Earn travel points for your everyday credit card spending and enjoy free flights, airport lounge access, upgrades and other perks.
Be rewarded for your spending when you use a travel rewards credit card, and earn points toward your travels. These are great cards for the avid traveller and in addition you can usually collect thousands of bonus points when you sign up for a credit card with an introductory offer. As well as points, some travel rewards credit cards also offer travel perks, including complimentary insurance, airport lounge access and flight vouchers.
Our guide covers how travel rewards credit cards work, the pros and cons, as well as factors you should compare when considering which travel credit card may be right for you.
Based on the bonus point offers, rewards programs, points per dollar spent and the rates and fees that apply, you can learn about the different travel rewards credit card options offered in Canada and make the most of your credit card and rewards.
Purchase interest rate
Starwood Preferred Guest Credit Card from American Express
Apply today and receive 50,000 bonus points when you spend $1,500 within first 3 months of card membership.
- Purchase interest rate: 19.99%
- Cash advance rate: 22.99%
- Annual fee: $120
- Minimum age: Age of majority in province/territory of residence
Compare travel rewards credit cards
How to get bonus points with a travel rewards credit card
Many travel rewards credit cards will offer introductory bonus points in order to get you to sign-up for the card. Some cards will offer 50,000 or even 100,000 bonus points as an introductory bonus, which can sometimes be enough to get you to another continent by only using your points. While this may sound like a great offer, there is typically always a catch.
The catch will often involve the provider setting a spend requirement, where you have to spend a certain amount of money within a given time period, usually one month, in order to qualify for the full set of points. If you read the fine print of the offer, you may discover that you must spend $5,000 in one month in order to qualify for the points. Although you may manage to spend this in one month, you may also discover that only “eligible purchases” qualify for the points. So while everyday purchases like groceries, gas and clothes may count towards the $5,000 total, other purchases like cash advances or payments for certain bills via your credit card may not count.
Always be aware of the terms and conditions of a credit card before you commit to a new card.
Travel rewards credit cards give you a way to earn points on your everyday spending by offering a set number of points for every dollar spent (such as 1 point for $1 spent or 1 point for $2 spent) on eligible purchases. This means the more you spend, the more points you can rack up. There are different ways to earn and redeem reward points depending on the type of credit card you choose and the rewards offered by the provider.
Some travel rewards credit cards send points directly to your account and other rewards credit cards allow you to transfer points to a variety of other eligible travel reward accounts, like Air Miles cards. For example, you may be able to transfer points between an American Express card and a Starwood card. Your card may also have tiered earn rates – different earn rates depending on the type of purchase – and points caps that reduce or limit points earnings after you spend a certain amount each statement period. As your points are debited to your account, you can redeem them for a variety of rewards including flights, upgrades, accommodation and plenty of other perks.
Is a travel rewards credit card worth it?
If you’re interested in getting a travel rewards credit card, weigh up these pros and cons to decide if it will be worth it for you:
Benefits you typically receive with a travel rewards credit card
- Redeem flights and travel upgrades faster. If you’re earning points every time you spend with your credit card, you can maximize the number of points you’re earning and reach your reward goals faster. Points can likely be used toward both domestic and international flights, as well as perks like business class upgrades, seat upgrades, dining upgrades and airport lounge access.
- Sign-up bonus points. Some credit cards offer introductory bonus points as an incentive for new customers to sign up. Depending on the card, you could earn up to 100,000 bonus points (or more) when you meet the spend requirement. Not only will this give your points balance a boost, but it’s also another way you can redeem rewards more quickly.
- Large range of rewards. You can use the points you earn to redeem rewards including flights with your preferred airline and its partners, hotels, online shopping and more.
- Travel perks. Designed to suit frequent flyers and travellers, these cards often come with extra features such as flight vouchers, airport lounge passes and 24/7 concierge services.
- Complimentary insurance. Many travel rewards credit cards come with complimentary travel insurance, which can help you save on stand-alone insurance costs when you’re travelling.
Disadvantages of a travel rewards credit card
- High interest rates. Travel rewards credit cards often come with less competitive interest rates than other cards. This means they are suited to cardholders who consistently pay off their balance each month and can therefore avoid high interest charges that may outweigh the value of the rewards.
