How to choose a travel credit card

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The right travel credit card can help you earn points for free travel, but that’s not all. Many top credit cards for travel also come with complimentary travel insurance, and some even boast perks like airport lounge access and expedited airport security.

But, how do you choose a travel credit card? By knowing what to look for, you can find the card that best suits your spending style and travel needs.

Types of travel credit cards

Before you do anything else, think long and hard about the type of travel rewards you want to earn. Knowing your ideal rewards can be hard when you have never earned travel points before. You can start by considering how much flexibility you want when redeeming your points, your normal travel style and your allegiances. Types of travel credit cards to consider include:

Co-branded travel credit cards: This type of travel credit card is co-branded with a specific travel brand, such as a frequent flyer program or a hotel loyalty program. Examples of co-branded travel credit cards include the Hilton Honors American Express Card and the Delta SkyMiles® Gold American Express Card.

Many co-branded travel credit cards come with specific on-brand travel perks like free checked bags, priority boarding, annual hotel credits or automatic hotel elite status. Because co-branded travel credit cards let you earn points in a specific travel program, they’re best for travel loyalists who use the same brand frequently already.

General travel credit cards: This type of travel credit card is not aligned with a specific airline or hotel brand. Instead, you earn rewards in a program that lets you use your points in various ways.

Some general travel credit cards let you cover travel purchases charged to your card directly with rewards. Others let you redeem for statement credits, gift cards, cash back and more. Many premium travel credit cards even let you transfer points to airline and hotel partners. Examples of general travel credit cards include the Capital One Venture Rewards Credit Card and the Chase Sapphire Preferred® Card.

Note that some premium travel credit cards also come with elite travel perks like airport lounge access, annual travel credits, elite hotel status and fee credits for Global Entry or TSA PreCheck. However, premium cards in this niche tend to charge annual fees of $550 or more, so they’re not for everyone.

Expert tip: Most travel credit cards are geared to consumers with good or excellent credit, which typically entails having a FICO credit score of 670 or higher. Before you sign up for a travel credit card, you should understand your credit score and overall credit health.

4 steps to choosing a travel credit card

Now that you know about the types of travel credit cards out there, you have some work to do. The following steps can help you narrow down your choices and find the right card for your next trip:

1. Look for lucrative rewards and a big bonus

As you compare the top rewards credit cards on the market today, it’s easy to get distracted by their welcome offers. After all, many top travel credit cards offer bonuses worth $1,000 or more within the first few months.

However, make sure to look at bonus offers and ongoing earning rates. There’s nothing wrong with going after a big bonus, but you want to earn points that align well with your normal spending habits if you hope to reap the benefits of the card for the long haul.

If you happen to spend a lot on groceries, gas, dining or travel, for example, it makes sense to look for cards that offer bonus points in these categories. However, you can also look for a card that offers a flat rate of rewards for each dollar you spend.

Generally speaking, a card that offers just 1X points (or miles) on regular purchases should come with some bonus categories that offer more points where you spend the most. If you choose a flat-rate card, opt for one that lets you earn 2X points (or miles) or higher on everything you buy.

2. Know how to redeem

Knowing how you can redeem your points is crucial. This is especially true if you’re choosing a hotel credit card or an airline credit card. Points and miles are more than just a different currency for redeeming the same flight or hotel room you’d usually book. Most airlines and hotel chains only offer so-called “awards” on certain categories of fare or room, which can sometimes make it difficult to use your rewards.

For example, you might have enough points or miles for the flight or hotel stay you want, but it’s possible the loyalty program will have limited award spots for your travel dates, or have blocked them out altogether.

It’s a good idea to create a free loyalty account with programs you’re considering if you don’t have one already. From there, play around with some travel options to see how many points they would cost. In the meantime, check for overall availability for the types of trip you may want to book.

