As a frequent traveler who’s visited 36+ countries in under a year, I can’t count the ways my travel credit cards have saved me money or upgraded my experience.
I’ve booked thousands of dollars’ worth of “free” flights and hotel stays using points and miles earned from simply putting my regular purchases on a travel rewards card, enjoyed my share of fancy airport lounges for free thanks to Priority Pass, and had all my expenses paid for duing a long flight delay thanks to my card’s travel insurance. And that’s just the tip of the iceberg.
Of course, all these perks came at a cost. I probably spent over a thousand dollars in annual fees across all my cards, but as an avid traveler who knows how to maximize benefits, the cost was generally worth it. Although most people probably don’t need as many cards as I had, a good travel credit card is one of the best investments you can make if you travel semi-frequently.
Should you get a travel rewards card?
If you travel a few times a year, then yes. Travel credit cards are great tools for making your trips less stressful and in some cases, less expensive. Which travel card you should get depends on which one provides you with the most valuable rewards and benefits.
What are the benefits of travel rewards credit cards?
Travel rewards cards are designed for a few purposes. They can help you earn points or miles to be redeemed for travel expenses, insure trips from unexpected mishaps or upgrade your accommodations. Some even let you earn a companion pass. Annual fees for travel cards can range from $0 to hundreds of dollars, so it’s important to understand what you’ll get before signing up.
Common travel card benefits include:
Boosted travel rewards: Many travel credit cards offer elevated rewards rates for travel purchases, such as flights and hotels.
Travel booking portals: Several major credit card issuers have their own travel portals for booking flights, hotels, rental cars and more. Using your points rather than cash to book travel can limit your travel expenses.
Trip insurance: Many travel credit cards offer some combination of baggage insurance, trip delay, trip cancellation, trip interruption or car rental collision insurance. You’ll have to check the card’s guide to benefits for the specific details.
TSA PreCheck or Global Entry: Some credit cards will offer a credit for TSA PreCheck or Global Entry. TSA PreCheck helps you get through security lines at the airport faster, while Global Entry expedites immigration.
Lounge access: A perk common among premium travel cards, some credit cards offer access to airport lounges. There, you can wait for your flight in comfort with refreshments and private work areas.
Annual travel credits: Many travel cards offer some sort of annual travel credit, whether for hotels, flights or general travel purchases. These credits can range from $50 to hundreds of dollars, but they only come with travel cards that charge an annual fee.
Weigh the value of the rewards and benefits against a credit card’s annual fee to choose the best one for you.
How to choose a travel rewards card
There are a number of different card features you’ll need to consider when deciding which travel card is right for you, including the fees, rewards, redemption methods and additional card perks.
Foreign transaction fees: If you plan to travel out of the US, choose a card that doesn’t have foreign transaction fees. This fee, typically 2% to 5% of your transaction, is charged when you make a purchase in a currency other than the US dollar. Most travel credit cards don’t have foreign transaction fees.
Annual fees: You’ll want to make sure that the card’s rewards and benefits provide enough value through your normal spending to cover its annual fee. That means your spending generates enough rewards to cover the fee and you use the card benefits. A travel card without an annual fee is better for travelers who don’t travel too often throughout the year, but it won’t provide as lucrative card perks.
Rewards: A travel credit card’s rewards are one of the most important things to consider. They should match how you usually spend while traveling and have a competitive value when it’s time to redeem. Choose a credit card that matches your travel budget and spending habits to avoid overspending.
Rewards redemption: Generally, you’ll have a better chance to maximize your rewards if you have more options, like using your points for airfare or hotels instead of only redeeming for statement credits. If you’re looking to get the most from your points, consider a credit card that offers point transfers to the credit card issuer’s partners.
Travel perks: And lastly, consider the card’s additional perks. Does it offer annual statement credits? How about amenities like airport lounge access or an application fee credit for Global Entry or TSA PreCheck? Many premium travel cards will offer ways to offset their annual fees through their benefits, but you’ll need to make sure they’re useful to you.
