Rewards Credit Cards

This Is the Best Time to Use Your Credit Card Rewards for Travel

The dog-days of summer have arrived, which means now's the best time to book travel for the winter holidays—and even spring break 2019. That's doubly true if you want to book travel using your credit card rewards.

It can be easy to find an attractive welcome bonus for a new credit card, and imagine earning those rewards just-in-time for your next vacation. But realistically, you should be earning credit card rewards that you plan to redeem further out into the future.

Between the time it takes to earn the rewards and making your award reservations as early as possible, you just can't look at credit card rewards as the travel equivalent of a "get rich quick" plan.

Find a rewards credit card that best fits your needs today.

How Award Travel Works

There are two different ways that points and miles can be redeemed: Traditional award programs and revenue-based programs. Here's a breakdown:

Traditional programs publish an "award" chart listing the number of points and miles required for a particular award. For example, a traditional frequent flyer program will often offer so-called saver awards for a domestic, round-trip flight in economy class starting at 25,000 miles. Once those are gone, the "standard" award will often cost double the number of miles.

When it comes to hotel loyalty programs, there will be several classes or tiers of properties that are priced at different numbers of points per night. And thankfully, there's usually just a single price rather than a "saver" and a "standard award."

Revenue-based programs offer you a certain, fixed amount of value for each point or mile redeemed. The number of points or mile required will depend on the current price of the travel reservation. So if a point is worth one cent each, a $488 flight will simply cost 48,800 points.

It's Never Too Early to Book Award Travel

Regardless of which type of program you are using, the price of these awards can go up as you approach the peak travel season, when the availability of the lowest-priced awards can plummet. The peak season effects are so dramatic, that many award travel enthusiasts will book their holiday flights nine to 11 months in advance, and consider the summer to be the "last minute" to book winter holiday travel.

Thankfully, many hotel programs allow you to use your award points to book any unsold, standard room with no blackout dates or capacity controls. And while airline reservations cannot be booked more than 11 months in advance, some hotels allow you to book rooms more than a year in advance.

This allows you to realize exceptional value from your hotel points during peak travel seasons when room rates can skyrocket. As long as you book your room before the hotel's standard rooms sell out, you should be able to redeem the same number of points for a room during the holidays as you would for the off-season, even though the rate in dollars could be much higher.

Making Last Minute Award Travel Work

Despite the need to book award reservations early for holiday travel, your credit card points and miles can also be useful for last-minute trips during periods of less travel demand.

Airlines and hotels may still charge high prices in dollars for last-minute reservations, while also offering inexpensive options using your points and miles, making this another way to receive the most value from your credit card rewards.

By understanding how and when to use your points and miles for holiday travel, you can make sure to get the most value from your credit card rewards.

Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.

This article was originally published on August 3, 2018, and has been updated.

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