What are travel credit cards and how do they work?

Travel credit cards can help you earn rewards to use on airfare, hotel stays and more. And many come with exclusive benefits and perks to help make travel smoother and more enjoyable.

But before you apply for a travel credit card, it’s important to know how they work. Learn about the types of travel credit cards, how to redeem your rewards and more.

What you’ll learn:

• Travel cardholders can typically earn rewards by using their cards to make purchases. Some travel cards may only offer rewards for certain types of purchases.

• Travel cardholders can typically redeem rewards for travel-related purchases, such as airline tickets, hotel reservations and vacation rentals. Some travel cards may offer additional ways to use rewards. 

• Travel credit cards may come with perks like welcome bonuses and other travel credits. 

• Common types of travel cards include airline, hotel and general travel rewards credit cards.

With travel credit cards, you typically earn rewards in the form of points or miles by making eligible purchases. You can use a travel card as you would any other credit card. Eventually, you can redeem your rewards for travel-related purchases. Some travel cards offer additional ways to earn and use rewards.

One important thing to note is that travel cards may offer different rewards programs. Some travel cards may only offer rewards for certain types of purchases, like gas, groceries or dining out. Others may let you earn miles on every purchase you make. 

Some travel cards may offer a flat rewards rate for all purchases. Others may offer a higher rate on travel-related purchases.

Travel credit card miles and points often work similarly. Sometimes, the main difference is simply what the credit card issuer chooses to call their travel card rewards. The way that miles or points are earned and redeemed also depends on the issuer.

Common types of travel rewards credit cards are airline, hotel and general travel cards. Here’s how each type of travel card works.

With an airline credit card, you can earn rewards to use with a specific carrier. Depending on the card, your rewards could be redeemed for everything from plane tickets to free checked bags and priority boarding.

Hotel credit cards reward loyalty to a specific hotel or hotel chain. With a hotel card, you may earn rewards to redeem for rooms, potentially including free nights at the hotel. 

You may also get to enjoy benefits just for cardholders. They can include things like complimentary breakfasts, room upgrades and concierge service.

With a general travel rewards credit card, you’re typically not tied to a single airline or hotel. That can give you more choices. For example, you may be able to use your rewards at a variety of airlines and hotels. Travel purchases like rental cars, vacation rentals and train tickets could be other options. 

The flexibility of general travel cards may also mean you can book flights and hotel rooms when you want, without blackout dates and other restrictions. 

What about extra perks and benefits that help make travel more convenient? General travel credit cards may give you those, too. Some offer a statement credit toward TSA PreCheck® or Global Entry, programs that can help you skip long lines at airport security or customs. Some cards may also waive foreign transaction fees to help you save money when you make purchases outside the U.S.

Generally, travel cardholders can redeem their rewards in a variety of ways. While redemption avenues may vary depending on the card issuer, these options apply to Capital One travel cards.

• Book travel. If you’re ready to see the world, you could sign in to your card issuer’s online travel portal to redeem miles for flights, hotels, rental cars and more.

• Get gift cards. If travel’s not in your near future, you may be able to redeem your miles for digital and physical gift cards. 

• Redeem miles for cash back. Like the idea of having extra cash on hand? Turn your miles into cash in the form of a check or statement credit on your card account.

• Shop with your miles. Some card issuers allow you to shop using your miles. For instance, you can use Capital One travel rewards to pay for purchases at Amazon.com or at online stores through PayPal.^1,2

• Transfer rewards to a travel partner. Redeem rewards by transferring them to the loyalty program of one of your card’s miles transfer partners. Then you can typically book flights, hotel stays and more through the travel partner’s site.

As with any credit card, it’s important to use your travel credit card responsibly. If you do, it can be a great tool, especially for frequent travelers. 

Here are a few ways to maximize a travel card’s benefits and rewards.

• Know how to earn bonuses. Some travel cards may offer a bonus for spending a certain amount during a set period after you open your account. Understanding the details, timing and spending requirements could keep you from missing a good opportunity. 

• Make the most of benefits. Being familiar with your card’s travel benefits could help you get the most out of them. Benefits may include everything from travel insurance protections to savings on ride-hailing services. Exclusive access to airport lounges could be another perk.

• Use your full range of redemption options. Your options for redeeming your rewards may vary from card to card. Some may allow you to redeem rewards for cash back, for example. Others may let you transfer miles to the loyalty programs of qualifying hotels and airlines. Just keep in mind that the value of your rewards may vary, depending on how you use them.

• Book through your card issuer’s travel portal. When you book trips through your card issuer’s travel portal, you could earn a higher rate on your purchases. If you’re a Capital One cardholder, Capital One Travel can help you save an average of 15% by alerting you when it’s time to book.³ And depending on your card, you can earn up to 10X miles on hotels, vacation rentals and rental cars and 5X miles on flights.

If you’re wondering whether a travel rewards card is right for you, here are some things to think about.

Possible benefits of having a travel rewards card may include:

• Chance to earn rewards: Depending on the card, you could earn rewards for both travel purchases and everyday expenses. Then you can redeem your rewards for upcoming travel.

• Variety of cards: Today’s choice of travel cards means you likely can find one that works with your spending habits and travel preferences. 

• Flexible ways to redeem: Travel cards typically offer a range of ways to redeem rewards. They can include booking travel, getting gift cards and receiving cash back.

• Enhanced benefits: Some travel cards may come with enhanced perks. They can include things like priority boarding and access to airport lounges around the world.

• Welcome bonuses: Some rewards cards may offer a bonus for opening an account.

Downsides associated with a travel rewards card might include:

• Annual fees: Like other types of credit cards, some travel cards may come with an annual fee. It may help to weigh a card’s benefits against its annual fee to see whether it makes sense for you. 

• Higher credit score requirement: Travel cards may require a higher credit score compared with other types of cards.

Here are answers to frequently asked questions about travel credit cards.

Travel credit cards let you earn rewards to use on travel-related expenses. Those can include airline tickets, hotel stays and more. You also may be able to enjoy exclusive benefits and perks that come with many travel cards.

Capital One offers travel rewards credit cards with exclusive benefits and elevated rewards that can help make your travel experience more enjoyable. View important rates and disclosures.

• Explore travel rewards cards with unlimited miles you can actually use. 

• Earn a one-time 75,000-mile bonus and receive an additional 10,000 bonus miles every year, starting on your first anniversary, with the Venture X card.

• Earn unlimited 2X miles on every purchase, every day, and earn a one-time 75,000-mile bonus with the Venture card. 

• Earn unlimited 1.25X miles on every purchase, every day, with no annual fee with the VentureOne card.