Start Here for Collecting Points and Miles for Free Travel

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You’ve probably heard someone say they flew to Europe “on points.” Or maybe you’ve seen posts claiming you can save thousands of dollars a year on travel.

It sounds amazing, but what does it actually mean? And how do you do it yourself?

AwardWallet is here to help. This guide breaks down what points and miles are, how they work, and how to start using them to travel for less. And when you’re ready to keep track of everything you earn along the way, we can help with that, too.

Our goal is to make this a helpful, easy-to-understand resource. While we offer in-depth articles that explore nearly every aspect of points and miles, this guide focuses on the basics. We’ll keep things simple and give you the essentials you need to get started.

Below, we’ll outline exactly what this article covers so you know what to expect.

What Makes Points and Miles So Powerful

What makes points and miles so powerful is that they change the math of travel. Instead of paying full price for flights and hotels, you use rewards earned from everyday spending to drastically reduce — or sometimes eliminate — those costs. Over time, that changes how you think about travel. Instead of every trip hinging on the cash price, you have options.

For some, that means finally taking a dream trip, visiting the place their family once called home, seeing loved ones more often, or even having a cushion when unexpected travel comes up.

Make Sure You're Ready

Before diving in, you'll want to make sure your foundation is solid.

Know your credit score

When considering applying for your first rewards card, you should have a clear understanding of your credit score. Most travel rewards cards require good to excellent credit. Generally, that means a score in the mid-600s or higher, while premium cards often require a score in the 700s.

If your credit score needs improvement, you'll want to focus on that first. Building strong credit habits takes time, but it sets the foundation for long-term success with rewards cards.

And if you’re unsure where you stand or want help improving your score, explore our guides on understanding, improving, and managing your credit score.

a student looks at a computer to learn about credit cards with a grandfather

Establish healthy budgeting habits

Healthy budgeting habits matter just as much as a strong credit score. Before opening a new card, you should understand how much money comes in and goes out each month. The goal is to shift existing, everyday spending onto a rewards card — not to spend more just to earn points.

Who Shouldn’t Get Into Points and Miles?

There are some instances where getting into the points and miles world may not be a great option — at least not for now.

You may want to hold off at the moment if:

You’re carrying high-interest credit card debt
You regularly pay interest on your balances
You struggle with overspending
You don’t yet have a clear monthly budget

Rewards only make sense when you’re paying your balance in full each month. Interest rates on rewards cards are often high enough to wipe out the value of any points you earn and then some.

Once you’re consistently paying balances in full and have a handle on your spending, you’ll be in a much better position to make rewards work for you — instead of against you.

The Basics — What are points and miles?

“Points” and “miles” function as a kind of travel currency that can be redeemed for flights, hotel stays, and other travel expenses. These rewards are earned through:

Credit card sign-up bonuses and spending
Airline flights
Hotel stays
Shopping portals and promotions

Airline programs typically use “miles.” Credit card and hotel programs often use “points.” Functionally, they serve a similar purpose: they can be redeemed for travel. There are two helpful ways to think about rewards:

Who issues them (an airline, a hotel, or a bank)
How they work (fixed value or flexible)

Let’s start with who issues them.

Airline and hotel points

These are tied to a specific loyalty program. For example, Delta SkyMiles can be used to book flights through Delta, and World of Hyatt points can be used for Hyatt hotel stays. You generally redeem them within that airline or hotel’s ecosystem, with limited transfer options.

The value of these rewards depends on that program’s award pricing system.

Transferable bank points

These generally come from major credit card issuers and can be transferred to multiple airline and hotel partners. And because you can transfer these points to different travel partners, they give you more booking options.

The major transferable programs are:

There are also smaller or niche transferable programs, such as Brex Rewards and Rove Miles.

In addition, Marriott Bonvoy points can be transferred to dozens of airline partners. While Marriott is a hotel loyalty program rather than a bank-issued currency, its broad airline partnerships make it one of the more flexible hotel rewards programs.

Now, let’s talk about how rewards behave.

Fixed-value rewards

Some credit card rewards function like cash. These are often redeemed at a set rate — commonly around 1 cent per point — toward travel purchases or statement credits. In this case, the number of points required is directly tied to the cash price.

Fixed-value rewards are simple and predictable, but they usually don’t offer the same upside potential as transferable rewards.

