Earning and redeeming miles and points are great. But what happens if you do not have enough rewards to book your trip? Then you need to pay the travel expenses (namely air fare, hotel and car rental). So what’s the best credit card to optimize the return on your rewards?
I would say, below are the top 3 credit cards to choose from:
- $150 annual fee (waived the first year)
- Earn 2 points for every $1 spent on travel (flights, hotels, car rentals, cruises, etc.)
I value American Express Membership Rewards points at 1.8 cents a piece, which means that you are getting a 3.6% return on your purchase. Watch for transfer bonuses, like the current 25% transfer bonus to Executive Club.
- $120 annual fee
- Earn 1 points for every $1 spent on all purchases
I value 1 Starpoint at 2.3 cents a piece, so that’s a 2.3% return. What makes Starpoints even more valuable is when you transfer at least 20,000 Starpoints, you get a bonus 5,000 miles with its airline partners.
- $120 annual fee (get 50% rebate on the first year if you apply before February 29, 2016)
- Earn 9 points for every $1 spent on travel online through Expedia
- Earn 6 points for every $1 spent over the phone through either Expedia or the TD Travel Rewards Centre
Note that TD rewards as redeemed as follows:
|First 300,000 points||$1,200|
|200 Points (when redeeming 300,000+ points)||$1|
That means, when you:
- Earn 9 points for every $1 spent on travel online through Expedia = 3.6% return
- Earn 6 points for every $1 spent over the phone through either Expedia or the TD Travel Rewards Centre = 2.4% return
The return gets better when you redeem more than 300,000, when you:
- Earn 9 points for every $1 spent on travel online through Expedia = 4.5% return
- Earn 6 points for every $1 spent over the phone through either Expedia or the TD Travel Rewards Centre = 3% return
I would only use this credit card if you make purchases with Expedia. Otherwise, this isn’t that great of a credit card.
You can also consider the:
- MBNA Rewards World Elite MasterCard
- Capital One Aspire Travel World Elite MasterCard
- BMO World Elite MasterCard
which all give you a 2% return on all your purchases.
There are enough credit cards to choose from that give you at least a 2% return on your travel purchases. Also note that all of the above credit cards offer a fair amount of travel insurance, which helps justify the annual fees that are due.
If you are curious, I personally put all my travel expenses on the American Express Gold Rewards Card or the Capital One Aspire Travel World Elite MasterCard.