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Choosing the correct credit card for you is no easy task. Many offer different benefits and rewards depending on how you spend your money. Travel credit cards give an opportunity for avid travelers to earn perks for spending on what they love!
What Is A Travel Credit Card?
A travel credit card is a type of credit card that offers rewards in the form of points, miles or cash back for purchases made on the card.
A general travel card will often offer points or miles for every dollar spent on purchases made from airlines, hotels, car rental agencies and more. They are a good option for frequent travelers who want to earn rewards without having to think about which specific airline or hotel they are spending their money on.
An airline credit card will often offer a higher rate of return when spending money with one particular airline as opposed to other airlines. This is an excellent option for someone who flies with one airline exclusively and wants to earn rewards faster than they would with a general travel credit card.
A hotel credit card will often offer points or miles when spending money at hotels and other lodging establishments as opposed to other types of businesses such as restaurants, gas stations, etc. This is great option if you stay at hotels frequently and want to earn rewards
Card | Rewards | Annual Fee |
| 2X – 5X
5x total points on travel purchased through Chase Travel, 3x points on dining, online grocery purchases and select streaming services. 2x on other travel purchases. Plus, earn 1 point per dollar spent on all other purchases.
| $95
|
|---|---|---|---|
| Delta SkyMiles Gold American Express Card | 1X – 2X
2X miles on delta purchases, at restaurants worldwide (including take-out and delivery in the U.S) and at U.S. supermarkets, and 1x miles on all other eligible purchases
| $150, $0 intro first year (Rates & Fees)
|
| 1X – 10X
10 miles per dollar on hotels and rental cars when booking via Capital One Travel, 5 miles per dollar on flights and 2 miles per dollar on all eligible purchases
| $395 | |
| 1X – 4X
4 Bonus Points per $1 spent on purchases at all Hyatt hotels. Plus, 5 Base Points from Hyatt per eligible $1 spent for being a World of Hyatt member. 2x Bonus Points per $1 spent at restaurants, on airline tickets purchased directly from the airline, local transit and commuting as well as fitness club and gym memberships. Plus, earn 1 Bonus Point per $1 spent on all other purchases.
| $95 | |
| 1X – 2X
2 AAdvantage miles per dollar on grocery stores and eligible American Airlines purchases, and 1 mile per dollar on other purchases
| $0 | |
| 1X – 10X
5X total points on air travel and 10X total points on hotels, car rentals and dining when you purchase through Chase Ultimate Rewards®, immediately after earning your $300 annual travel credit. Also, earn 3x points on dining at restaurants and travel (after meeting the $300 travel credit), then 1x points per dollar spent on all other purchases. | $550 | |
| 1X – 5X
5X points on up to $500,000 spent on directly-booked airfare and flights and prepaid hotels booked through American Express Travel (per calendar year), 2X points on prepaid car rentals through American Express Travel and 1X points on all other purchases
| $695 (Rates & Fees) |
Factors To Consider When Comparing Travel Cards
Choosing a travel credit card is not an easy task. There are many factors to consider, and it is important to know what you want in order to make the best decision.
1. Which Travel Card You Can Get?
Before extensively researching what card is right for you, you need to understand what card you would likely be accepted for. The first piece of information that you should know is your credit score.
This is a holistic score that rates your credit worthiness on a scale. This is the primary tool used by companies to assess your credit history. Having a complete understand of your current income and earnings potential will also give you a clear picture of your financial position.
Compare these facts about yourself to what the companies are looking for in applicants for each card.
2. Rewards Rate on Travel Purchases
The primary reason for getting a travel credit card is raking in the rewards, so finding a card with the highest reward rate is one of the most important factors. A good rate is typically rewarding 2% to 3% cash back on spending.
More expensive cards with higher requirements for credit score typically offer higher rates than this, but if your financial situation is not the best, these travel cards may not be worth it.
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and special member-only perks.
3. Annual Fee
Nearly all travel credit cards charge annual fees to be a cardholder. The annual rates can range all the way from nothing for the most basic cards, such as Chase Freedom Unlimited, to $695 per year for the most luxurious card, the Platinum Card from American Express.
Depending on what reward tier you are looking for will dictate what an acceptable annual fee is. If you choose a card with a high annual fee and do not use it to its fullest extent, you could be getting a better deal with a lower-tier card.
