What Are Credit Card Bonus Miles? How to Earn and Redeem Travel Rewards

You can keep the raindrops on roses and whiskers on kittens — bonus miles are one of my favorite things. I often earn bonus miles each time I swipe my card for select purchases, which can turn everyday spending into free flights, hotel stays, or other travel goodies.

Credit card bonus miles are rewards you earn through signup offers or bonus spending categories that you can redeem for travel rewards such as free flights or hotel stays.

Credit card bonus miles are additional rewards you can earn through purchases in categories that earn additional rewards, such as traveling or dining, or by meeting a card’s signup bonus requirement. 

I’ve learned a lot about bonus miles over the years, including how to earn and redeem them and the best bonus programs credit card issuers dangle in front of us. Here, I’ll share that wisdom, and maybe bonus miles will become one of your favorite things, too.

Bonus miles let frequent travelers earn extra value. While you can earn rewards for everyday spending, bonus miles can be a fast way to rack up those travel perks. Dream vacations are great, but paying for them with reward miles is even better.

Earning Bonus Miles

Many travel credit cards offer signup bonuses in which you earn a jackpot of bonus miles by ponying up a set amount on purchases during the first three months after you open the account. 

You’ll earn a bigger stash of bonus miles if you use a co-branded card at partner airlines and hotels. Here are some of the differences between bonus miles and regular spending points/miles.

It’s worth knowing how to maximize your bonus miles to get the most juice from your rewards card. For that, however, you’ll need to understand how to tailor your spending and the best ways to redeem those hard-earned miles.

Redeeming Bonus Miles

You can redeem bonus miles for all sorts of things, including everyday purchases and gift cards. But you squeeze the most value by redeeming your miles for travel expenses like flights, hotel stays, and car rentals. By the way, don’t be surprised if your credit card doesn’t allow you to turn your bonus miles into cash. These are usually co-branded airline and hotel cards.

The value of miles depends on a mind-numbing number of variables: reward programs, travel schedules, destinations, and availability. I won’t lie to you — it takes some effort to get the very best card for your needs. One thing I can tell you is that you can usually get more out of your miles if you redeem during the off-peak season. 

I’m sorry to say that you’ll have to wade through the terms and conditions of your credit card loyalty program. They often have ways to increase your miles’ value or transfer them to more flexible programs, but that’s of no use to you unless you know about it. Be smart about redeeming your miles so you can stretch your benefits.

There are lots of different miles programs out there, with a variety of benefits and rewards. Some are linked to a specific hotel chain or airline and are designed to reward loyal customers. Others are unaffiliated and more flexible, but their rewards may not be as attractive.

Understanding the different types of miles programs will help you choose the right credit card to match your unique lifestyle. The following are the details concerning card types: specific airline credit cards, general travel rewards cards, and other co-branded cards. Each type has its charms (and its faults as well). My sage advice: choose wisely!

Airline-Specific Credit Cards

Popular airline-specific cards — such as those from Delta, United, and American Airlines — offer stupendous signup bonuses and miles for purchases made with the airline. Because these miles are part of the airline’s frequent flyer program, they fall under the program’s rules. 

Unfortunately, that means the programs can change the value of your miles at a moment’s notice. I wish I had a nickel for each time my airline increased the miles needed for a free ticket or seat upgrade. I’d be able to afford a lot of extra flights that way.

These cards are great if you frequently fly on the same airline, and they offer goodies like priority boarding, lounge access (often with free adult drinks), and free checked bags. Just don’t expect to redeem your miles for perks from other airlines; they’ll just laugh at you.

You can redeem your miles with partner airlines, but let’s get real — you won’t be able to use them to fly with a rival. If you like shopping around for flight deals or just want to fly somewhere your favorite airline doesn’t go, these cards may not be your best choice.

General Travel Rewards Cards

General travel rewards cards — such as those from Chase, Capital One, Bank of America, Discover, and American Express — are much more flexible. You earn bonus miles or points by using your card for any purchases, such as gas, groceries, or travel. You can redeem your miles at a wide variety of airlines and hotels or transfer them to another loyalty program for more value. 

