Credit cards, and especially credit card welcome bonuses, are what make this nearly free travel all possible. There are three primary types of travel reward credit cards:
- Transferable points (Chase Ultimate Rewards, American Express Membership Rewards)
- Co-branded (Chase’s Southwest cards, AMEX Hilton Cards)
- Fixed value (statement credit, Barclays Arrival Plus)
Transferable Points = The Most Valuable Points!
Amex and Chase are the kings of transferable points. Citi Thank You points are and Marriott points also are in this category.
Transferable points get their extra value from 2 advantages:
- You can transfer them to travel partners to earn more value than 1 cent per 1 point.
- They are flexible so you can usually cash them out for literal cash if you want or you can save them until you have a trip you can plan for.
The ability to transfer points to a travel partner is what unlocks the extreme reward redemptions. For instance, I recently flew my wife and myself round trip in business class Dubai to New Zealand on Singapore Airlines for 312,000 points.
These points came from several Chase Ultimate Rewards card, American Express Membership Reward cards, and Marriott/SPG cards. While these tickets would have cost over $7000 had I bought them with cash, I was able to get 2.2 cents per transferable point.
I also booked ANA first class from Hawaii to Tokyo for 240,000 Amex points. These 2 tickets would have cost over $27,000 if I paid cash. This redemption was worth 11 cents per point, which is huge!
You can see the itinerary below. First image is the cash price, $27,325. Second image is what I paid: 240,000 Amex points + $485.92 in taxes and fees.
Co-Branded Hotel Points and Airline Miles
These cards are fantastic for military servicemembers, as they usually offer annual recurring benefits and no annual fee for military personnel.
For instance the American Express Hilton Honors Aspire card offers:
- Complimentary Diamond Elite status, the highest status available to Hilton Honors members. This includes free breakfast at all properties, upgraded rooms, and free welcome gifts
- $250 Resort fee credit, good at any Hilton resort listed on this page, and good for any charge to your card at the resort, whether it's spa, dining, or other services
- $200 airline fee credit, good for airline gift cards and fees paid
Fixed Value Cards
Fixed value cards offer you a fixed value per point. Usually 1 point = 1 cent, so a 50,000 point bonus is worth $500.
These cards are very flexible to use because you know how much value you are getting from the beginning. When you are ready to travel, you simply purchase the tickets or hotel stay, apply the points to your charges, and the charges disappear, up to the amount you apply.
For instance, let’s say you buy a $300 plane ticket and 2 nights at a hotel at $200 total for your brother’s college graduation. That adds up to $500 of expenses, which you can completely pay for with 50,000 points.
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