How experts suggest choosing the right travel credit card
There are dozens of travel credit cards, so finding the right fit can be daunting.
“The most important factor you need to look at when choosing a travel credit card is whether you value a specific brand,” said credit expert Gerri Detweiler.
If you always fly with one airline or stay at a particular hotel, you may want the benefits that come with a co-branded card that earns rewards specifically for that brand, Detweiler said. Perks could include jumping up to a higher airline membership tier for airline cards or annual free night stay certificates with hotel cards. But if you’re not loyal to one brand, Detweiler instead suggests a general travel credit card for avid travelers.
You also want to consider the type of rewards the card earns, said credit card expert Julia Menez.
“For those looking to travel with points and miles, the best way to pick the right travel credit card is to work backward,” Menez said. Choose your destination, then check which type of points will most effectively cover the cost.
“Once you know which type and how many points you’ll need to earn, select a travel credit card that earns those types of points,” she said.
Since many of the best travel cards charge an annual fee, figure out if you can justify it with the rewards and card perks you’ll earn. “If you’re going to pay a high annual fee, then you really need to look at whether you’ll earn enough in benefits to offset most or hopefully all of that fee,” Detweiler said.
If you won’t earn enough to make up for an annual fee, consider a lower-annual-fee credit card or even a cash-back card that might better suit your spending and budget, Detweiler added.
Lastly, consider how you can redeem a card’s points, the value of its rewards and whether you plan to transfer points to travel partners.
“Flexible points currencies like Chase, American Express, Capital One, Citi and Bilt are some of the most valuable because they can be used with many different airlines and hotel chains,” Menez said.
Once you’ve chosen the right travel card for you, the next step is to make sure you can get value from it. According to credit expert Daniel Braun, the best way to do that is to redeem your rewards strategically.
“Many times I’ll see people earn flexible points currencies from banks and then just cash them out at lower values,” he said. “But if they can be patient and learn a few ways to redeem for flights and hotels by transferring those points to transfer partners, then the value of their points could double, triple or multiply by even more.”
What are travel points and miles worth?
The value of points and miles will vary depending on the card and how you redeem them. Travel credit cards usually have two main forms of redemption: Using rewards for past travel expenses and transferring them to hotel and airline partners.
Point transfers could provide a higher per-point value than standard forms of redemption, but again, it depends on what card you’re using and which brands you’re transferring them to. Generally, travel cards encourage you to redeem for travel, which could mean booking airfare, hotels or rental cars.
When redeeming for airfare or hotels, factors including the time of year you’re booking your travel will also impact the value of your points or miles. But generally speaking, points and miles will always be worth the most when used for travel as opposed to statement credits or other forms of redemption.
How to maximize your travel card
To maximize your cards’ value, use it strategically for purchases that provide the most rewards and then redeem those rewards in the most lucrative way — that usually means for airfare or hotel stays, but you could find the best per-point value by utilizing point transfers. Choosing your travel date ahead of time could also give you the opportunity to shop around for the most lucrative transfer deals.
Remember to take advantage of any annual statement credits that may apply to you to offset your card’s annual fee. Using airport amenities like airport lounges, priority boarding or having checked bag fees waived are other ways to ensure you’re getting the most from your card.
How to apply
Follow these steps to apply for a travel rewards card:
- Find the card that best fits your travel habits and budget.
- Go to the credit card issuer’s secure website to find the application.
- Fill out all the required financial and personal information.
- Use your card responsibly and pay on time.
Be sure to redeem your travel rewards in the way that provides the greatest value and to use its perks whenever possible.
FAQs
Do travel credit card rewards expire?
While most don’t, you’ll need to read the terms that come with your credit card to be certain.
Are travel rewards taxable?
How many miles do you need to earn a free flight?
It varies from airline to airline. For travel rewards or frequent flyer miles, you can check on the respective airline’s website when booking a flight by choosing the option that lets you pay for a flight with credit card rewards.
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