How to choose a travel credit card

Few offers are as enticing as the prospect of a holiday paid for by credit card travel rewards. Now that travel is picking up again, you may feel the push to get a reliable travel credit card.

Even if you’re new to using travel cards, you probably know that their biggest attraction is that you can earn points or miles and use them for travel purchases.

What you may not know is that in addition to earning points and miles, Travel Rewards credit cards also offer a number of valuable benefits. These benefits can include travel insurance, fee waivers, and even access to airport lounges. Cards issued in conjunction with airline or hotel loyalty programs may also offer credit towards elite status, allowing you to earn even more travel benefits.

To help you speed up your search, here’s what you need to know about choosing a travel credit card.

Choose between a co-branded card and a regular travel card

If you are choosing a travel reward card, you are looking at two main types. Although there are many categories and subcategories, all travel cards are either regular travel reward cards or cards issued in conjunction with a travel company such as an airline, hotel chain, online travel agency, or cruise line. Co-branded and regular travel cards function differently, but can often work together. Many frequent travelers have more than one travel card, so they can optimize how they earn rewards.

Co-branded travel credit cards

Some of the first credit cards to encourage travel were airline cards, known as frequent flyer cards. Airline credit cards are co-branded with an airline and offer both travel rewards and benefits when flying with that carrier. With an airline card, you typically earn 2 “miles” (reward points) for every dollar spent with the airline and other reward tiers, and 1 mile for every dollar spent elsewhere. Airline cards also offer perks such as priority boarding, discounts on in-flight food and beverages, and free checked baggage.

Hotel credit cards work in much the same way – they are issued in conjunction with a hotel chain and are designed to encourage purchases in this chain. Some hotel cards offer enticing perks and bonuses that allow you to earn points towards free nights and receive benefits such as room upgrades, late check-outs and even free breakfast. But hotel cards differ from airline cards in that they don’t have a standard reward structure – 10,000 points can mean one thing on one chain and another on another, so they’re harder to compare.

Co-branded cards sometimes offer generous signup bonuses. For example, the Marriott Bonvoy Boundless® credit card gives you the opportunity to earn 5 free nights (each night worth up to 50,000 points) by spending $5,000 in the first three months. A typical airline credit card offers new applicants a welcome bonus that can be used on two or more domestic round-trip flights in economy class.

When you can redeem your miles for expensive business class or first class awards, you can get a lot more value than the usual 1 cent per mile you get by booking your trip directly through your card issuer. The same is true when you redeem hotel points for expensive bookings during peak travel periods.

General travel credit cards

Travel credit cards that are not co-branded with a travel provider may also be considered regular travel credit cards. These cards offer points or miles in a program created by the card issuer. Credit card users who receive these rewards use them directly with the card issuer to book rides. For example, a Bank of America® Travel Rewards credit card offers 1 cent points (reduced to 0.6 cents for cash rewards) each as a credit statement for travel purchases.

Other card issuers offer incentives if you redeem rewards for bookings booked through their travel programs. For example, Citi offers several credit cards that earn rewards through the ThankYou Points Program. You can redeem them for flight bookings or convert them as frequent flyer miles to use with partner airlines.

The American Express Membership Rewards Program and the Chase Ultimate Rewards Program operate in the same way, each offering its own list of travel partners. With your Capital One Venture Rewards credit card, you earn miles that can be used for credit on your travel statement or transferred to partner airlines and hotels.

What to Look for When Choosing a Travel Rewards Credit Card

When you choose a ride reward card—regular or shared—there are a few things you should evaluate.

New account bonuses

Credit card issuers try to attract new customers by offering signup bonuses. You can look forward to a valuable bonus, but keep in mind that most cards require you to earn it by spending a certain amount over a certain period of time.

Permanent travel rewards

While you can get a great one-time signup bonus, make sure the card you choose brings travel rewards for your spending. The best card for you should earn points or miles for specific purchases you make, such as transportation, meals, gas, or groceries.

Foreign transaction fees

Many credit cards charge a 3% foreign transaction fee on all payments made outside the United States. Luckily, most travel cards no longer charge this fee. But if you are traveling abroad, double-check the conditions of the card.

Travel redemption cost

Rewards points and miles offered by different credit cards vary greatly in value. For example, one hotel program might charge 50,000 points for a free night at a mid-range hotel, while another might only charge 12,000 points per night at a similar hotel in the same area. The best way to appreciate the value of the rewards a card can bring is to look at a travel booking that you can redeem your points or miles for.

Annual Fees

While there are a few free travel credit cards, most of them have an annual fee, and fees for premium travel cards can be very high. The more you travel and the more you use your card, the more likely the rewards and benefits you earn will be worth the commission. If you plan to pay an annual fee, carefully consider the cost of benefits such as checked baggage fee waivers and travel credit statements.

bottom line

There is a whole world of travel credit cards designed for almost any kind of use. Do your research before applying for a new travel credit card. Making the right choice will help you get the rewards and benefits that matter most to you.

Editorial disclaimer

The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.

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