Turn shopping into free trips: Your guide to credit card travel rewards

Looking over your holiday shopping list and feeling the pinch? Here's something to smile about: That upcoming spending could actually fund your next vacation. Just last month, I booked a round-trip flight to Turkey that would have cost about $1,200, but I paid exactly zero dollars thanks to credit card rewards earned from my regular expenses.

Whether you're planning to visit loved ones, escape winter weather or explore new destinations, your everyday spending can help get you there. How that works in real numbers: If you spend $4,000 over three months on some credit cards — which includes regular bills like utilities, insurance, groceries and other expenses — it could earn you enough points for multiple free domestic flights or several nights in a hotel. And with the holiday shopping season right around that corner, reaching that spending requirement might not be such a stretch.

Let's explore how to turn your spending this holiday season into travel opportunities that can help you see more places with more money in your pocket.

In this article:

• Travel rewards basics: What are points and miles?

• How to choose a rewards credit card for free travel

• How to turn your points and miles into travel

Why now's the perfect time to start

Here's why the holiday season is an ideal time to jump-start your travel rewards journey:

• Gifts and decorations. The holiday season is a time when many of us spend more on gifts, decorations and celebrations with loved ones. By channeling these purchases through a rewards credit card, each one becomes an opportunity to earn rewards that could fund your next adventure.

• Winter utility bills. Heating expenses tend to be higher, especially in colder regions, where bills spike from December through February. By paying these larger costs with a rewards card, you can accumulate significant points during these months. Some utility companies even allow you to prepay or overpay your bill, helping you progress toward the spending threshold on a new credit card's welcome or bonus offer.

• Annual membership renewals. Some annual subscriptions and memberships renew around the new year. Consider paying these renewal fees using your card to earn rewards and meet the minimum spending requirement for for any new card bonuses.

Charging these expenses to your credit card enables you to rack up points or miles without changing your regular spending habits.

On top of that, some rewards cards provide valuable protection for those big-ticket holiday purchases. For example, if you buy your grandchild a laptop that gets damaged within 90 days, eligible cards might reimburse you up to $1,000 per claim. Even better, many cards automatically extend the manufacturer's warranty — so that one-year warranty on a new TV could extend to two years at no extra cost.

The best part is that credit card companies compete heavily for new customers during the holiday season, often offering their most generous welcome bonuses. While these enhanced bonuses appear periodically throughout the year, the holiday season consistently brings some of the most valuable opportunities.

Dig deeper: 5 places where your credit card benefits you more than your debit card

Travel rewards basics: What are points and miles?

Before diving into specific reward travel strategies, it's important to understand the different types of rewards you can earn. Think of travel rewards like different types of currency — some can only be spent at specific places, while others offer more flexibility. Each type has its own advantages, and knowing the difference helps you choose the right card for your travel goals.

Putting cashback credit cards aside, these are the most common types of rewards credit cards offer:

• Fixed-value points. These are the simplest rewards to understand: They work like cash for travel purchases. If you have 50,000 fixed-value points worth 1 cent each, that's $500 you can spend on any travel purchase. While you might not get the most flexibility or value, you’ll enjoy the simplicity of using these points.

• Flexible points. Think of these as the Swiss Army knife of travel rewards. Credit card rewards programs like Chase Ultimate Rewards and American Express Membership Rewards let you transfer points to multiple airlines and hotels, or book travel directly through their travel portals. This gives you many more options for flights, hotels and more, but at the cost of more research.

• Airline miles. These rewards are specific to one airline and its partners. For example, United MileagePlus miles can be used on United flights or their Star Alliance partners. They often provide the best value for premium cabins and long-haul flights, but you're limited to that airline's (and its alliance) routes and availability.

• Hotel points. These rewards work with specific hotel chains and their partners. Marriott Bonvoy points, for instance, work at brands like Westin, Sheraton and Courtyard. They're great for free nights and upgrades, plus you usually get elite status perks — like late checkout or room upgrades — with their credit cards.

Why flexible points are my favorite form of rewards

I like flexible points because they give me many travel options over fixed-value points or airline and hotel rewards. For example, I can use my Chase Ultimate Rewards points in these ways:

• Book travel directly through the Chase Travel portal. This includes booking flights, hotels, car rentals, cruises and tours, paying for them with points or points and cash if I don’t have enough points to cover the entire cost.

• Transfer points to airlines or hotels. This includes transferring points to partners like United, Southwest, Emirates, Hyatt and Marriott Bonvoy to book directly with them using their own rewards currency.