4. Special Travel Perks
Some cards contain unique perks to that card that could drastically improve your travel experience. Depending on what experiences you value the most will dictate what to look for.
Some cards offer primary boarding, TSA precheck, and access to airport lounges and others offer insurance on lost luggage, canceled flights, and rental car insurance.
Understand which perks would potentially be the most valuable for you and choose the card that fits your needs.
5. Blackouts and Restrictions
Flexibility when using your card is extremely important part of choosing the best card, so avoiding cards with strict blackouts and restrictions is essential.
Many cards do not allow points or rewards to be used when demand for travel is high, typically around holidays and peak travel periods. Some cards also have international restrictions on what countries the card is able to be used at.
Being able to use your card and points when you want and where you want is a key factor in selecting the perfect card.
6. Welcome Bonus
You can be rewarded for simply signing up for a travel credit card, so you should evaluate which card will reward you the most for becoming a cardholder.
Rewards vary based on the card, but the common structure is being given a certain number of miles or points after spending a certain amount of dollars in the card within the first few months of opening the card.
The threshold for spending varies greatly, with some cards such as the World Of Hyatt card giving 30,000 Bonus Points after you spend $3,000 on purchases in your first 3 months from account opening.*Opens offer details overlay Plus, up to 30,000 More Bonus Points by earning 2 Bonus Points total per $1 spent in the first 6 months from account opening on purchases that normally earn 1 Bonus Point, on up to $15,000 spent..
Other cards such as the Delta SkyMiles® Reserve American Express Card have higher thresholds, offering Earn 60,000 bonus miles after you spend $5,000 in purchases on your new card in your first six months.
Questions To Ask Before Choosing A Travel Card
To select the perfect card for your, it is paramount to understand your own spending habits and what your ideal use for the card is. Ask yourself these questions prior to choosing your card.
- How Much Of My Income Do I spend On Travel?
To get the most out of your travel credit card, you need to spend a fairly high amount on travel each year. Since you only receive the full perks of the card if you spend on it, spending is essential.
You should analyze your spending habits before applying and understand what percent of your income typically goes to travel.
If travel spending tends to be above 10% of your annual income, you will likely receive maximum benefits without drastically changing your spending habits. If this number is less than 5%, a travel credit card may not benefit you fully.
- What Benefits Do I Want To Get Out Of This Card?
Prior to evaluating what card is best for you, you should have a good understanding of what specifically you want to get out of this card.
If you simply want to get the most money back possible from your spending, the reward rate should be your priority.
The Chase Freedom Unlimited is one of the best cards for this type of customer with 5% cash back on travel purchases through Chase.
If you would like to receive the most travel perks and improvement of travel experience from your card, analyzing these benefits of each card is most important.
The Amex Platinum card is likely best for customers with a perks focus, as the card offers credits on airline fees, Uber payments, Global Entry, and TSA PreCheck applications as well as access to airport lounges (enrollment required).
- Am I A Loyal Customer Of One Airline Or Hotel Chain?
This might be the most important question you ask yourself prior to selecting a card. If you are a loyal customer of a specific airline or hotel chain, you should narrow your options down to the offerings of that specific company.
For example, if you only fly United, there is no use in analyzing the benefits and perks of a United Card versus an American Airlines card or even a general travel card. Your card should align with your spending habits, so go with what you already spend money on.
- How Often Do I Travel Internationally?
If you plan on traveling internationally often, your travel credit card should be accepted in as many countries as possible.
Typically, cards sponsored by Visa and Mastercard are accepted in nearly every country, so these are good options for avid international travelers.
Cards sponsored by American Express and Discover have less usage internationally, so if you plan on going abroad often, these cards may not be the best choice for you.
How To Get A Travel Card?
Here are the main steps to take when getting a travel credit card:
1. Check Your Credit Score
Before you even start looking for what card is right for you, it is important to know what card you are eligible for. For example, The required score for the Chase Sapphire Preferred is +690, while the score needed for the Amex Platinum card is even higher.
Understanding your credit score in relation to what credit score the credit card issuers are looking for is the first course of action.
2. Choose Your Card
Once you know what cards you are likely to be accepted for, pick the best card for you. Do this by asking yourself all of the questions laid out above and based on your answers, select the card that is best for you.
