Travel rewards credit cards: Which pay best?
— -- When it comes to redeeming all those accrued miles and points for travel, not all travel rewards credit cards are created equally.
For instance, for every $100 you spend on the card, you may get $2 worth of redemption value toward a flight using the Capital One Venture Rewards card while the Citi Platinum Select/AAdvantage World MasterCard may give you $1.04 toward one.
And the Starwood Preferred Guest card from American Express may be worth $2.50 toward a hotel stay for every $100 you spend compared with an 86-cent value toward a hotel room using the United MileagePlus Explorer card.
Or so a new analysis by consumer-research service NextAdvisor.com finds in calculating the value of 14 major travel rewards cards when points and miles are redeemed for travel.
The analysis provides a tool for deciphering some of the credit card offers that fill your mailbox and determining a card's worth to you as a traveler.
By NextAdvisor's analysis of the redemption value for both flights and hotel rooms, the top three cards are the Capital One Venture Rewards card, the Starwood Preferred Guest card from American Express and the United MileagePlus Explorer card.
At the bottom tier are Miles by Discover card, Chase Sapphire and the Citi Platinum Select/AAdvantage World MasterCard.
To cut through the fog of miles and points, as well as flight and hotel room availability, NextAdvisor sought to use the cards to book airline tickets and hotel stays on the same dates in the summer and fall for its analysis.
The company averaged the redemption value of the flights and hotel rooms to rank the cards. You can read more about the methodology here.
There are other factors beyond redemption value to consider when selecting a travel rewards card.
Airline and hotel rewards cards generally carry higher interest rates than non-proprietary cards. So you may be able to purchase more rewards travel using Platinum Delta SkyMiles from American Express or the Citi Hilton HHonors Visa Signature card, but it may not be worth using them if you carry a balance on the accounts and have to pay higher interest rates at the end of the month.
The NextAdvisor analysis did not calculate extra perks — ranging from waivers on bag fees to room upgrades — that you may get using the United MileagePlus Explorer card, for example, vs. a card such as the Escape by Discover card.
And it wouldn't make sense to apply for the Southwest Airlines Rapid Rewards Plus card from Chase if you don't fly Southwest.
It's also wise when choosing airlines or hotel cards to research who their airline and lodging partners are. You can often redeem travel with them, too, albeit often at less attractive values.
"This study considers very basic credit card-earning ability," says mileage guru Randy Petersen of Milepoint. "I might suggest that potential card holders also look at offers by each card to accelerate their earning, such as cards that earn double miles or points for online purchases or even for gasoline and grocery purchases. These everyday categories are the most common that make each credit card more valuable than others.
"When considering any credit card value, the most important consideration is the value for what you plan to use the rewards for," Petersen says.
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