After a long 18 months of little to no travel, many people are considering planning trips again, maybe even going out of the country. That’s great news, but the drawback of travel is often the cost. Even if you managed to sock away extra money during 2020 that you can now spend on travel, you still probably want to get the most bang for your buck when you’re making your travel plans.

That’s where travel loyalty programs come in. These handy plans come in all shapes and sizes and help you earn points that you can use for travel just by making your regular purchases. But they can be a little bit complicated to navigate if you’ve never used one before.

How do travel programs work?

Each program is a little bit different, but they all are generally based on the concept of earning points by making purchases, which can then be redeemed on plane tickets, hotel stays, or other traveling necessities. Every program’s points are worth a different amount in real dollars, but if you accrue enough, you could pay for a whole plane ride or even a cruise using your points.

Sounds great. Tell me more about these points.

There are three general kinds of travel points: Airline miles, hotel points and transferable points.

Airline miles: You sign up for airline miles directly with a specific airline, and you can only use the points you accrue for flights on that airline. You can earn these points with many airlines by signing up for a mileage account with them; and then entering your account number whenever you book a flight with them. To earn points faster, many airlines offer companion credit cards, which you use like any other card, but you earn points on purchases you make that are then added to your mileage account.

Hotel points: These work very similarly to airline miles. You choose a hotel chain with a rewards program and sign up, then make sure you use your account number to rack up those points every time you book a stay. Again, like airline miles, many hotels have credit cards that allow you to earn points as you use it.

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Transferable points: Credit card companies offer transferable points to incentivize people to use their cards. There are lots of options, but generally, you apply for one of these cards just like any other credit card, and the purchases you make accrue points that you can transfer to airlines or hotels that have partnered with the credit card company. Some transferable points can even be used for gift cards.

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So, what’s the catch?

Travel programs are a great way to cut down on travel expenses, but there are some things to keep in mind when signing up for one of these programs.

  • Most travel rewards programs require you to have a very good credit score — 720 or higher — to get their credit card. Also, remember that a hard credit inquiry is made every time you apply for a credit card, which negatively impacts your credit score.
  • Carefully read all the fine print when applying for these programs, especially if you’re applying for a credit card. Many come with annual fees that can be high enough to negate your savings if you don’t use your card enough or redeem your points in time.
  • Make sure that you understand the limits and restrictions of your points. Some programs come with blackout dates that invalidate points during peak travel times, like the holidays, and others require that you only travel with one specific airline or stay with their chosen hotel.

With those basics in mind, do your research and consider finding a loyalty program that works for you as you get back into the swing of travel. They can be great tools to save you money, but make sure you pick the right one and always figure out the details of what they’re offering. Safe travels!

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