A photo of a woman checking her phone with a lap top open

How To Start Earning Points and Miles

Once you’ve committed to earning points and miles, the next question is how to earn enough to actually use them. You can build rewards slowly through flights, hotel stays, and everyday spending. But most beginners accumulate a meaningful balance much faster through credit card welcome bonuses.

Choosing your first rewards card

Before jumping into the step-by-step process, it helps to understand what makes a strong beginner card.

For most people, the best first option earns flexible rewards that can be transferred to multiple airline and hotel partners. That flexibility gives you more redemption options and makes it easier to learn how points and miles work without being locked into one program.

You’ll also want to consider:

The size of the welcome bonus
The minimum spending requirement
The annual fee
Ongoing earning rates in categories where you already spend

Our favorite beginner cards

Now that you know how the process works, let's go over a couple of our favorite beginner cards.

Chase Sapphire Preferred^® Card (Rates & Fees): This card wins our award for the best beginner card. It currently offers a solid welcome bonus of 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening, an annual fee of $95, and the points are flexible and very easy to use.

Chase Sapphire Preferred^® Card

Apply Now

Rates & Fees

Welcome Bonus Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.

Chase Sapphire Preferred^® Card

Welcome Bonus Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.

Annual Fee:$95

Show more Why We Like It Highlights Earning Rates

Our #1 recommended beginners rewards card featuring a 75,000-point signup bonus after you spend $5,000 on purchases in the first 3 months from account opening. This card comes with great benefits and earns valuable Ultimate Rewards points.

Earn 75,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening.
Enjoy benefits such as 5x on travel purchased through Chase Travel℠, 3x on dining, select streaming services and online groceries, 2x on all other travel purchases, 1x on all other purchases
Earn up to $50 in statement credits each account anniversary year for hotel stays through Chase Travel℠
10% anniversary points boost - each account anniversary you'll earn bonus points equal to 10% of your total purchases made the previous year.
Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
Complimentary DashPass which unlocks $0 delivery fees & lower service fees for a min. of one year when you activate by 12/31/27. Plus, a $10 promo each month on non-restaurant orders.
Member FDIC

5X points on Lyft rides through September 2027
5X points on travel purchased through Chase Travel℠
3X points on dining at restaurants worldwide
3X points on eligible streaming services
3X points on online grocery purchases (excluding Target, Walmart, and wholesale clubs)
2X points on all other travel
1X point per dollar spent on all other purchases

Capital One Venture Rewards Credit Card: This card is another great beginner option. This card currently offers 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months of account opening and has an annual fee of $95. The rewards are flexible, giving you the option to offset travel purchases or transfer to 22 airline and hotel partners.

Capital One Venture Rewards Credit Card

How to Apply

Welcome Offer Earn 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months of account opening, plus receive a $250 Capital One Travel credit in your first cardholder year.

Capital One Venture Rewards Credit Card

Welcome Offer Earn 75,000 bonus miles once you spend $4,000 on purchases within the first 3 months of account opening, plus receive a $250 Capital One Travel credit in your first cardholder year.

Annual Fee:$95

Show more Why We Like It Highlights Earning Rates

Following the revamp of Capital One's rewards program and the addition of airline transfer partners, the Capital One Venture has catapulted into our list of top travel rewards cards. The ability to earn at least 2X miles on every purchase provides a decent return on spending. Plus the card offers some great perks.

Earn 75,000 Miles once you spend $4,000 on purchases within the first 3 months of account opening, plus receive a $250 Capital One Travel credit in your first cardholder year
5X miles on hotels, vacation rentals and rental cars booked through Capital One Travel
2X miles on all other purchase
Fee credit for Global Entry or TSA Pre✔^® (up to $120)
No foreign transaction fees
$95 annual fee

5X miles per dollar on purchases through Capital One Entertainment
5X miles per dollar on hotels, vacation rentals and rental cars booked through Capital One Travel
2X miles per dollar on all other purchases

We highly recommend one of these two cards as your first travel rewards card. From there, your strategy can expand based on your goals and spending habits.

