Since moving to Windsor, N.S., from Toronto in 2021, Stefan Palios has been able to return for multiple visits with his grandparents, and travel reward points have made a big difference.

The 29-year-old said the welcome bonuses alone on travel reward cards have paid for three round trips from Halifax to Toronto this past year. He got two free flights using points and a third flight for his partner with a special offer.

Palios uses both the TD Aeroplan Visa Infinite Card and the TD Aeroplan Visa Business Card – the latter for his freelance writing and coaching business.

His strategy for racking up points is to use his rewards cards for all personal and business spending.

“I don’t use my debit card,” he said. “And, I pay off my cards every month in full to avoid interest.”

If used wisely, reward cards can help offset the cost of travel. That’s especially convenient now as airlines are ramping up their flight schedules and may be even more useful if airfare costs start climbing due to rising fuel prices.

It’s an especially opportune time to sign up for a travel rewards card because there are good offers at the moment, said Barry Choi, a personal finance and travel expert in Toronto.

Choi cites the American Express Gold Rewards Card as one such example. The card has an annual fee of $250 with an annual travel credit of $100 and a welcome bonus of up to 70,000 points.

“To give context, 70,000 points is worth a minimum value of $700. And, if you transfer those points to Aeroplan (the loyalty program for Air Canada and its partners) at a one-to-one ratio, you can almost get double the value quite easily.”

That’s because of its redemption value, Choi said. When redeeming flights on Aeroplan, you can search for flights that provide a value of two cents per point.

For example, a return flight within Canada could have a cash value of $500 but only cost 25,000 Aeroplan points, Choi explained. If you were to redeem $500 at the base rate with American Express Membership Rewards, it would cost you 50,000 points or a value of one cent per point.

“It’s worth looking into your loyalty program to see how you can maximize your value,” Choi said. “While you can always use your points for the base redemption value, you may get an even higher value if the program has airline or hotel loyalty partners.”

For example, RBC rewards points can be converted to WestJet dollars and American Express rewards points can be transferred to Marriott Bonvoy, a hotel loyalty program, in addition to Aeroplan, Choi said.

While travel rewards can help save costs, users need to be cautious that they don’t overspend, especially since it’s been proven that when you spent with credit, you typically spend more, Choi said.

“The value of signing up for a travel card is its welcome bonus. However, to get that bonus, you need to spend a minimum amount within a set period of time. So that might be $3,000 in the first three months,” he explained.

“If you’re spending more than you normally would just to get that bonus, it’s not really worth it. But if you’re going to spend that money anyway, you might as well get something out of it.”

Given credit card interest rates are relatively high compared with a mortgage or line of credit, it’s also important to ensure you’re able to pay off the balance each month or the rewards won’t be worth it, he warned.

Lastly, to get the most out of travel rewards, always read the fine print. The value of points will differ depending on what you use then for.

“Generally speaking, if you collect travel rewards points, the best value will be for travel rewards,” Choi said.

He recommends cardholders avoid using their points for statement credit, merchandise or gift cards because the value is usually lower. Another rewards card might offer better options if the collected points aren’t being used specifically for travel.

Reading the fine print also helped Palios learn of an unexpected perk: he is eligible for car rental discounts, something he didn’t realize when he first signed up for the card.

A lot of these rewards credit cards come with additional benefits, Choi said, such as free checked bags, travel insurance, priority lines, and some even have no foreign exchange fees.

“So having this credit card, even with an annual fee, can save you money in the long run.”