Travel credit cards provide multiple points or miles on purchases of airfares, hotels and car rentals as well as providing benefits like airline fee credits, free hotel nights and priority boarding.
Determining whether these rewards are worthwhile depends on your spending habits and redemption options; generally speaking, travel credit card points can be redeemed for one cent each when used towards travel expenses.
Cash back
Credit card issuers frequently offer signup bonuses in the form of cash back, points or miles for new cardmembers as an inducement to open an account with them. Although some rewards can cover part of an annual fee, their actual value depends on spending habits and redemption options available to each cardmember.
Travel credit cards often offer more valuable redemption options for points or miles earned, plus amenities like airport lounge access and flight fee credits – however if you don’t travel frequently enough, these perks might not justify their annual fee.
Cash back cards provide easy and generous rewards on all of your purchases, with some even offering you statement credits, gift cards or bank account deposits! In addition, some do not charge an annual fee making them an ideal solution for anyone wanting a convenient alternative to airline and hotel loyalty programs.
Airline or hotel rewards
Airline and hotel credit cards offer many attractive benefits, such as free flights, hotel stays and car rental purchases. Sign-up bonuses tend to be generous. Their annual fees tend to be higher compared to other cards – selecting one that best meets your spending habits and budget is essential.
Credit card points or miles have different values depending on how they’re redeemed, depending on how you intend to redeem them. Some people may prefer spending 25,000 miles for a $250 economy flight while others wait until they have amassed enough miles to book business-class travel. Redeeming points for merchandise or gift cards could also be detrimental.
Airline and hotel credit cards offer many benefits, yet may also have high annual fees. Some cards may feature co-branding agreements with specific airlines or hotels while others don’t. Before choosing one of these cards, WalletHub suggests carefully considering its features such as earning rate, rewards redemption value and annual fee before making your selection.
Transferable points
Credit cards with travel rewards offer points or miles that can be redeemed for flights, hotels, car rentals and other travel-related expenses. Unlike cash back credit cards which provide fixed redemption values per dollar earned, travel reward points may be transferred to partner programs for higher redemption rates on award flights.
Selecting the ideal card will depend on your preferences and spending habits, taking into account earning categories, estimated annual spending in each one, as well as how flexible its rewards may be.
Many card issuers offer loyalty programs that enable cardholders to redeem points for various travel experiences, like Chase’s Ultimate Rewards program which lets card holders exchange them for hotel stays and airline tickets as well as earn bonus points with specific purchases. It is important to remember, though, that card issuers often change their programs, potentially decreasing the value of rewards earned through them.
Annual fee
When it comes to choosing a credit card for travel, go beyond looking at its sign-up bonus to assess its long-term value. Take note of earning categories, airline and hotel partners and redemption flexibility before making your choice. Also look out for foreign transaction fees or any travel protection features offered by the card – ultimately you want a card which maximizes spending in key earning categories and offers the greatest redemption value back.
However, many travel cards impose an annual fee; typically around $139 but some premium cards may incur fees as high as $700 annually. You should make sure that your spending generates sufficient rewards and benefits each year to cover any annual fees; otherwise it might be better off with an option without an annual charge.
