The best credit cards to get travel rewards

September 1, 2011

If you want to turn your credit card spending into free flights and hotel stays, it pays to do some homework. Not all cards are created equal.

The consumer review website NextAdvisor.com looked at a stack of credit cards that offer points that can be applied to free travel. Their findings?

The Starwood Preferred Guest American Express card delivered the most hotel bang for the buck. Starwood hotels include Sheraton, The Westin, W, Le Meridien and the St. Regis.

Southwest Airline’s Rapid Rewards Visa was rated tops for building up points for free flights.

“Our reviews of the hotel and airline rewards credit cards are very popular with consumers, and one of the most common questions we get is, ‘How much are the points in each program worth?’ So we decided it was time to perform a detailed analysis to answer that question,” Erik Larson, NextAdvisor.com’s president said in releasing the analysis. “Consumers can use our analysis to make better decisions about which reward program to join or for which reward credit card they should apply.”

NextAdvisor broke down the value per point, factoring in how much it would take to actually get a free flight or free hotel room. Points were given a monetary value, with Starwood’s worth a bit over two cents  per point for hotel nights and Southwest’s worth about the same for flights on that airline. That translates to about 10,000 points for $200 worth of rewards.

On the other end was the Hilton Honors Visa, which only translated to about half a cent per point. But NextAdvisor noted that when the money was spent at Hilton properties, card holders got six points per dollar — a very high rate.

When it comes to affinity programs like this, however, it’s not all about points and miles for a lot of consumers. Sometimes it’s about loyalty and convenience.

Laura La Gassa, a 46-year-old frequent flyer from San Francisco, is loyal to United’s Mileage Plus card (which placed third in the rankings). She already was a regular flyer on United and had achieved “premiere executive” status with their mileage program so it only made sense to keep building on that.

“I’d resisted all attempts for all airlines and credit card companies to lure me into a mileage card until 2008,” she said. “Then I saw an advertisement in United’s in-flight magazine … offering a bunch of goodies like 30,000 bonus miles, double miles on all United Airlines tickets, and some free domestic upgrades, so I thought ‘what the heck’ and applied for the card.”

At first, La Gassa said she didn’t really use the card at all and then after a double-miles offer on some transactions, she started paying with the card almost exclusively. She has used her miles for a first-class trip to Australia, a business class flight to London and a couple of flights in and out of Hawaii. She figures two trips a year are directly attributable to using the card.

If you are interested in getting a card or already have one, here are some tips from Bill Hardekopf, founder of LowCards.com:

  • Book early to overcome limits on the number of seats that can be paid for with points and the fees some airlines charge for booking close to the departure date.
  • Watch out for annual fees and higher interest rates.
  • Pay attention to whether your miles can expire and, if so, when and what minimal activity is needed to extend the date.
  • Be aware of fees and surcharges that can be tacked on to the booking of a “free” ticket including for cancellation, ticketing and changes.
  • Stick with one program so you can the most benefit from the rewards given to high-level frequent flyers.
  • Understand the catches that appear in the fine print, such as the potential for being charged a variety of taxes and flight and facility charges and  being only allowed to book a round-trip ticket.
2 comments

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American Express is far better than any other cards. You get point for every $ you spend and you can use them for ANY airline. Not mentioning the superior customer service Visa/MC never even come close to. There are also many places which banned Visa and MC due to the Wikileaks saga, so Amex is unbeatable.

Posted by Renox | Report as abusive

Another useless article that takes up space.

Posted by 2cartalkers | Report as abusive