cash Rewards Credit Card for food, streaming, and travel

The card earns:

• 10% cash back with Uber and Uber Eats through November 14, 2024
• 8% cash back on Capital One Entertainment purchases
• 5% cash back on hotels and rental cars booked through Capital One Travel
• 3% cash back on dining, at grocery stores (excluding superstores like Walmart® and Target®), for eligible streaming services, and on entertainment
• 1% cash back on all other purchases

3. Use the Wells Fargo Active Cash® Card for everything else

The Wells Fargo Active Cash® Card earns a flat 2% cash rewards on all purchases. You can use this card to funnel all your non-bonused spending through — think expenses like utilities, oil changes, etc.

How to redeem travel rewards

So, you’ve earned a stash of points, miles, and/or cash back. Now, what are you going to do with them?

The world of miles and points can be a bit complex. Let’s look at a quick explainer of how to use each type of reward. Once you understand how they work, you’ll understand how to find good deals.

Airline miles

Let’s get a misconception out of the way first: Each airline mile you collect does not give you the ability to travel on a plane for 5,280 feet. In other words, just because you’ve collected 24,901 miles doesn’t mean you can circumnavigate the Earth. Perhaps it’s less confusing to just think of them as airline rewards.

Airlines have different ways of pricing award flights:

• Some price award seats according to the distance you fly (British Airways does this)
• Some price them according to the country you’re flying from and the country you’re flying to (Air Canada Aeroplan does this)
• Some price them according to the cash rate of the ticket you want to book (Southwest does this)
• Some price them according to a secret algorithm that makes seemingly no sense to the naked eye (American Airlines does this)

Because of this, you’ll be able to predict the price you’ll pay with some airlines better than others.

Most airlines have a large network of airline partners. This is important because you can usually use your miles to book flights on partner airlines, as well. For example, if you collect American Airlines miles, you can use them to book (nearly) free flights on American Airlines — as well as the following partners:

• Air Tahiti Nui
• Alaska Airlines
• American Airlines
• British Airways
• Cape Air
• Cathay Pacific
• Fiji Airways
• Finnair
• GOL Airlines
• Hawaiian Airlines
• Iberia
• Japan Airlines
• JetBlue
• Malaysia Airlines
• Qantas Airways
• Qatar Airways
• Royal Air Maroc
• Royal Jordanian Airlines
• Silver Airways
• SriLankan Airlines

In other words, you can get just about anywhere in the world with American Airlines miles.

Hotel points

Hotel points work similarly to airline miles:

• Some hotels charge a points price that fluctuates according to the cash price of the room (Hilton does this)
• Some hotel programs place each property into a “category” with a fixed price, regardless of the cash price of the room (Hyatt does this)

For example, Hyatt charges between 17,000 and 23,000 points per night for a “Category 5” Hyatt hotel. the Hyatt Regency Waikiki Beach is a Category 5 hotel. That means even if the hotel costs $1,000 per night, you’ll never pay more than 23,000 points for a standard room.

Flexible rewards

Flexible rewards, as the name intimates, can be used in a variety of ways. Let’s take a look at the three most popular redemption options.

Redeem for cash: Depending on the type of points you have, you can redeem them for cash at varying rates:

• Amex Membership Rewards points — 0.6 cents per point
• Capital One miles — 0.5 cents per point
• Chase Ultimate Rewards points — 1 cent per point
• Citi ThankYou points — 0.5 cents per point (1 cent if you’ve got select cards)

In nearly every single scenario, cash back is not a good redemption option with these points. If you’re interested in cash back, you should be using cash-back credit cards instead of credit cards that earn travel rewards.

“Buy” travel through a portal: All flexible rewards can be used to reserve things like airfare, hotel stays, rental cars, and more through a proprietary bank portal at a fixed rate, though the rate can depend on the credit card you have.

Transfer to valuable travel partners: Converting your points into airline miles and hotel points gives them the most potential. Each flexible points currency offers its own unique transfer partners. Here’s a quick rundown of each program with its transfer partners. All transfer ratios are 1:1 unless otherwise specified.

When to use rewards vs. cash

Just because you can book a free flight or hotel stay with credit card rewards doesn’t mean you should. Believe it or not, “free” isn’t always a good deal. Sometimes it’s wiser to pay with cash.

Most points and miles currencies don’t have a firm value. Depending on the way you redeem them, you can get wildly different return rates for your rewards. Do you know how to tell when you should use rewards and when you should use cash?

It’s a simple question to answer, and just takes a few seconds of low-level algebra.

The magic formula

Whenever you’re looking to reserve free travel with credit card rewards, you should know exactly how much value you’re getting for your points. There’s an easy way to figure this out:

(cash price of travel – taxes and fees of award price) / number of points = value per point

United Airlines

For example, a round-trip coach flight between Chicago and Venice costs $958 in late October 2023. The award price for this trip is 60,000 United Airlines miles and $65.

Using the above formula, we will:

• Subtract the $65 in taxes you’ll pay with your award flight from the cash price of the ticket ($958 – $65 = $893).
• Divide this new figure by the number of miles you’ll pay ($893 / 60,000 = $0.014).

As you can see, booking this award ticket will give you a value of 1.4 cents per United Airlines mile.

How much are points and miles worth to you?

Because the value you can receive from credit card rewards varies, so much, you’ll have to decide for yourself what a “good” value is for your points and miles. Insider has its own points valuations, which have been created by those of us who use credit card rewards constantly. You can use that as a guide.

For example, Insider estimates that Hyatt points are worth an average of 1.5 cents each — but I am personally reluctant to use Hyatt points unless I’m getting at least 2 cents in value. Here are some ways I’ve used Hyatt points recently, along with the value per Hyatt point I received:

• Thompson Nashville —4.4 cents per point
• Alila Ventana Big Sur — 6.66 cents per point
• Lahaina Shores Beach Resort, Maui —1.7 cents per point
• Andaz Maui — 4 cents per point
• Hana-Maui Resort — 2 cents per point
• Park Hyatt Beaver Creek — 4.56 cents per point

All this to say, I’d (usually) rather pay cash for my Hyatt hotel if I’ll get less than 2 cents per point and save my rewards for better value later.

Best use of points for value

You should always use your credit card rewards in a way that makes sense for your travel habits. You’ll be the most stress-free and content if you worry less about getting “maximum value” for your rewards and simply use them in a way that makes you happy.

That said, let’s take a look at some of the best ways to use your points for huge value. We won’t go too deep into the details, but you can send us a note if you’ve got a question and we’ll respond when we have a spare moment.

Air travel sweet spots

Elliott Cowand Jr/Shutterstock

David Slotnick/Business Insider

Peter Unger/Getty Images

ANA

American Airlines

ANA

Shutterstock/Ocskay Bence

Iberia

Hotel sweet spots

Hyatt

Hilton

HotelsCombined

Hyatt

Marriott

Welcome bonus sweet spots

What you should know about traveling with credit card rewards

In truth, free travel is too good to be true. But it’s true anyway.

Credit card rewards will continue to be a powerful tool for free travel for one simple reason — very few people are going to take the time to read this guide in full. If you dedicate a bit of time to learning the ins and outs of traveling on points, there’s practically nowhere in the world that you can’t go for pennies on the dollar.

Joseph Hostetler, CEPF

Credit cards reporter