Travel Rewards Loyalty vs. Travel Deal Hunting

October 22, 2011

Travel rewards can help you earn free flights or a free night’s stay but what if you’re missing out on travel deals when you buy your plane ticket through your regular airline? 

Does it make sense to have an undying loyalty to a specific airline, hotel, or travel rewards program? Or is it more beneficial to hunt for the best deal or package on a per trip basis? There are arguments for both sides below. Which one makes the most sense for you?

Travel Rewards Loyalty

For those that are on the road a lot for business or pleasure, travel loyalty programs can really pay off. You can earn free nights and flights just by joining a preferred customer program, staying in the same hotel brands, and flying on the same airlines. For example, the Starwood Preferred and Marriott rewards programs are setup to really reward their most frequent visitors.  If you fly a lot for business both Delta and Southwest offer some of the best frequent flyer programs.

But free nights and flights are just the tip of the iceberg in terms of benefits for using these programs. If your favorite hotel brand or airline teams up with a credit card company to offer a rewards card that gives you points specifically for their brand, you can really rack up a lot of extras.

Many travel rewards credit cards offer a hefty bonus with your first purchase and then a second bonus if you spend a certain amount on the card within a few months of opening the credit card. You will be able to ramp up the number of points you have through your normal, everyday spending on top of the travel points you earn. As your points balance goes up many programs will give you elite or preferred status with their brands. This can give you VIP access, early check-ins, and other perks as you travel.

Travel Deal Hunting

If you rarely travel, then rewards programs are not nearly as beneficial. It can take many years of staying one or two nights at a hotel chain and using your hotel card to earn enough points for a free stay or upgrade. Airline programs are even harder to crack with many free flights starting at 25,000 miles. You might need to charge 8 round-trip flights to your airline card earn a free ticket.

Plus, sometimes programs change or are discontinued and those built up reward points can be wiped out. Instead of trying to remember what your login is for a random travel program, your time is better served just looking for the best travel deal when you need one.

The benefit of not sticking with a certain hotel or airline is that you can just choose the one that’s offering the lowest price when you happen to travel.  A quick search on a site like Kayak, sorted by the lowest price, will show who has the lowest fares.

One good way to save money when hunting for a travel deal is to bundle as many aspects of your trip together as possible. You may not get the absolute best deal than if you spent hours combing for the best deal, but there is easy money to be saved by simply packaging your flight, hotel, and car rental together.

If your travel dates are flexible or you are willing to risk part of your trip, you can use last minute deals to save significant amounts of cash. Hotels in particular do not want to be left holding open rooms when they could get some revenue for an empty room. This strategy does not work as well with flights simply because most last minute flights have very high fares.

Travel Some, Spend a Lot?

The gray area in between the two ends of the spectrum is the person who travels some during the year, but also spends a lot on credit cards. Depending on how much you travel and exactly where you are spending money, a customer rewards program tied with a travel rewards credit card for that program could generate enough points to be worthwhile.

Otherwise you can be better served by utilizing a cash back credit card. That cash can be used for anything you need it to — that might mean for your upcoming travel or simply to put toward another money goal if you don’t have travel plans coming up.

Final Thoughts

Regardless of which direction you decide to take your travel planning, make sure you read the fine print on the preferred customer programs and reward cards. Beware of annual fees that can dig into any meaningful reward you receive. There’s no sense in getting one free night if you pay the equivalent cost in annual fees every year.

What have you found to be the best fit for you, sticking with travel rewards programs or just searching for the best deals when you travel?

Kevin

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Kevin
Kevin Mulligan is a debt reduction champion with a passion for teaching people how to budget and stay out of debt. He's building a personal finance freelance writing career and has written for RothIRA.com, Discover Bank, ING Direct, and many others.

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