This flexibility is valuable if you want the broadest travel options and rewards that encompass high-value perks such as trip insurance, purchase protection, and no foreign transaction fees.

Generally, you can also use your bonus miles for statement credits, gift cards, or bookings made on the issuer’s online portal. You can even get cash for them, but be careful — redeeming miles for cash is usually not the way to extract the most value.

Other Co-Branded Credit Cards

Other companies, such as hotel chains and car rentals, offer co-branded cards. For instance, if you love staying at Marriot, Hyatt, or Hilton hotels, you can earn perks like free hotel stays and room upgrades. My favorite: free breakfasts. I love making waffles.

Do you prefer to go on cruises? Maybe you’re a theme park fan? Co-branded cards are available for all sorts of wild travel destinations and experiences. You can get perks like discounted food and liquor, souvenirs, upgraded accommodations, and savings on things like spa days and guided tours. 

Co-branded cards combine the power of a loyalty program with the ease of a credit card. In fact, if the co-branded hotel or destination has a loyalty program, signing up for its card can fast-track you to a higher reward status, giving you even more perks. For example, my Hilton Honors card catapulted me into the Silver tier. That translates into faster points, complimentary bottles of water, and the occasional free night’s stay.

While bonus miles can get you a dream vacation if you know how to use them, you’ll need to plan it out in advance. Keeping track of earning rates, fees, and expiration policies can help you squeeze the most value out of your miles card. 

Choose the Right Credit Card 

While choosing a credit card for bonus miles, take into consideration your travel habits and exactly what you want to achieve. 

Do you prefer a specific airline or hotel chain? Pick up their co-branded card. Want to be more flexible? Look for a general travel card instead. If you have a specific destination you want to visit (we’re looking at you, Disney), then check to see if it offers a co-branded card. 

Evaluate the earning rates in the categories on which you spend most of your money — dining, groceries, travel, etc. If you’re already a frequent flyer, milking more points for travel can help save you money. If you don’t travel much and are relying on those bonus miles to pay for your dream vacation, look for a card that offers the most bonus points for purchases you make regularly, like groceries or gas.

Don’t forget to factor in annual fees. While they can be offset by valuable travel perks, that won’t happen if you never take a trip. Compare annual fees with the cost of benefits like lounge access, baggage check, and travel insurance, and see if the card is worth the price. 

Also, make sure that the spending threshold for the signup bonus is something you can reasonably afford. If you can’t shell out the required $5,000 in the first three months, the signup bonus miles will forever elude your grasp. You should also understand the card’s flexibility in terms of the airlines or hotels where you can redeem or transfer miles.

One thing I always look for is whether the card charges foreign transaction fees. I travel internationally from time to time, and I don’t want to pay the extra 3% on a Swiss cuckoo clock or Belgian chocolates. 

Finally, look for extra perks such as travel credits, elite status, airport lounge entry, and access to unique events. Sizing up these perks will help you pick the card that fits you like a glove.

Spend Strategically and Identify Earning Opportunities

To maximize your bonus miles, use your card for everyday purchases that yield more rewards, such as dining or groceries. You could also set up your card to make automatic payments for your recurring bills for things like rent, utilities, and streaming services, then pay them off each month. This can be a terrific source of extra miles. 

Take advantage of online shopping portals associated with your credit card, where you can earn extra miles by purchasing through partner retailers and travel agencies. You can also charge large, planned expenses to help reach the signup bonus spending requirements as quickly as possible. 

For instance, a bar mitzvah can easily run $20,000. That will easily handle the signup bonus on a new card, and if you get a card with a 0% APR promotion, you can take your time paying the bill. Maazel tov!

Always try to pay your balance in full each month to avoid interest charges that will make your miles more expensive. 

Seasonal or category-based reward opportunities can also increase your miles. Many cards with higher earning rates have quarterly rotating categories that you must activate. Take note of promotions or special deals your card issuer offers, such as double or triple miles on particular categories or merchants. 

