A travel rewards credit card can be an invaluable weapon in the arsenal of a frequent traveler. The right travel card can help aspiring nomads to save a significant amount of cash and make their journeys more comfortable. Yet with such a large range of travel cards and card providers, it can be overwhelming to figure out what is the right travel card for you. Travel cards can also vary wildly in terms of annual fees, ranging between no fee to upwards of $500. This guide aims to help travelers like yourself understand what they should be looking for when searching for their perfect travel rewards credit card.
Prior to this guide, note that credit cards are serious financial tools. In order to maximize your value and not fall afoul of credit card debt; you must use your travel card responsibly and with maturity. The whole point of getting a travel credit card is to put money back in your pocket, not the opposite. When using a travel credit card (or any credit card for that matter) keep in mind the following:
- Only spend what you can afford: Treat your credit card akin to a debit card. Do not spend more on a credit card than you can afford to fully pay when the bill is due.
- Always pay your card bills on time
Without further hesitation, let’s discuss what you should consider when searching for your ideal travel rewards credit card.
What to consider when choosing the right travel rewards credit card
With so many options, choosing the right travel rewards credit card is not an easy task. However, these following points can help you narrow down your choices and find the card that suits you and your travels best.
Decide Which Type of Travel Credit Card will Give You the Most Value
Travel credit cards come in several different types. Each type has different focuses in terms of its rewards and benefits:
- General travel credit cards – These cards encompass a range of advantages to assist the intrepid traveler. Such advantages can include rewards on travel purchases like flights, hotels, and dining out, and benefits like airport lounge access and travel insurance. The rewards and benefits on these cards are usually general rather than focused on a particular brand, such as an airline or hotel chain.
- Airline credit cards – Airline credit cards are often tied to a particular airline, for example, the JetBlue Plus Card. If you are someone who flies often and with a particular airline, an airline card could potentially be a good choice for you. Such a card could save you money and make flying a more enjoyable experience.
- Hotel credit cards – Similar to airline credit cards, hotel cards are generally associated with a particular hotel chain, for example, IHG or Marriott. If you are someone who stays at hotels numerous times in a year and has a preference for a particular hotel chain, a hotel card could bring you significant value.
Look at How Each Card Earns Rewards (Points/Miles)
Travel credit cards, whether general travel, airline, or hotel cards, earn points (sometimes known as miles). Points can be earned on expenses such as flights, hotels, dining, and other travel-related expenses. When shopping for a travel credit card, think about your main purchases when you travel. Choose a card that aligns with your most common travel purchases.
Understand Different Point Redemption Methods
Points can be worth different values in different contexts. Many cards have numerous types of points redemption methods with different points values when used. In order to get the most value out of your potential travel credit card, compare the ways in which you can redeem points.
Consider Annual Fees (and if you can negate them through rewards and benefits)
Annual fees are not uncommon amongst travel credit cards, with some card fees extending to over $400 per year. While travel credit cards with higher fees generally offer better rewards and benefits, this is not always the case. If a travel credit card with an annual fee catches your eye, make sure you will receive more value in terms of benefits and rewards than the fee.
Consider Sign-up Bonuses (as long as they don’t get you into credit card debt)
Many travel rewards credit cards offer bonus points if you spend a certain amount in the first few months of opening the card. These bonus points can be significant in value, sometimes equating to a free flight or a few nights at a hotel. While these bonus points can be a nice addition for the frequent traveler, avoid credit card debt at all costs. Only spend the sign-up bonus amount if you can pay your card bills in full and on time, as you could end up paying more in interest than the value of the bonus points.
Check and Compare the Benefits Suites of Competing Cards
Not so surprisingly, travel rewards credit cards come with travel-related benefits. Such benefits can include trip cancellation insurance, rental car insurance, and other useful perks for travelers. However, from travel card to travel card, benefit suites vary. Higher tier cards often have benefits aimed at frequent travelers such as 24/7 phone concierges, world-wide access to airport lounges, and hotel room upgrades. When contemplating a travel credit card look at its benefits and ask yourself what you would likely use. While cards with luxurious benefits may sound enticing, there is no point in spending a large amount on an annual fee if you are unlikely to get the maximum value out of its benefits suite. Always make sure to weigh a card’s benefits against its annual fee.
Decide if you Need a Card with No Foreign Transaction Fees
If you are planning on using your travel credit card in a country with a different currency, make sure it has no foreign transactions fees. Foreign transaction fees can cost you circa 3% on purchases made in a foreign currency. This is less important if you plan on using your travel card solely in your home country.
Be Aware of Restrictions and Blackout Dates
Make sure you are aware of any potential restrictions before settling on a travel credit card. Some travel credit card reward schemes may restrict you on the times you can use your points or miles; for example, peak travel days.
If you are traveling overseas, the EMV technology on a travel card could be something important to consider. There are two main types of EMV technology: Chip-and-PIN and Chip-and-Signature. While Chip-and-Signature is widespread in North America, some vendors in European countries only accept Chip-and-PIN. If you are planning to use your travel card domestically and abroad; it may be a good idea to get a travel card that supports both.
In conclusion, there is no such thing as a universally-perfect travel rewards credit card. The perfect travel card is the one that brings you the most value on your journeys. When considering a travel credit card, contemplate these pointers and do your research on competing cards.
Best of luck on your travels and may the road ever rise to meet you.