Travel rewards credit cards give cardholders access to points they can earn and redeem for flights, hotels and more. Since point values differ widely between cards, it’s essential that cardholders understand all terms before signing up.
Points or miles tend to offer the greatest return when redeemed for airfare, hotels, rental cars or statement credits; other redeem options could include gift cards.
Rewards Rates
Many credit cards allow cardholders to earn rewards when spending on travel-related spending such as flights, hotels and car rentals; others offer bonus points on dining and grocery purchases. Redeem these earned rewards for even greater value through loyalty programs with airlines or hotels chains or cash back or gift cards.
Airline cards offer frequent travelers an ideal way to quickly earn and redeem miles on their preferred airline, often including elite status benefits like complimentary checked bags and priority boarding, as well as credits toward Global Entry or TSA PreCheck application fees.
Hotel cards offer huge multipliers on bonus categories and free night certificates after meeting spending thresholds, yet some of these cards also incur annual fees that could negate some of their rewards.
Bonus Categories
Clark cautions cardholders not to get carried away with bonuses offered on travel cards as these can be difficult to keep track of and may not provide the greatest value for spending.
Cardholders may find better redemption values by transferring points directly into airline and hotel loyalty programs such as Capital One miles, American Express Membership Rewards and Citi ThankYou Points instead of redeeming them directly for travel. Some cards that provide transfer partners include Capital One miles, American Express Membership Rewards and Citi ThankYou Points.
Airline-specific credit cards often provide higher earnings rates in their frequent-flier program and other perks like lounge access. Unfortunately, however, such cards often incur high annual fees; for example, United Club Infinite Card earns 2 miles per dollar spent on airfare or travel purchases as well as offering a welcome offer of 80,000 bonus miles!
Redeeming Points
Travelers on the move often redeem rewards for flights, hotels and vacation packages using points or miles accumulated with their credit card. A card that makes booking travel using points or miles easier would be ideal.
Credit cards offering flexible travel points generally feature a travel portal where you can quickly search and see how many points or miles are necessary to book the trip of your choice. They often also include airline and hotel transfer partners so as to maximize opportunities for high-value redemptions.
Clark travels approximately 25-30 times each year and carries the Southwest Rapid Rewards Priority card because of its low annual fee and two miles earned for every dollar spent, such as gas or dining purchases. Redeem your points for travel through a portal at 1 cent each for redemption purposes.
Additional Perks
Travel cards offer additional benefits that make a difference for many travelers, such as lounge access, Global Entry and TSA PreCheck application fee credits, free checked bags, elite status upgrades and statement credits.
Airline and hotel cards often offer additional perks tied directly to their respective airline or hotel chain, such as free checked bags, early boarding privileges and discounts on inflight purchases.
As well, additional benefits like rental car insurance, trip interruption coverage and purchase protection may add up quickly. When selecting your credit card to meet travel rewards needs, take into consideration what matters to you most and the time that tracking multiple cards may consume – expert Clark Howard estimates that most consumers would benefit more from a traditional cash back credit card.
Fees
Travel credit cards often offer attractive return rates for certain categories of spending and valuable benefits such as free checked baggage, room upgrades and airline credits; it is important, however, that before applying for one you understand exactly what the annual fee covers.
Clark notes that travel credit cards with transferable rewards tend to have lower annual fees, making them an excellent option for people who value flexibility with redemptions but don’t travel enough to take advantage of elevated earning categories.
Some cards offer fixed-value points currencies that offer a predetermined value toward travel purchases when you redeem them, making the process simpler but limiting your redemption options.