Understand all of the factors of the card that I talked about earlier before applying.
3. Apply For The Card
After you’ve chosen the card you want, it's time to apply for it! Apply for the card through the company website and give them all of the necessary information.
You will need a few documents to be approved, most importantly proof of identification, proof of address, proof of income, and all relevant financial documents.
Try to locate all of the necessary documents prior to starting the application to streamline the process.
4. Get Your Card
The wait time following submitting your application can take anywhere from a few days to a few months, but once you’ve received your decision, you can either accept the offer given, reject it, or inquire about rejection.
- If your application is accepted, the issuer will give you an APR and credit limit based on your credit score and financial health. If the proposed rate and credit limit are acceptable to you, accept the offer and begin spending!
- If the APR is too high or the credit limit is too low for your liking, you can reject the offer.
- If you application was rejected, inquire about why so that you can reapply later and increase your chance of being accepted.
How To Maximize Travel Rewards?
Ensuring that you get the most of your travel card will make every penny you spend on it worth it! So lets talk about how to do this.
- Spend The Bonus Reward Requirement
- The bonus reward is a one time offering by the card company for spending a certain amount within the first few months of receiving the card. The reward is often a hefty amount of points that could be exchanged for great value later on.
- Even if you have to spend a little extra to hit this threshold, making sure you earn this bonus reward is a key part of getting the most out of your card.
- Maximize Spending In Highest Earning Categories
- Cards often offer different reward rates based on the category, so you should focus your spending on categories with the highest reward rate.
- If you’ve chosen the right card that aligns with your spending habits, the category with the highest reward rate should be somewhere you already spend a lot of your money on. This is why choosing the right card is so important!
- Redeem Points Efficiently
- Travel cards offer miles or points as rewards, so redeeming these rewards in the most efficient way possible ensures you are not wasting points.
- When redeeming points for flights, compare the CPM (Cent Per Mile) of the trip to the average value of a mile from that airline. If the CPM of the trip is higher, it’s a good use of points!
- Utilize All Perks
- Travel cards often offer perks that are not monetary, in the form of access to airport lounges or rebates on travel insurance. Understand what all of these perks can do and use them accordingly to fully use your benefits.
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FAQs
Travel insurance is one of the most common perks offered by travel cards. Nearly all of the cards offer a rebate for trip cancelations and lost luggage.
The Chase Sapphire Reserve and Preferred card give the most all-encompassing insurance plan with coverage for cancellations, interruptions, delays, rental cars, and accidents.
Rental car insurance is another perk offered by many card providers. Along with the Chase Sapphire Reserve and Preferred cards, the Marriott Bonvoy Brilliant, Southwest Rapid Rewards Plus, United Explorer, Delta SkyMiles Gold, Amex Platinum, and Capital One Venture cards all offer some sort of rental car insurance.
Many of the travel cards that offer extravagant rewards and perks come with hefty fees, but there are a few cards that do not charge annual fees.
The two cards with no annual fee worth mentioning are the Well Fargo Autograph Card and the Bank of America Travel Rewards card.
Once you’ve got your travel card and begun accumulating points, you’re going to want to exchange these points for rewards.
Many of card providers have a portal where you can directly exchange points for free flights or other benefits and book through the portal. For example the Chase Ultimate rewards or the American Express membership.
If the provider doesn’t have a portal, you can likely convert the points right from their website.
Receiving a free hotel stay works very similarly to receiving a free flight.
You accumulate points by using your hotel company-issued card or general travel card and exchange them on the company website or portal for a hotel voucher of equal value, which could equate to an entire nights stay.
Credit card travel rewards portals allow customers to book flights and other services directly through the company. The most famous credit card portals are:
Credit card portals also provide an opportunity for customers to earn extra rewards, as extra cashback is often given for cash purchases made through the portal.
You can receive a free flight by using your travel card to accumulate miles and points, and then exchange these rewards for an airline ticket. For example, you can transfer Citi ThankYou points to 16 different partners, including a pair of hotels and 14 airline loyalty programs.
The number of miles needed to receive a free flight depends on the value of the flight, but in general, you need at least 10,000 points, but for more expensive flights this number is much higher.
