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- Consumers can find travel credit cards that are co-branded with a specific airline or hotel loyalty program, as well as general travel credit cards that apply to most types of travel.
- Many frequent travelers sign up for a new travel credit card in order to score a big sign-up bonus, yet it’s crucial to consider a card’s long-term value as well.
- With travel credit card annual fees ranging from $0 to $695, consumers will need to assess the value of the travel perks they’ll receive to know if an individual card makes sense for them.
- Ultimately, the best travel credit card for consumers will be the one that gets them the most in rewards and benefits for the annual fee they pay.
Choosing the best travel credit card can be a tough decision, mostly because there are multiple card issuers, rewards programs and types of travel rewards you can earn. That said, the right travel credit card can help you earn points or miles for free travel and improve your travel experience. After all, many top travel credit cards come with annual free nights, travel insurance, waived checked baggage fees, airport lounge access and more.
Before you choose a travel card, you’ll need to understand which type of travel card best suits your spending style and travel needs. Below are five steps to follow to help you choose the best card for traveling.
- For one person, the average cost of a one-week vacation in the U.S. is $1,984. For two people, the average cost of a one-week vacation is $3,969. (Budget Your Trip)
- 80 percent of Bankrate survey respondents said they are changing their vacation plans due to inflation. (Bankrate)
- 20 percent of surveyed travelers plan to use credit card rewards to reduce travel costs. (Bankrate)
- The average APR for an airline credit card is 20.70 percent. (CreditCards.com)
- The average APR for a rewards credit card is 20.71 percent. (CreditCards.com)
1. Decide between a co-branded or general travel credit card
Before you do anything else, you’ll want to think long and hard about the type of travel rewards you want to earn. You can start by considering how much flexibility you’d like when it comes to redeeming points or miles, along with your typical travel style and whether you have any preferred airlines or hotels.
- Co-branded travel credit card
- Co-branded travel credit cards are issued by a bank in partnership with a specific airline or hotel loyalty program. You earn rewards in the form of the airline or hotel's points currency.
- General travel credit card
- General travel credit cards are issued by a bank and are not aligned with a particular airline or hotel brand. Travel rewards earned from general travel credit cards are redeemable in the issuer's travel portal or by transferring them to travel partners (where eligible).
Many co-branded travel credit cards come with on-brand travel perks. For co-branded airline cards, that typically means free checked bags, priority boarding or in-flight discounts. For co-branded hotel cards, that typically means annual hotel credits or automatic hotel elite status. Because co-branded cards let you earn and redeem rewards in a specific travel program, however, they’re best for travel loyalists who use the same brand frequently.
General travel credit cards allow you to earn rewards in a credit card rewards program that lets you use your points or miles in various ways. For example, you may be able to transfer your rewards to several different airline and hotel loyalty programs or use them to purchase travel through your card issuer’s travel portal. You may also be able to redeem your rewards for statement credits, gift cards and select merchandise, among other options. Generally speaking, flexible travel credit cards are best for people who want to use rewards for travel without being tied down to a specific airline or hotel brand.
2. Look for a big sign-up bonus
As you compare the top travel 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 welcome bonuses that are worth $1,000 or more, depending on how you redeem your rewards.
For instance, the Chase Sapphire Reserve® offers a welcome bonus of 60,000 points after spending $4,000 on purchases within the first three months of account opening. If you redeem that bonus for travel through the Chase Ultimate Rewards travel portal, your points will be worth 1.5 cents a piece, making your bonus worth $900. And if you redeem your bonus with a high-value Chase transfer partner, your rewards could be worth around 2.0 cents according to our points and miles valuations, making your bonus worth $1,200.
But before banking on those hefty credit card welcome bonuses, make sure you’re able to meet the minimum spending requirements within the required timeframe. For rewards cards, minimum spending requirements typically range from $500 to $15,000 and must be met within three to six months. Most people meet spending requirements by charging their daily expenses and monthly bills to their credit card, although that can become more difficult to manage on the higher end of the scale.
Then again, some cards allow you to earn a big welcome bonus with as little as a single purchase. For example, the AAdvantage® Aviator® Red World Elite Mastercard®* offers 50,000 AAdvantage miles after making one purchase and paying the card’s annual fee ($99) in full within the first 90 days. This offer is especially impressive considering the Citi® / AAdvantage® Platinum Select® World Elite Mastercard®*, which also comes with a $99 annual fee (waived the first 12 months), requires you to spend $2,500 within three months of account opening to earn 50,000 AAdvantage miles.