Sign up for airline or hotel loyalty programs that run bonus mile or point promotions for bookings or stays during off-peak seasons. If you keep an eye out, you can optimize your spending to maximize your bonus miles.

Make the Most of Your Signup Bonus Period

Signup bonuses are one of the fastest ways to earn bonus miles since you can get a huge rewards bonanza right off the bat. These promotions require spending a certain amount in the first few months after opening an account, so you’ll need to plan out your spending. 

Successfully earning a signup bonus can bring a lot more value to your credit card, often with free flights or hotel stays. Initial bonuses may also pave the way to elite status and allow you to access other perks and benefits with eligible airlines or hotel chains.

To meet the signup bonus spending requirements, employ a few key strategies. First of all, use the new credit card for all your regular purchases: groceries, dining, and utilities. Time larger purchases — like home improvements or vacations — around the signup bonus period. 

If your budget allows, try to prepay recurring expenses like insurance premiums so that they count toward the signup bonus.

Make sure you can actually pay off all of these purchases. There’s no point in going into debt in exchange for a few free nights in a hotel. If you’re planning on a big group trip, consider coordinating with your friends and family by covering their expenses with your card. That can help you meet the threshold without putting strain on your budget. 

Pitfalls can reduce your bonus miles, so you want to avoid them. Know the real worth of your miles and keep an eye out for common misconceptions that could cause you to make a wrong decision.

Don’t Overestimate the Value of Miles

You might think that miles have a fixed value: one mile earned equals one mile on a flight, right? 

Oh, if only it were that simple. Miles aren’t nearly that valuable, often being worth a few cents at most. They also don’t have a fixed value: you can get a lot more mileage from your miles if you use them at the right time and in the right way. 

The miles needed for things like cabin upgrades and airline tickets aren’t static; they’re determined by the issuer, which can change its reward program at any time without notice. That means miles can be effectively worth different amounts depending on what you use them for. Since travel prices are determined by current conditions, even the time of year you use them can affect their value.

Finally, don’t expect to hoard points forever. Bonus miles may devalue and expire over time, so you’ll need to use them or lose them. 

You can estimate the value of your miles by dividing the cash price of the redemption by its value in miles. If your miles are worth between 1 and 2 cents each, you’re usually getting a good deal. Any less than that, and you’ll want to look elsewhere. 

Other aspects to consider when calculating value include availability, fees, and how flexible the bookings are. Keep a close eye on changes in redemption rates for the airline or hotel loyalty programs and any devaluation that may occur. 

How Fees and Interest Rates Impact Value

Fees and interest rates can very quickly eat into the real value of any rewards program. Annual fees, foreign transaction fees, and late payment fees can cut into the value of those miles even faster. 

For example, if you aren’t regularly using the perks a card offers, that high annual fee is just eating into your budget. Similarly, carrying a balance on your card and incurring interest charges reduces the value of your miles. 

They aren’t actually worth less, but you’ll be spending more dollars per mile, and those dollars could have gone toward your vacation. It’s important to understand all the associated costs and calculate an accurate net benefit for your credit card.

To figure out the balance between your rewards and what you spend to earn them, you’ll need to do a little math. First, calculate the total yearly cost of a card against what you estimate your rewards and benefits will be. If you travel frequently enough to maximize a card’s perks, then that would justify a higher annual fee. 

However, if you usually carry an unpaid balance, you should lean toward cards with lower interest rates and minimal fees. It’s a smart practice to pay off the full amount each month and avoid interest. 

Understand Expiration Dates

Read the fine print: Some programs will expire any unredeemed miles after 12 to 36 months. Check your account regularly and stay up to date with your program’s expiration rules. 

You can keep miles alive using small purchases or booking travel or point transfers. The expiration date may also be refreshed by other activities and promotional offers. Stay on top of these things so your miles don’t go to waste. 

Bonus miles are fantastic additions to any credit card, especially for frequent travelers. To unlock their full potential, be aware of the actual value of your miles, how to evaluate costs, and how to track their expiration dates. 

Stay informed and spend wisely to maximize your bonus miles. Then, enjoy them — you earned them!