• Pay yourself back. This means using credit card to pay for my travels, then using the Pay Yourself Back feature to cover the charge with my points. This option doesn’t provide the best value, but it can be useful at times.

These redemption options aren’t exclusive to Chase. Major credit card issuers like American Express, Capital One and Citi offer similar options that help you extend the value of your rewards.

On top of that, flexible rewards programs frequently offer transfer bonuses, where you'll get extra points or miles when moving your rewards to certain partners. For example, you might get 30% extra miles when transferring to Virgin Atlantic, making your points even more valuable.

Here’s how major credit card rewards programs compare

These programs each serve different types of travelers, but some stand out for their overall value and flexibility. Chase Ultimate Rewards and American Express Membership Rewards lead the pack with strong transfer partners and excellent redemption options. Both programs also partner with major airlines across all three global alliances — Star Alliance, OneWorld and SkyTeam — giving you access to flights worldwide.

Capital One and Citi have also strengthened their programs significantly in recent years, adding valuable transfer partners and improved redemption rates. Wells Fargo and Bilt Rewards are relative newcomers to the flexible rewards game that quickly grew in popularity with growing lists of transfer partners.

✨ Points on rent. Bilt Rewards deserves a special mention as it's the only rewards program that lets you earn points on rent payments, which could add up to significant rewards on an expense that typically earns nothing.

The simpler programs like U.S. Bank and Discover work well if you prefer straightforward redemptions without tracking transfer partners or award charts. With these programs, you can simply use your points to cover travel purchases on your statement, similar to cash back. While you might not get the outsized value possible with transferable points, you'll never have to worry about blackout dates or award availability.

Dig deeper: What happens to your credit card balance and rewards when you die

How to choose a rewards credit card for free travel

There’s a number of factors to consider when selecting the right travel rewards credit card. While the variety of credit cards available can seem overwhelming, understanding your travel goals and spending habits will help narrow down your options.

• Annual fee. Think of how much you’re willing to pay each year. While no one likes paying their card’s annual fee, the best travel rewards cards easily make up for their annual fees with travel credits, airport lounge access and other travel perks. For example, if a card's airport lounge access would save you $30 on meals each time you travel, those savings can quickly justify the fee.

• Travel benefits. Decide what matters most to you when traveling. Do you check bags often? Want airport lounge access? Need rental car insurance? These perks can save hundreds of dollars per trip.

• Point flexibility. Consider the available transfer partners based on who you typically travel with or visit. For example, if family members frequently fly United Airlines, a card that transfers to United would be valuable. While airline-specific cards can work well for loyal customers, transferable points provide more flexibility across multiple airlines and hotels.

• Welcome offer requirements. Look at how much you need to spend to earn the initial offer, and make sure it aligns with your normal spending habits. You shouldn't have to stretch your budget just to earn rewards.

• Earning structure. Choose a card that rewards you most for your regular spending patterns. If you dine out frequently, look for cards with restaurant bonuses. If you spend more at grocery stores, prioritize that category instead.

My favorite travel credit card options

After qualifying and using numerous credit cards over the years, these three stand out for their great mix of valuable rewards and useful travel benefits that serve different types of travelers.

• Chase Sapphire Preferred. This is a perfect starter travel credit card for someone who’s dipping their toes into the travel rewards space. The Sapphire Preferred offers solid travel insurance, including primary rental car coverage — a rare benefit nowadays. Your points are worth 25% more when booking through Chase's travel portal, making it easy to get good value even if you're new to points and miles. And you can transfer your points to popular airlines and hotels.

• American Express Gold Card. This card is a foodie's best friend thanks to its high earning rates, whether at restaurants or grocery stores. It comes with monthly dining credits, Dunkin credits and Uber credits that you can use at Uber Eats. Its rewards program excels at airline transfers, with 18 airline partners under its belt.

• Capital One Venture X. This premium travel card is a great companion for frequent travelers thanks to its extensive benefits. It comes with Priority Pass and Capital One lounge access, $300 annual travel credit and 10,000 anniversary bonus miles that you can redeem through Capital One Travel or transfer to 15 airline and hotel partners. It also offers $120 credit every four years for Global Entry or TSA PreCheck to speed up your airport security experience.

Dig deeper: How to pay off your credit card balance

How to turn your points and miles into travel

Once you earn enough points or miles on your credit card, it’s time to redeem them for free travel. Let’s walk through the main ways to turn your credit card rewards into memorable trips.

Redeem via your card’s travel portal

Credit card travel portals work similarly to familiar booking sites like Expedia or Kayak, but with the added ability to pay with points. For example, the American Express and Chase travel portals let you book everything from flights and hotels to rental cars and activities. When searching through these portals, you'll notice that they list prices in both dollars and points.