If you plan to earn airline miles with a specific airline and you can’t find any award availability for a destination you want to visit, that’s not a good sign. The same is true if you want to stay with a specific hotel but you find that the points required for a free night are exorbitant, or that award availability is difficult to find. That said, award availability has improved a lot over the last several years and blackout dates are becoming rare.

On the other hand, most general travel credit cards let you redeem your points for cash back, statement credits, merchandise and other options in addition to travel. If you’re worried about getting stuck with rewards that are difficult to use, a flexible travel credit card could be the way to go.

Important: Some travel credit cards let you transfer points to airline and hotel partners, which can help you get more value in return. If you like the idea of turning rewards into airline miles or hotel points, check out travel credit cards in the following programs: Chase Ultimate Rewards, American Express Membership Rewards and Capital One Miles.

3. Look for travel benefits you can use

Next, you’ll want to look at cards based on their travel perks and protections. Ideally, you’ll find a travel credit card that offers perks you can use and could actually benefit from.

Some of the travel benefits to look for include:

  • Travel insurance coverage, such as trip cancellation and interruption insurance, primary or secondary auto rental coverage, baggage delay insurance and more
  • Airport lounge membership or a specific number of lounge entries
  • Fee credits for Global Entry or TSA PreCheck
  • Automatic elite hotel status
  • Free checked bags, priority boarding and other airline perks
  • Annual resort credits
  • Free hotel WiFi
  • No foreign transaction fees

Most travel credit cards come with no foreign transaction fees, but this is especially important to check for if you’re someone who travels outside the U.S. Other perks you get may be specific to the type of card you apply for. For example, most airline or hotel perks come directly from co-branded travel credit cards aligned with the brand.

Premium travel credit cards tend to come with the most benefits, although they charge high fees as a result. Strive to get a card with perks and protections you’ll actually take advantage of and an annual fee you’re comfortable paying.

4. Do some math with fees

If you’re considering a travel credit card with an annual fee under $100, justifying the cost should be easy the first year. After all, many travel credit cards offer welcome bonuses worth $500 or more, and that’s on top of the rewards you earn on your spending.

Take the Chase Sapphire Preferred, for example. At the moment, the sign-up bonus for this card is 60,000 points when you spend $4,000 within three months of account opening. That’s worth $750 on travel booked through Chase Ultimate Rewards. An annual fee of $95 applies.

If you’re considering a premium card, however, you should make sure you’re not overpaying for benefits you won’t use. Generally speaking, premium cards are best for people who travel often and can take advantage of all the benefits.

As an example, the Chase Sapphire Reserve® will set you back $550 per year, yet the airport lounge membership that comes with the card has a retail value of $429. New cardholders can also earn 50,000 points (worth $750 in travel booked through Chase Ultimate Rewards) when they spend $4,000 within three months of account opening. Since the card also comes with a $300 annual credit toward travel expenses, it’s easy to make sense of the $550 annual fee during year one.

As a side note, you should also know that you do not have to pay an annual fee for a travel credit card at all. While there will generally be fewer perks, there are plenty of travel cards that don’t charge an annual fee or any hidden fees.

The bottom line

The right travel credit card for you depends on factors like how often you travel, the type of points or miles you can most easily use, the benefits you want the most and how much you want to pay. Fortunately, there are so many travel and rewards credit cards on the market today that you’re sure to find one that suits your needs.

Our advice? Take the time to compare travel credit cards from all the major card issuers, then make an informed decision based on your research. Also know you’re not stuck with the same card forever. If you wind up disappointed with the card you select, you can always request a product change or apply for a new one.

Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson began her career working in the funeral industry, which may make you wonder why she works in personal finance now. Yet, the funeral industry taught the author everything she needs to know about the value of one's money and time. Johnson left the mortuary business a decade ago in order to explore her passion for personal finance and travel the world, and since then, she and her husband have built a debt-free lifestyle that has them on the path to retire very wealthy in their 40s. Holly's love of budgeting also led to the creation of her debt payoff book, “Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love."
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