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This is another article that is part of the multi-part MTH (“Make Travel Happen”) series designed to provide beginners with all the information needed to let their travel dreams come true.
There are three main types of credit cards that you will be applying for when starting MTH. These credit cards include: 1) co-branded cards, 2) cards that earn transferrable points, and 3) cards that earn travel credits. There are pros and cons to each type of card but below is a general overview of the different types travel credit cards and some insight into which type may be best for you.
Co-branded cards are credit cards issued by major banks like Chase, American Express, and Citi that earn miles (or sometimes points) for specific reward programs.
Here are some examples of some of my favorite co-branded cards:
- United MileagePlus Explorer Card
- British Airways Visa
- Southwest Premier and Plus Cards
- Citi AAdvantage (American Airlines) Platinum Select Card
- Ritz-Carlton Rewards Credit Card
- Marriott Rewards Premier Credit Card
Co-branded cards can be great ways to jump-start a balance of miles or points for a rewards program and they also usually offer other perks.
These perks include things like:
- Free checked bag
- Priority boarding
- lounge passes
- Automatic elite status
- Free anniversary nights at hotels
The downside to them is that they don’t offer the flexibility that you can get from other cards that earn transferrable points.
Before jumping on a co-branded card, you really need to have done your homework so that you know that you’ll be able to take advantage of the maximum value from your card. Often times, you may get a credit card for a specific airline but intend on using the miles earned from that card on a different airline alliance partner.
For example, I’ve gotten American Airlines Cards and used all of the miles earned on those cards to book flights with Etihad and Qatar airlines. You usually lose the benefits of the card like free checked bags when you do that, but it’s worth the sacrifice for the flexibility of using your miles on an airline you really want to fly on.
This is why it’s important to be familiar with alliance partners before applying for credit cards so you can maximize your use of your miles.
Cards that earn transferrable points
The most valuable and sought after cards are usually those that allow you to earn points that can be transferred to an array of travel partners (both airlines and hotels). These are great because the transferability allows for much more flexibility when making travel plans. You can use these cards in conjunction with co-branded cards to amass huge balances with certain programs, or if you need to top-off for certain airline or hotel programs you can usually get points transferred over within a day a or two and be ready to book your trip.
There are three major banks that offer these type of reward programs.
- Chase Ultimate Rewards
- American Express Membership Rewards
- Citi Thankyou Points
Only certain cards from each bank will allow you to earn points that can be transferred to travel partners, however. Below are lists of some of the top credit cards that will earn you points that can be transferred to travel partners of the respective reward programs.
- Chase Sapphire Preferred
- Chase Ink Plus
- Chase Freedom*
- Chase Freedom Unlimited*
- Chase Ink Cash*
*While you can earn Ultimate Rewards with these cards, you’ll need the Sapphire Preferred or the Ink Plus in order to transfer the points earned on those cards to travel partners.
- EveryDay Card
- EveryDay Preferred Card
- Premier Rewards Gold Card
- Platinum Card from American Express (and business versions)
- Business Rewards Gold Card
The American Express SPG card earns SPG points but these can be transferred to many different programs so it acts as a card that earns transferrable points.
Citi Thankyou Points
- Citi Prestige
- Citi Premier
- Citi Preferred*
*While you can earn ThankYou Points with the Preferred, you’ll need the Prestige or the Premier in order to transfer the points earned on those cards to travel partners.
In addition to transferring points to travel partners, some of these programs also allow you to redeem your points for travel expenses, statement credits, gift cards, and even shopping. While these can be okay options sometimes, you are almost always going to get the most value out of your points when you transfer them to travel partners.
Which program is best for you will depend on a lot of factors, such as your desired airfare class, desired destination, proximity to certain airports, and your affinity for different airlines. I’ll discuss all of those things much more in depth in a later article but it’s just important to note the different ways you can earn points and transfer them out to travel partners.
Cards that offer travel credits
Some cards simply provide you with points that act as a travel credit instead of giving you miles and points that will be used with an airline or hotel program.
How they work is that you:
- 1) Earn the sign-up bonus for X amount of points
- 2) Use your card for a qualifying travel purchase
- 3) Log in and select your travel credit to apply to that travel purchase
So there’s never a transfer of points to an outside travel program — it’s all done internally with the bank that issued the card.
What qualifies for travel will vary but you can always expect things like airfare, hotels, trains, etc. to qualify but be aware of minimum purchase requirements.
The benefit to these cards is that you can use them to cover expenses for hotels or airline tickets that you couldn’t find or use points or miles on. The drawback is that you’re limited to the set value amount for your statement credit which is usually at most around $400. Compare that to transferring points to airline programs where you can turn the same number of points into travel valued at over $1,000.
Some credit cards that offer these type of credits are:
- Barclaycard Arrival Plus
- Bank of America Travel Rewards Card
- Capital One Venture Rewards Credit Card
Check out my review of the Barclaycard Arrival Plus to give you a better idea of how these cards work.
These are the three main types of credit cards that you should get familiar with. Next, I’ll go over the difference between rewards credit cards that are meant for earning you lots of miles and points and cards meant to provide you with travel benefits that will make your travels much more comfortable and convenient.
Daniel Gillaspia is the Founder of UponArriving.com and creator of the credit card app, WalletFlo. He is a former attorney turned full-time credit card rewards/travel expert and has earned and redeemed millions of miles to travel the globe. Since 2014, his content has been featured in major publications such as National Geographic, Smithsonian Magazine, Forbes, CNBC, US News, and Business Insider. Find his full bio here.