For example, a main cabin seat on a one-way Delta flight from Chicago to San Francisco on February 4, 2025, costs either $173 or 17,297 American Express points. American Express gives you the flexibility to pay with points, cash or a combination of both.

The same applies to hotel bookings. For example, a three-night stay at the Serenity Hotel Boutique in Playa Del Carmen, Mexico, costs either $428 or 33,794 Chase points plus $6. Notice how you can choose between refundable and nonrefundable rates, just like when booking with cash.

Travel portals make it easy to compare options and understand exactly how many points you need. Plus, when you book through your card's portal, you often get better redemption rates than converting points to cash back.

Book travel through transfer partners

While travel portals offer simplicity, transferring points to airline and hotel partners often provides better value.

For example, the same Delta flight from Chicago to San Francisco for the same date costs 14,000 Delta miles plus $5.60 when you transfer your American Express points to Delta. That’s about 3,000 points cheaper than booking directly through the Amex Travel portal.

Popular free tools like PointsYeah and AwardTool help you find this kind of award availability across multiple airlines. They show you which transfer partners offer the best rates for your desired route and even guide you through the transfer process.

Remember that most transfers are one-way — once you move points to an airline or hotel, you can't transfer them back. You'll want to confirm award availability before transferring your points.

Maximize your value with transfer bonuses

Credit card programs frequently offer bonus points when transferring to specific partners. For example, you might see a 40% transfer bonus to Virgin Atlantic, meaning 50,000 credit card points are boosted to become 70,000 Virgin miles.

These bonuses can dramatically increase your points' value, especially when combined with sweet spots in airline award charts. That’s why you should always check current transfer bonuses before booking to ensure you’re getting maximum value.

Remember to keep checking prices

Even after booking, keep monitoring prices and award availability. Many airlines allow free cancellations on award tickets, so if you find a better deal later, you can often rebook at the lower rate.

Set price alerts on your preferred routes and check back periodically, especially during sales. I've saved thousands of points by rebooking when better options became available, particularly on international business class tickets, where award space can open up at the last minute.

FAQs: Credit card rewards and perks for travelers

To help you make the most of holiday spending opportunities, here are answers to frequently asked questions about credit card rewards and travel benefits.

Do I get credit card rewards for paying bills?

Yes, most regular bills earn rewards when you pay them with a rewards credit card, including utilities, phone bills, internet service and streaming subscriptions. Major exceptions are typically mortgage payments, rent (unless using the Bilt credit card) and some loan payments. Standard bills usually earn the base reward rate on your card — for example, if your card offers 1.5% back on regular purchases, that's what you'll earn on bill payments.

Can I pay my car insurance with a credit card?

Yes, most major auto insurance companies accept credit card payments without additional fees. Companies like GEICO, Progressive and State Farm allow you to pay your six-month or annual premium with a credit card, which can help you reach minimum spending requirements for welcome bonuses. Some insurers even offer a small discount for paying your full premium up front rather than monthly.

How do people travel for free with points?

You can travel for free by accumulating points through everyday spending and credit card welcome offers, then strategically redeeming those points for flights and hotels. For example, spending $4,000 in three months might earn you 60,000 points — enough for a few domestic round-trip flights or multiple nights at a hotel. You can also maximize your points’ value by transferring them to airline and hotel partners during bonus periods and booking during off-peak times when award travel costs fewer points.

Which credit card has the best travel benefits?

My personal favorite travel credit card is the Capital One Venture X. It provides access to Priority Pass and Capital One airport lounges worldwide, credits for Global Entry or TSA PreCheck and up to $300 in annual travel credits that work with any airline or hotel. Cardholders also receive 10,000 bonus miles on their account anniversary and robust travel insurance that includes trip cancellation, rental car coverage and lost luggage reimbursement. Plus, you can transfer your rewards to more than 15 airline and hotel partners or book directly through Capital One Travel, offering flexibility for how you use your points.

About the writer

Yahia Barakah is a personal finance writer at AOL with over a decade of experience in finance and investing. As a certified educator in personal finance (CEPF), he combines his economics expertise with a passion for financial literacy to simplify complex retirement, banking and credit topics. He loves empowering people to make informed financial decisions that improve their everyday and long-term wellness. Yahia's expertise has been featured on FinanceBuzz, FX Empire and EarnForex. Based in Florida, he balances his love for finance with freediving, hiking and underwater photography.

Article edited by Kelly Suzan Waggoner