Travel-reward credit cards provide many attractive benefits that draw travellers’ interest, but Clark Howard suggests they’re ultimately aspirational and many would do better with a standard cash back card instead.
Travel credit cards provide everyday spending with points or miles that can be redeemed for free flights, hotels and vacation packages – with many also including additional perks like airport lounge access.
General travel cards
Travel credit cards provide many advantages and rewards, including points or miles you can redeem for flights, hotel stays, rental cars and more through an issuer’s travel portal. Furthermore, some cards allow users to transfer these points directly into airline and hotel loyalty programs; general travel cards tend to offer greater flexibility than co-branded cards which restrict you to booking with specific airlines or hotels.
Travel credit cards provide additional advantages such as no foreign transaction fees, trip cancellation insurance and lounge access. Premium travel cards do come with higher annual fees but the benefits could make up for it for frequent travelers. When choosing a card that best fits your needs, consider factors like earnings rates, welcome offers and perks as well as earnings rates before applying. Signing up with Experian for free credit monitoring helps with finding an account to meet this need – then use NerdWallet to compare top travel cards until finding one that fits with your spending habits!
Flat-rate travel cards
Flat-rate travel cards provide one rewards rate across all purchases, which makes them simpler to understand than cards with bonus categories. Even so, flat-rate cards may still offer valuable perks like lounge access and purchase protections.
Clark Howard doesn’t recommend these types of cards, but they can be beneficial tools for travelers seeking to earn airline miles and hotel points while traveling. Before signing up for such cards, however, it’s essential that one carefully consider the potential advantages and disadvantages.
Airlines travel credit cards allow you to accumulate airline miles on all purchases made, with some even offering benefits such as Global Entry or TSA PreCheck membership. In addition, some cards provide sign-up bonuses and 0% APR purchases in the first few months after membership has started; however, many also charge an annual fee.
Premium travel cards
Premium travel cards typically offer numerous perks that often outweigh their annual fees, including airport lounge access, travel credits and hotel elite status perks. To qualify for one, however, excellent credit and high household income are typically required.
American Express Platinum Card users can expect a generous welcome bonus of 60,000 points when spending $4,000 within three months of account opening, in addition to travel credits, airline and hotel perks such as Delta Sky Club membership and Priority Pass lounge access. This card grants instant Marriott and Hilton Gold elite status (enrollment required), giving cardholders free room upgrades and breakfast. Cardholders can also redeem rewards through Amex points for travel-related items, though this redemption option usually provides less benefits. Some cards waive foreign transaction fees which could save travelers hundreds in currency exchange costs.
Brand-specific hotel cards
Brand-specific hotel credit cards provide a loyalty program within a particular hotel chain. Points you earn can be redeemed for free nights at that hotel chain as well as travel services provided through its rewards portal, while you may even have the ability to transfer them outward to partners outside its network in order to boost their value further.
Benefits may differ, but often include one free night per year as well as other travel-related perks. Certain cards also provide automatic elite status with their hotel loyalty program as well as special privileges like priority booking or room upgrades.
Before applying for a hotel credit card, take time to carefully consider the benefits you want and the amount of spending required to reach the bonus threshold. Be sure to review everyday spending rates and membership tier rules, in addition to benefits not directly tied to its points system, such as secondary rental insurance or fraud protection.
