Rewards Programs Benefits Decoded
Rewards programs are used by businesses to encourage customer loyalty and repeat business by offering incentives such as points, discounts, or exclusive offers. And they can be the best friend to the frequent traveler.
How so?
Rewards programs come in many different forms and from many different companies. For example, lots of stores and restaurants offer them, where you can earn points towards discounts or free meals.
But my favorites, and the ones we are interested in, are travel rewards programs. These are the ones that reward you for traveling. And where you can use the rewards towards more travel, for discounts, upgrades, and even free travel!
Travel rewards programs can significantly enhance your travel experience and save money when used strategically.
Here are the main types worth considering, and how they work.
Airline Loyalty Programs
Airline loyalty programs are the bomb!
These programs reward you with miles/points for flying with a specific airline or its partners.
The simple model is earning one mile/point per mile flown. Then, once you accumulate enough miles/points, you can use them towards booking a flight. You are effectively purchasing the flight with miles/points instead of cash, and getting a free flight.
Additional benefits typically include:
- Priority boarding and seat selection
- Complimentary upgrades to premium cabins
- Waived baggage fees
- Access to airport lounges at higher tiers
- Bonus miles for frequent travel
Elite status levels (like Silver, Gold, Platinum) unlock progressively better perks, including more miles/points earned per mile flown.
Most major airlines have loyalty programs. And many also have an associated credit card, where you also earn miles/points for each dollar charged. I didn’t realize what a big benefit this was, and neglected to take full advantage of it right away. Big mistake, that I’ve since corrected!
The key is choosing an airline (or two) that you’ll be able to fly the most often, that serves your most common routes well. You don’t want to spread yourself too thin, or you won’t see the most benefit from this.
Hotel Loyalty Programs
Hotel loyalty programs are similar to airline loyalty programs. You probably stay at hotels on most of your trips, so this is another one you’ll definitely want to take advantage of.
Hotel chains offer points for stays at their hotels, and sometimes at other partners.
Accumulate enough points, and they can be redeemed for free nights. Again, similar to airline programs, you are paying for your stay with points.
Additional common benefits include:
- Room upgrades
- Late checkout and early check-in privileges
- Complimentary WiFi and breakfast
- Bonus points for stays during promotions
- Access to executive lounges and premium amenities
Most major hotel chains have loyalty programs. And it is worth noting that these chains consist of many different hotels. For example, Marriott Bonvoy includes Marriott, Residence Inn, and Courtyard, just to name a few. Like the airline programs, some also have an associated credit card.
Each program will have different earning and redemption values and partnership networks. Again, choose one(s) where you are likely to stay the most often to see the biggest benefit.
Credit Card Rewards Programs
In addition to the credit cards associated with airline or hotel loyalty programs, there are travel credit cards associated with various banks/credit card companies.
They work similarly to loyalty program credit cards, but provide versatility across multiple travel brands.
Travel credit cards offer flexible earning and redemption options, such as:
- Transferable points to multiple airline and hotel partners
- Statement credits for travel purchases
- Annual travel credits and perks like Global Entry reimbursement
- Airport lounge access through Priority Pass or proprietary lounges
- Travel insurance and purchase protection
It’s definitely worth looking into these credit card rewards programs to see if there is one that is a good fit for you. Especially if you tend to travel with different airline, hotel, etc. brands.
Car Rental Programs
Car rental rewards programs are definitely something to look into if you rent cars during your travels.
They don’t add up to as much as the airline or hotel programs. But even if you don’t do it very often, they are worth having for the benefits you can get for the times that you do.
Most major car rental companies have a rewards program.
These programs typically offer:
- Free rental days after accumulating points
- Complimentary upgrades when available
- Expedited check-in and preferred member lanes
- Bonus points during promotional periods
Car rental programs are one case where joining several could be smart. You may find yourself in locations where there’s only one good option to rent from. So even if you aren’t accumulating a lot of points, the other benefits are well worth it.
Rewards Programs Strategy Considerations
So, how do you choose the rewards programs to join?
Focus on programs aligned with your travel patterns rather than spreading loyalty too thin. Consider the earning rates, redemption values, and whether the program's partners match your preferred destinations.
Many travelers find success with a "hub and spoke" approach. Choose one primary airline program supplemented by a flexible credit card program for maximum coverage.
The most valuable programs often provide outsized benefits at higher tiers, making concentrated spending more rewarding than diversified earnings across multiple programs.
It’s worth finding one of each of the airline, hotel, and car rental rewards programs to start with. And then you can assess from there what else will work best to give you the most benefit.
However you do it, travel rewards programs are definitely worth it.