- Expensive annual fees. As well as high interest rates, travel rewards credit cards typically come with higher annual fees than standard credit card options. You should make sure that the value of the points you can earn and the extra features of the card can outweigh the annual fee before you apply.
- Temptation to spend. If you struggle to repay your credit card on time each month or you need to consolidate a debt, a travel rewards credit card might tempt you to spend for the sake of receiving points, when instead you should be trying to prevent any unnecessary purchases. If you are struggling to pay off an existing debt, you might want to consider a card with 0% on balance transfers instead.
- Airline and flight restrictions. If you want to use points for flights or upgrades, you will likely be limited to a specific airline or alliance of airlines. There may also be blackout dates or limited availability for reward flights and upgrades. While you may find a better or cheaper flight with another airline, you could be incentivized to fly with your loyalty airline to accumulate the additional points that often come with this offer.
- Offer requirements. Travel rewards credit cards that come with introductory offers or complimentary insurance may have specific spending requirements you need to meet to enjoy these benefits. For example, you may need to spend $5,000 in the first 3 months that you have the card to get bonus points, or you may have to pay for travel with your credit card to get travel insurance. Make sure that the spend requirement is realistic with your budget and monthly spending before you’re enticed by the promise of bonus points.
How can I compare and find the best travel rewards credit card for me?
With a large variety of travel rewards credit cards in Canada, you have plenty of options to discover a card that suits your travel goals and financial circumstances. You should compare the following key factors when choosing the best travel rewards credit card for you:
- The travel rewards program. Choosing a credit card that earns points for a specific travel program you already use will help you maximize your rewards. For example, if you exclusively fly with WestJet, you wouldn’t get as much value from a card that offered British Airways points. If you don’t belong to a program yet, think about which airline(s) you travel with the most and look at their loyalty program options.
- Points earning rate. Check the standard rate of points you’ll earn for each dollar spent on the card. Be aware that a different earn rate could apply for certain types of spending, such as overseas purchases. There are usually some transactions that won’t earn points – such as cash advances and gambling transactions – and there may be a limit to the points you can earn each month or year, so make sure you check restrictions for the cards you’re comparing.
- Reward values. Consider the types of rewards you want to claim, the number of points you’ll need and how much you’d have to spend to redeem your preferred reward. Check how these values measure up between programs, so you can apply for the card that offers the greatest value based on your spending and reward goals.
- Annual fee. Ideally, the card’s annual fee should cost less than the rewards and any complimentary extras that you intend to use. If you don’t reap these rewards, it may not be worth paying a high annual fee for the card.
- Promotional rates and features. Travel rewards credit cards sometimes have promotions for new customers, such as bonus points, 0% purchase rates or no annual fee for the first year. These benefits can add value to the card that you choose, but make sure you read the terms and conditions and confirm the length of the introductory period so that these offers work for you.
- Complimentary extras. Travel rewards credit cards often come with a selection of complimentary extras such as international travel insurance, extended warranties, concierge services and airline lounge access. The value of these perks can be used to offset the cost of the annual fee of the credit card, as long as you know you will actually use them.
How to earn and redeem travel rewards points with a credit card
When you’re comparing a travel rewards credit card, there are two different options to consider:
Using your travel rewards points
Once you’ve earned enough points, you can redeem them for a variety of rewards, depending on the provider. Here are some examples of popular rewards you could redeem with your travel rewards program.
- Gift vouchers
The number of points you need for a reward varies depending on the travel rewards program and the type of reward you choose. There are two main categories for rewards:
- Airport and flight benefits. Points can be used for rewards flights, flight upgrades, lounge benefits and other membership benefits. Flight rewards with the travel reward program’s associated airline usually provide a higher point value when compared to other rewards.
- Retail and lifestyle rewards. These rewards can benefit you at home or overseas. You can use points to book hotels, car rentals or other travel experiences as well as more general retail and lifestyle benefits such as gift cards, food, wine, jewellery and other merchandise. As mentioned above, flight rewards usually offer more bang for your buck than retail rewards, since these cards cater to frequent travellers.
FAQs about travel rewards credit cards
If you want to know more about travel rewards credit cards, check out these answers to the most popular questions we’re asked about them – including how to earn and redeem points. If you still have a question, get in touch with us using the “Ask a Question” box below and we will respond to your query.