Co-branded cards

Additionally, if you're loyal to a particular airline or hotel chain, then you will most likely want their co-branded rewards credit card. These are cards from a credit card issuer — like Chase or Citi — that earn points or miles in a specific program, such as Delta Air Lines SkyMiles. Here's our roundup of cards for each program:

The Basic Framework

Once you understand the mechanics, the process becomes repeatable. Here’s the framework:

Step one: Open a new credit card with a strong sign-up bonus, also called a welcome offer. A typical offer might look like: “Earn 60,000 bonus points after you spend $4,000 on purchases in the first three months from account opening.”
Step two: Shift your regular spending to the card. Use it for expenses you were already planning like groceries, gas, utilities, childcare, streaming services, and other everyday costs.
Step three: Meet the minimum spending requirements responsibly. The goal isn’t to spend more. It’s to route existing expenses through the new card and earn the bonus.
Step four: Use the points to book travel! Once the bonus posts, you can begin booking flights, hotels, or other travel using your rewards.
Step five: After you’ve redeemed and understand how the process works, you can consider applying for another card — spacing applications appropriately and staying within issuer rules.

Is opening multiple cards risky?

It’s a common concern.

When managed responsibly, opening new credit cards does not automatically harm your credit. In fact, additional cards can increase your total available credit, which may improve your utilization ratio over time.

When managed responsibly, many people maintain strong credit scores while earning significant rewards.

a woman in a hijab holds a cell phone and credit card

How To Use Your Points

Broadly speaking, you can redeem rewards in one of three ways, each with its own tradeoff:

Redeem at a fixed value
Book travel through a bank portal
Transfer points to airline or hotel partners

Cashing out points

The simplest option is to redeem points as a statement credit toward travel purchases. In this case, points typically function like cash and are often worth around 1 cent each, though sometimes less.

Honestly, this is our least favorite way to use points since the value is typically lower than what you can otherwise get. However, it can be a good option for covering certain travel expenses that aren't as easily covered with points. This could mean redeeming to offset something like car rentals, cruises, or theme park tickets.

Booking travel in the bank portal

Most major credit card issuers operate their own travel portals. When you book through these platforms, your points usually function like cash, and the number of points required is tied closely to the ticket’s price.

For example, when you use the Sapphire Preferred to book travel through Chase Travel℠, your points are worth a standard rate of 1 cent each, but could be worth more, depending on your specific redemption.

Here's our guide on how to use the portals for each major card issuer:

Transferring to travel partners

Finally, you can transfer your points to various travel partners.

Converting points to airline and hotel partners requires a bit more knowledge — and sometimes more effort — than cashing them out. But it’s our favorite way to redeem rewards because it often unlocks the most value.

When you book travel through a bank portal, your points function like cash. The number of points required is directly tied to the cash price of the flight or hotel. As prices rise, the number of points required increases as well.

Transferring points to an airline or hotel partner means you are no longer booking at a cash-based price. Instead, you are booking using that program’s award pricing, which is often not directly tied to the cash cost of the stay. This difference is what creates opportunities for significantly higher value. When you redeem your points through transfer partners, you can potentially get double, triple, or even quadruple the cash-out value.

This is why we often recommend starting with flexible rewards cards like the Sapphire Preferred or Capital One Venture — they allow you to transfer points to multiple airline and hotel programs.

For example, a standard award night at the Grand Hyatt Kauai can cost 40,000 World of Hyatt points per night, while the same room may cost $900 or more when booked with cash.

Chase Ultimate Rewards points transfer to World of Hyatt at a 1:1 ratio, meaning 40,000 Ultimate Rewards points could cover that stay. If you redeemed those same points through Chase Travel at 1 cent per point, you’d need roughly 90,000 points to offset the $900 cash price.

Using AwardWallet

As you begin earning rewards, staying organized becomes just as important as earning them. That's where AwardWallet comes in. We help you track over 650 different loyalty programs through our free platform. Check out how to use AwardWallet to track your rewards.

Plus, we track more than just hotel and airline programs. We also track free night awards, upgrades, and other perks. You can even get a reminder when it's time to renew your passport!

Furthermore, you can sign up for a daily email with recent AwardWallet Blog articles by customizing your notifications. That way, you won't miss out on the latest news, card offers, and more.

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Other Things To Know

We know that we've given you a ton of information here today. So instead of adding anything further, we'll leave you with some articles that might be helpful if you'd like to keep reading and learning:

Final Thoughts

The world of points and miles is vast, but it does not have to feel overwhelming. Learning the basics is an important first step, and you have already done that here. From there, it is simply a matter of jumping in. Get your finances in order, open your first card, begin earning points, and decide how you want to use them.

As a reminder, we all choose different ways to use our points. The goal is for them to help you accomplish your travel goals. We at AwardWallet are dedicated to helping you achieve those goals.

And yes, we're sure you have questions. Our Facebook group Award Travel 101 is a great place to ask them.