What type of rewards should you be earning?

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There are several different kinds of travel rewards currencies, including airline miles and points, hotel points, bank points, and even cash back. With all of these options, it’s no wonder people get confused when trying to decipher which rewards they should actually be earning.

If you’re just starting the learn the ins and outs of travel rewards, you’re not alone. So we’ve put together a list of questions you should ask yourself when you’re trying to chart out your miles & points strategy.

You’ll need to consider things like your spending habits and personal travel goals. These details will dictate which loyalty programs you’ll want to sign up for and which rewards credit cards you’ll want to apply for.

What are your travel goals?

The biggest question to ask yourself when you’re thinking about which type of travel rewards to earn and use is: “What do you want to do with your rewards?”. Your answer to this question is your springboard to deciding how to proceed into the world of miles & points.

Consider the following:

Do you have a particular trip in mind?

If you already have your eyes set on a dreamy getaway to the Maldives, planning your travel rewards strategy will be a heck of a lot easier. Why? Because you’ll be able to (more or less) determine exactly which type of rewards you’ll need to make that trip a reality. Armed with that information, you’ll know which loyalty programs and which rewards cards will help you get where you want to go.

How often do you travel?

The frequency with which you travel will guide you in your travel rewards strategy. If you travel a lot for work, for example, you’ll likely be racking up more rewards than others. Plus, your employer may have a relationship with a particular airline or hotel, which would mean you’d want to focus your loyalty to those brands.

If you only travel a couple of times a year, on the other hand, you’ll need to focus more on earning big welcome offers from the top cards for travel because you won’t be earning the bulk of your rewards by actually traveling.

Do you prefer luxury travel?

Your preferred style of travel will also determine which kind of miles & points you’ll want to earn (and use!).

Oftentimes, for example, the best way to fly in business and first class is to book an award ticket with an international partner airline. This is where airline alliances and travel partners come into play.

The same goes for deciding your hotel loyalty, as some brands are better known for offering luxury accommodations than others. If you want a high-end hotel stay, you won’t be able to rely on Choice Hotel points! You’d be much better off earning Marriott points with a card like the Marriott Bonvoy Brilliant™ American Express® Card for stays at brands like Ritz-Carlton and Autograph Collection Hotels.

Do you value flexibility above all else?

Let’s face it; life can get pretty crazy, and sometimes things don’t always go as planned. Enter flexible rewards programs.

Flexible rewards points (aka bank points) are often overlooked in favor of miles & points earned directly from a specific airline or hotel. But in my opinion,  flexible rewards are the most valuable rewards currency available.

With bank points, you’ll be able to transfer the rewards you earn to a variety of different airlines and hotels. And with some, it’s even possible to redeem for cash back or to “erase” purchases off your credit card statement.

For example, with an American Express card that earns Amex Membership Rewards points, you’ll be able to transfer your points to 19 different hotels and airlines. Or you could open a Chase Ultimate Rewards points earning card like the Chase Sapphire Preferred® Card or Chase Sapphire Reserve®. Then you’d have access to Chase travel partners, like United and Hyatt.

With a card like the Capital One Venture Rewards Credit Card, you can transfer your miles to travel partners or use your miles for nearly any travel purchase, like taxi rides, hotels, room service, and free flights by simply “erasing” them with your rewards.

And lastly, you could also just focus on earning good old fashioned cash back. There are many different cash back credit cards, so you’re sure to find one that aligns with your spending habits. Earning cash back is a fantastic and hassle-free way to earn rewards you can use to directly offset the cost of travel — without having to worry about award charts, transfer partners, etc.

What are your spending habits?

Your spending habits, like how much spend you put on a credit card each month and where you spend your money, will also impact your decision when it comes to deciding which kind of travel rewards to earn and use. When you think about what type of rewards you should be earning, think of what type of rewards you can earn.

Big spenders will be more easily able to earn welcome bonuses that require larger amounts of minimum spending. And those that spend more regularly on dining or travel will do better focusing on staying loyal to programs and credit cards that offer bonuses in those categories.

For example, the Chase Sapphire Reserve® earns 3x Chase Ultimate Rewards points on both travel and dining. There aren’t any co-branded airline or hotel cards that can compete with that. So if you spend a lot eating out, earning these types of flexible rewards would likely be a more lucrative path than earning airline or hotel rewards specifically.

What’s your home airport?

Another valuable step in determining your rewards strategy is to find out which airlines fly from your home airport. That way, you can take advantage of airline alliances to get you where you want to go.

For example, if you live in Austin, Southwest is the airline with the most flights!  So collecting Southwest points or Chase Ultimate Rewards points is likely your best bet because Chase Ultimate Rewards transfer to Southwest at a 1:1 ratio.  Plus, they transfer to other larger airlines like United Airlines too.

But if you live in Atlanta and plan to take more international trips, you’d likely be better off being loyal to Delta and earning Delta miles. If this were your plan, you’d be better off being a Delta cardholder or earning American Express Membership Rewards points that transfer to Delta at a 1:1 ratio.

Bottom line

The type of rewards you should be earning is the type of rewards that are right for you. Travel rewards are not a one size fits all model, and it’s okay if your needs and wants are different than others!

Ask yourself the right questions to get an idea for which rewards will best suit you. Regardless of the type of travel rewards you decide to earn, the fun part comes after when you get to redeem them!

Featured photo by Roman Samborskyi/Shutterstock.