Credit cards with travel rewards offer many advantages, from generous sign-up bonuses and waiving the first year’s annual fee, to increased points values when redeeming for travel. Unfortunately, however, certain cards come with high fees that negate some of these advantages.
Airlines and hotels-branded travel cards earn “miles” or other rewards that you can only redeem through them; general travel cards offer flexible points you can redeem against any travel expense without restrictions imposed by brand cards.
General Travel Rewards
Travel credit cards that do not feature specific airline or hotel brands provide cardholders with greater flexibility to earn and redeem rewards through the card issuer’s points or miles program. They can even add value by transferring these rewards into partner loyalty programs.
Card issuers offer generous welcome offers with these cards to encourage new cardholders to quickly build up their points balances. Some include spending bonus categories like airfare, hotels and car rentals to boost point accumulation.
Co-branded cards provide travelers with travel and purchase protections that protect against unexpected events, like lost luggage or inadequate coverage. It’s important to consider both the monetary value of these rewards as well as fees and annual costs when determining if these cards meet your travel goals.
Airline- or Hotel-Specific Cards
If you travel frequently and can manage a credit card with an annual fee, rewards credit cards can provide great value. Consider their sign-up bonus, points per dollar spent, and any special perks which might enhance your trip experiences.
Airline- and hotel-specific credit cards often provide frequent travelers with extra perks that make their travel more enjoyable, such as complimentary checked bags and TSA Precheck(r), in-flight discounts, priority boarding, seat upgrades and priority boarding. Furthermore, such cards tend to provide greater rewards flexibility by letting you redeem flights directly with them as well as partner businesses like hotels or car rental agencies that they work with.
Hotel-specific cards often offer attractive perks, including free night certificates that more than cover their annual fee and automatic elite status in hotel loyalty programs. If you travel frequently and prefer specific hotel chains, these cards could be worth exploring as potential solutions.
Co-Branded Cards
Many brands provide co-branded credit cards as part of their loyalty programs, which offer rewards in return for use with affiliated merchants or, alternatively, “open loop” cards which can be used anywhere their card issuer accepts payments.
Co-branded cards often provide rewards in the form of cashback or points that can be redeemed for brand-specific benefits like free checked bags, status or airport lounge access – making these cards more appealing to brand loyalists while encouraging more customers to apply and use the cards. This may help expand brand databases.
These cards typically display only their partner’s branding on the front without an institution-issuer logo. But they still possess many of the same features of standard credit cards, such as zero liability for unauthorized purchases and purchase protections; furthermore, some may even provide access to savings accounts with the issuing financial institution.
Premium Cards
Premium credit cards often carry high annual fees, but can still prove valuable for travelers. They work by offering superior rewards systems and numerous advantages over standard cards.
American Express’ Platinum Card(r) offers travel credits and fees that help offset its annual fee, along with complimentary access to airport lounges. Other premium cards popular among travelers include Chase Sapphire Reserve(r) and Capital One Venture X Rewards Credit Card (see rates and fees for more info).
Before applying for one of these cards, however, it’s essential that you fully comprehend their operation. If you carry a balance or don’t pay your monthly bill in full each month, interest charges could quickly eat into any rewards that accrue to you – damaging your credit score in the process and forcing premium cards off their shelves without being preapproved first. As a result, most people should wait to be preapproved prior to applying.
