How Do Travel Rewards Work on a Credit Card?

Hands using laptop and credit card surrounded by travel supplies

So, you want to take a dream vacation. Is it worth it to rack up charges on your travel rewards credit card? This can be an excellent way for you to save money, but only if you can maintain a reasonable level of spending and pay off your debt in full each month. If you stay on top of your spending and debt level, travel rewards cards can be a way to maximize the value of your everyday purchases.

Before you choose a rewards credit card it is important to think about your lifestyle and purchase habits to find a card that matches. You should also look at the card details to understand how interest will be calculated, what the interest-free period is, and what restrictions or benefits there are, as you collect points. You might want to consider partner brands, added perks, and how long it takes to reach reward thresholds.

What Are Travel Rewards?

With a travel rewards card, you earn points that you can redeem for travel, travel-related purchases, or cash back. Those purchases may include flights, hotels, and attractions in destination cities. Many cards have relationships with certain airlines or hotel chains, which may mean your redemption is limited to those brands, or you get more value out of your points when you book with them.

Most travel rewards credit cards charge an annual fee. The upside is that these cards often come with additional benefits like greater redemption value and exclusive offers. Some cards give you perks like free checked bags or a discounted fare for your travel companion. Some even offer lounge access at airports around the world.

Pro-tip: Some credit cards offer no foreign transaction fees which is a bonus for frequent international travellers. The Scotiabank Passport™ Visa Infinite credit card is a great example and includes an extensive set of travel and rental car insurance benefits too.

How Are Rewards Calculated?

The rewards calculation is often complicated. It’s typical for a rewards scheme to give you one point per dollar spent on eligible purchases using your credit card. You may get bonus points when you first sign up, or additional points for purchases at preferred locations, affiliates, or categories like grocery stores or gas stations.

However, one point does not necessarily turn back into a dollar of reward value. For example, 50,000 points may get you $500 to use towards flights or other travel services.

Pro-tip:’s annual Best of Finance Awards converts points to cash value to help rank the best travel rewards cards.

How Do I Redeem Rewards?

Most credit card companies have an online rewards centre. Or, you can usually make reservations by phone with the help of an assistant or concierge service. Some programs even allow you to “top up” your rewards points by paying cash, so you can get to your destination faster. Often, the company will offer travel packages through preferred partners as well.

Pro-tip: Some travel reward programs allow you to redeem points for merchandise and experiences too. In addition to travel, points earned on the TD® First Class Travel® Visa Infinite credit card can be redeemed towards merchandise, gift cards, or credit back on your TD account.

Are There Any Drawbacks?

Some travel rewards programs limit the dates that you can travel with airline or hotel blackout dates. This may mean you can’t redeem rewards points for your preferred bookings. The card’s partnerships may also limit your airline or hotel options. So, you may not be able to book travel with your favourite chains unless they are part of the program.

Pro-tip: Always book early when using points for the best selection of flights and options.

Also, using your rewards points might mean passing over any last-minute or online deals you may get by paying cash. For example, if the airline is offering a special $99 fare, your rewards program may still charge you the equivalent of $500 in points for that same flight.

Search Online for a Travel Rewards Credit Card

If you’re looking for a new way to benefit from everyday purchases, check out options for travel rewards credit cards at You can search by reward type, annual fee, and other variables to find the right match, so you can get ready to take off on your next trip.

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