Travel credit cards provide attractive points and benefits like airport lounge access and trip protections. To maximize their value, consider how you intend to redeem them.
Be wary, though: rewards credit cards often charge higher interest rates, making them unsuitable for people carrying balances month after month.
Sign-up bonuses
Credit card companies frequently offer sign-up bonuses that could equal free hotel stays or plane tickets, but it’s essential to understand your spending habits to determine whether the minimum spend required to receive one of these bonuses is realistic and achievable, otherwise overspending can lead to debt accumulation.
Airline and hotel loyalty programs often offer co-branded credit cards with generous sign-up bonuses as an attractive welcome offer. In addition, these cards provide loyalty benefits such as annual credits towards incidental airline fees or hotel stays, membership in CLEAR airport security screening programs, or access to premium credit card lounges.
Travel enthusiasts looking for more flexible solutions have additional options besides airline-specific cards, including general travel cards that offer higher reward rates on certain categories. Such cards may provide greater freedom when redeeming rewards across a variety of travel-related purchases and services; plus they typically feature lower annual fees. Just be sure to pay the balance off in full every month to avoid incurring interest charges!
Airline and hotel-specific cards
Airline and hotel cards allow you to earn points that can be redeemed for flights, hotel stays and rental cars. In addition, these cards may also provide extra travel perks such as lounge access or reimbursement of application fee reimbursement for Global Entry/TSA PreCheck applications – though these cards often come with high annual fees that negate their alluring welcome offers.
Airline credit cards typically feature benefits associated with one airline and can include free checked bags, priority boarding and inflight discounts; most airline credit cards require you to register with their loyalty program in order to take advantage. Hotel cards provide points in that hotel chain’s loyalty program which can be redeemed for rooms, discounts or on-property experiences such as room upgrades, late checkouts or complimentary breakfast; travel cards that don’t feature specific loyalty programs, such as Capital One Venture Card can offer greater flexibility with point redemptions.
General-purpose cards
General travel cards offer points that can be redeemed like cash for airfare, hotels and car rentals without the blackout dates and restrictions that accompany co-branded cards. One popular example is Capital One Venture Rewards Credit Card which earns 5 miles for every dollar spent booking hotel and car rental reservations through their travel partner as well as 2 miles on all other purchases made with it.
Private-label prepaid cards are another form of card that can be used as an alternative to credit cards in many countries, though without accruing rewards. Customers can load funds directly at financial institutions or purchase reload packs.
Your ideal travel card depends on your spending habits, financial situation and amount of time you want to invest in tracking rewards. At least one credit card dedicated for international travel would help reduce foreign transaction fees significantly.
Annual fees
Some travel credit cards charge annual fees, which can be offset by generous rewards and perks. Airline- and hotel-specific cards like United Explorer Card or Hilton Honors American Express Card offer you points and miles that can only be redeemed with their brands – this makes these cards perfect for frequent travelers who don’t mind locking away rewards in specific airlines or hotel chains.
By contrast, general travel cards, like Capital One Mileage Plus World Elite Mastercard, often offer higher reward rates across a wider array of airfare and hotel stays (and car rentals and dining) while offering additional perks that help offset their high annual fees – these may include statement credits for travel bookings made directly through card issuers, lounge access benefits and refunding application fees for Global Entry or TSA PreCheck applications – in addition to not charging any foreign transaction fees which can add up quickly.
