The Ins and Outs of Credit Card Points


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The Ins and Outs of Credit Card Points

By Roger Tran

I went to Mardi Gras in New Orleans for five days, and it barely cost me more than the loose change I found in my sofa cushions. I’ve explored New York, Chicago, Portland, and other great American cities for not much more. When I flew to Japan I shelled out some minimal taxes and fees, and that was it.

My secret? Credit cards rewards programs.

Credit card issuers want you to use their cards. They want you to be loyal. In return they give you points you can redeem for the things you want. (In my case, as you can tell, that’s travel.)

My credit card rewards program history began in 2012, when I signed up for an American Airlines credit card offer that included 75,000 AAdvantage points if I spent $3,000 in three months. Those points took me to Washington, DC, Chicago and Cancun from my home in California. All I paid was the taxes for those flights.

A credit card geek was born. Here’s what I’ve learned in the years since.

Choose your reward

Depending upon the program, the points you earn using a credit card can go towards:

  • Cashback
  • Air travel
  • Hotel stays
  • Flexible points

Here are the types of programs you’ll find:

Cashback: These generally reward you with points equal to 1-2% of what you spend, with a bump to 2-5% for specific categories.

Airline-specific rewards: Issues by an airline, spending earns airline miles for that airline. Again, points are often tiered, with more points given when the card is used for tickets on that airline.

Hotel-specific rewards: Similar to airline rewards. Note that many major hotel brands own multiple brands. Marriott, for example, also owns Ritz-Carlton, St. Regis, JW Marriott, W, Sheraton, Westin, Gaylord, and several others.

Flexible rewards: Here you’ll accrue points that can be used for a variety of rewards. These cards can be a good choice for someone who isn’t loyal to a particular brand or uses multiple airlines and hotels.

Sometimes card issuers will offer other perks, such as early bird concert tickets or special deals on products. Banks will offer bonuses to existing customers who sign up for one of their credit cards. There’s a dizzying array of options, and it’s easy to get lost in the many choices.

The key is to choose your goal(s) and work backwards. If you love to travel (guilty!), cards that offer points redeemable for airline tickets and hotel stays are the obvious choice. Once you choose a rewards category, your choices become easier.

Quick rules of thumb

Do the math, but don’t get too hung up on fees. Many worthwhile cards have annual fees. If the annual fee is $95 and you earn $2,000 in travel, it was $95 well spent.

Earn and burn: Airlines and hotels devalue redemption over long periods of time, so there’s little incentive to wait to use them (unless you’re “saving up” for an epic trip). Use and enjoy the miles you earn, and then earn and use some more.

Plan backwards from your destination: Look into travel and lodging options for your dream destination. You’ll be surprised to find out how many potential loyalty programs match your plans. And a bonus: studies show that the act of planning or anticipating a trip can also lead to increased levels of happiness.

Be organized: Credit card rewards are really about gamification. Missing an important deadline can mess up your whole plan. Make sure you track:

  • Card/loyalty program
  • Application date
  • Bonus “spend by” date
  • Spend amount
  • Annual renewal date
  • Annual fee

You can use a notebook, a spreadsheet, or a specialized app/program such as AwardWallet.

Read the fine print: Make sure you know when points expire, how often you have to use a card, what happens to your points if your payment is late. You don’t want to lose thousands of points because you missed a deadline.

Review your account: Many cards have residual benefits, such as free points or a free night’s stay on your sign-up anniversary. You should also close accounts with annual fees when you’re no longer receiving value.

Start small: After researching new cards that can help you take your dream trip(s), begin with 1-2. Credit card companies often offer lucrative sign up bonuses to incentivise you to open new cards, but don’t get caught up in that. You can always add cards later once you’ve learned more about loyalty programs and your travel. Many hotel chains offer a free night or two for a relatively low “spend” amount. World of Hyatt offered two nights free at any Hyatt

property worldwide, along with a $50 credit, and I only had to spend $1,000 in three months.

Timing matters: For example, once you qualify for the Southwest Airlines Companion Pass and it is awarded, it is valid for the rest of the current calendar year and the entire following calendar year. I extended the usefulness of the companion pass by hitting the “spend” requirement at the right time. With the two programs above, I stayed in a $900/night Park Hyatt in Beaver Creek Colorado. I also earned free airfare for two. The total cost for a $2,400 trip for two was $67.40 for various taxes and fees.

Use credit wisely

Before you sign up for any credit card, make sure you understand how to use your credit wisely. Running up balances and making minimum payments or late payments can cause your credit score to plummet. Opening a new credit card or two won’t damage your score, but not being smart about using credit will. We’ve laid out everything you need to know about credit and credit scores here, here, here, and here.

Common mistakes

  1. Not paying your statement balance in full
  2. Not meeting minimum spend requirement
  3. Canceling the card immediately after receiving the bonus offer
  4. Not applying for business cards to support your side hustle
  5. Not understanding the rules for each card issuer
  6. Use it or lose it – letting points expire
  7. Not opening a card because it has an annual fee


Here are some helpful sites if you want to become a master at credit card and travel rewards.







And above all, happy traveling!

Facet Wealth is not affiliated with, nor giving endorsement to, any points rewards system with a specific airline carrier, hotel chain or credit card provider. Facet Wealth received no compensation for this post.  

Interested in learning more on how you can make the most of your credit rewards program? Check out our lunch & learn here. 

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