The Hidden Value of Travel Reward Credit Cards

First, as a gentle reminder, this post will only have value if you pay your credit balance in full each month. If you have an overdue credit card balance then I suggest  you stop here and read my post about setting a budget.


Travel Reward Credit Card sign-up bonuses are becoming incredibly valuable as companies compete to win customers. These offers can be worth $200 to well over $1000 but do these cards make sense long term? Credit card companies are no fools and these cards are very cleverly structured to make the valuation process seem complex. We are clever too though and there is potential to find amazing deals. In this post I hope to look at two popular travel reward cards and show how they can save you money.


The Cards

Chase Sapphire Reserve: 50K point sign-up bonus ($750 value)

Ritz Carlton: Two-night stay at a Ritz Carlton sign-up bonus ($500-$1600 value depending on the hotel)


How they are the Same

  • Annual Fee: $450
  • Travel Credit: $300
  • Priority Pass Lounge Access


How they are different

  • Chase Sapphire Reserve has the most flexible redemption program with 11 different hotels and airlines. Also, the card has some of the most valuable points.
  • Ritz Carlton is part of Marriot which just merged with SPG. Together it is the largest hotel network. When you stay within the Marriot hotel network you get serious benefits including $100 hotel credit, 25% bonus points on hotel stays, 10% annual point bonus and room upgrades. That being said, you are limited to staying at Marriot properties. Another big benefit is unlimited $100 discount on round trip airline tickets in the US.



Everyone’s spending patterns are different which could change the results considerably. Here I have attempted to find typical spending habits based on general spending trends I found on the world wide web:

  • Average spending amount of $30K per year
  • Includes one roundtrip flight for two and two night hotel stay once a year
  • The hotel upgrades and some other fringe benefits may have a monetary value but are not included here
  • Sadly, hotels and airlines can change their valuations anytime so this may not be accurate in the future


The Valuation (Go Math Nerd Go!)

There are two sides of the equation, earning and redeeming points. You need to understand both to get a sense of the return that is being offered. Here I have broken down the details here:


Earn Point per Dollar spent            2.50            2.87
Annual Spending $   30,000  $   30,000
Annual Points       75,000       86,100
Point Bonus                 –          8,610
Total       75,000       94,710
Redeem Point per Dollar redeemed $     0.015  $     0.010
Annual Value $     1,125  $         947
Annual Fee $       (450) $       (450)
Travel Credit $         300  $         300
Airline Discount $            –  $         100
Hotel Discount $            –  $         100
Net $         975  $         997
Return 3.25% 3.32%


The return on these two cards is over 3%. Yes! We can see the redemption power of the CSR is impressive. However, when staying at a Marriot, the extra discounts the RC cards adds up to give it a slight edge. Both cards offer a return well above most cash back cards which is around 1.5%.



  • If you don’t like Marriot or not sure you like any hotel chain,  the CSR takes the win. The flexibility and redemption power is amazing.
  • If you do like Marriot or travel frequently (with another person) with-in the US, RC credit card is also a great deal.

The Risk Runner

You may also like