Credit cards with travel benefits provide rewarding rates on eligible purchases and generous one-time or ongoing bonuses, plus often allow cardholders to redeem rewards through their portal for travel or transfer them into partner loyalty programs.
Before purchasing a travel card, carefully consider your spending habits and redemption goals. Be certain that the annual fee justifies its membership costs.
General-purpose cards
General-Purpose Reloadable Cards (GPRs) offer consumers looking to control their spending a convenient solution. Similar to debit cards, GPRs can be loaded from multiple sources and used for cash withdrawals or bill pay online – some even come equipped with security features that enable customers to block transactions from specific retailers.
Prepaid cards come in both open-loop and closed-loop varieties; an open-loop card can be used at any merchant that accepts credit card payments; closed-loop options include store-branded and gas cards. They may even be used to claim government benefits like unemployment insurance and social welfare checks.
Reward cards provide cardholders with points or cash back on every purchase made, which they can then redeem for merchandise, statement credits, gift cards or travel.
Co-branded cards
Co-branded cards have become increasingly popular, with companies like Southwest Airlines and WalMart offering credit card rewards programs with exclusive benefits to cardholders and helping build loyalty. But co-branded cards do come with risks, including financial risk if sales or revenue targets are missed, market saturation diminishing value of rewards programs and oversaturation that reduces their effectiveness.
Co-branded cards are the result of collaboration between merchants and financial institutions or card networks, typically featuring rewards tailored specifically to the affiliated merchant. Similar to store cards or loyalty cards, co-branded cards come with the support of major card issuers or networks behind them.
Extra travel perks
Credit cards with travel perks offer rewards that can be redeemed for airfare, hotel stays or other travel-related purchases such as fees credits for Global Entry/TSA PreCheck as well as travel insurance policies. Many cards also provide generous sign-up bonuses that help make up for annual fees charged on these accounts.
Co-branded cards often offer benefits tailored to specific airline or hotel brands and limit redemption flexibility, such as offering free checked bags or priority boarding for you and one companion, airport lounge access, primary rental car coverage coverage, airport lounge membership fees or primary rental car coverage perks – however these cards typically charge higher annual fees than general travel cards; some such as The Platinum Card from American Express charge as much as $695 annually!
Sign-up bonuses
Travel credit cards often offer high rewards points or miles per dollar spent, which you can redeem for airfare, hotel stays and car rentals. They may even give extra points on purchases like dining out, groceries, drugstore items and streaming services – plus some even waive annual fees in their first year! Some cards charge an annual fee; others don’t impose one until after one year has been completed.
Some card issuers lure new customers with large sign-up bonuses, offering thousands of bonus miles just for signing up and spending a certain amount in the first few months. Before applying, ensure that this requirement fits within your budget and travel plans – otherwise the rewards may not be worth your while.
Fees
Credit cards that offer travel benefits often impose certain fees, such as foreign transaction and annual fees, but these generally don’t outweigh the advantages. To find the ideal card for you, consider your travel habits and preferences; for instance if you tend to fly Delta often then perhaps one with co-branded airline benefits may make sense for you.
Credit card issuers lure new applicants with generous sign-up bonuses worth thousands of miles, but before you agree to an annual fee make sure the travel benefits such as annual travel credits and lounge access justify it. Also compare redemption options and points/mile values.