If you’re thinking about opening a rewards card with a higher minimum spending requirement — such as $4,000 over three months — you’ll want to do the math to make sure you can meet this requirement with regular spending and bills. For example, spending $4,000 within three months of account opening requires you to have at least $1,334 in monthly expenses you can charge to the card for three months in a row.
3. Look for lucrative rewards categories that make sense for you
While there’s nothing wrong with going after a big bonus, you should also aim to earn rewards that align with your spending habits in order to reap the benefits of the card long-term. That’s where rewards cards with everyday bonus categories and travel perks come in.
If you spend a lot in specific categories, it makes sense to look for cards that offer bonus rewards in those categories. For example, if you spend a lot on dining, gas and groceries, as well as on travel, the Citi Premier® Card would be a great fit because it offers 3X points on restaurant, supermarket, gas station, hotel and air travel purchases. It also allows you to transfer your rewards to Citi’s airline and hotel partners, which can help you to get more value from your rewards.
On the other hand, if you don’t want to keep track of which credit card to use (and when), you can opt for a flat-rate cash back card like the Citi Double Cash® Card, which offers up to 2 percent cash back on all purchases — 1 percent as you make purchases and another 1 percent when you pay off your purchases. Although the Citi Double Cash isn’t a travel card per se, and you can’t transfer your points to travel partners, it does allow you to redeem your cash back as basic Citi ThankYou points, which can then be redeemed for travel through the Citi portal.
4. Identify which travel perks matter most to you
Next, you’ll want to look at rewards cards based on their travel benefits and protections. Ideally, you’ll find a travel credit card that offers perks you can actually benefit from, rather than ones that just sound flashy. The right benefits can help offset your card’s annual fee and generate hundreds of dollars worth of value every year.
Premium travel credit cards tend to have the most benefits, although they also charge higher annual fees. For example, The Platinum Card® from American Express — which is frequently considered one of the best rewards credit cards for travel — comes loaded with well over $1,000 worth of recurring benefits, largely in the form of memberships and travel credits, in exchange for a $695 annual fee. However, you’ll want to evaluate whether you can take advantage of enough of the card’s plentiful benefits to justify the card’s annual fee.
As you compare travel credit cards with perks that can make the annual fee well worth paying, look for the following benefits:
Some of the best credit cards for airport lounge access offer a Priority Pass Select airport lounge membership, whereas others let you visit select lounges a certain number of times per year. Some issuers, like American Express and Capital One, even have their own airport lounge networks for eligible cardholders.
Many travel credit cards come with an application fee credit (usually up to $100) for Global Entry, TSA PreCheck or NEXUS membership. These fee credits can typically be used every four to five years. Some credit cards also come with membership credits or discounts toward Clear Plus membership (annually).
While airline credit cards don’t typically grant automatic elite status, some cards let you earn elite-qualifying points or miles toward elite status through credit card spending. The value of earning elite status through credit card spending can be difficult to quantify, but it can help you reach the same level of status without having to spend as much on flights.
Many airline credit cards come with free checked bags, priority boarding, in-flight discounts on food and beverages and other airline perks you just can’t get with a general travel credit card. The free checked bag benefit alone can easily save you $30 per person per one-way flight, and some airline credit cards extend this perk to multiple people on your itinerary.
Some hotel credit cards and general travel credit cards come with annual credits for eligible hotel stays. For example, the Citi Premier Card offers an annual $100 discount on a single hotel stay of $500 or more (excluding taxes and fees) when you use your card to book through ThankYou.com. Some co-branded hotel cards also offer a free anniversary night that can make paying the annual fee on a card worth it after the first year. After all, you might be able to pay a $99 annual fee on a hotel credit card and then use your anniversary night benefit to book a hotel stay that could cost $150, $200 or more.
Beyond application or membership fee credits for TSA PreCheck, Global Entry, NEXUS or Clear Plus, many general travel credit cards also offer flexible credits to cover general travel purchases (usually up to $300 worth) or other, more specific annual credits. Some commonly-featured annual credits to look for include airline fee credits for incidentals with a particular airline, gym membership credits, credits for eligible subscription services, Uber or Lyft credits, dining credits or credits with a specific retailer.
While travel insurance isn’t usually a perk that makes paying an annual fee worth it alone, many of the best general travel credit cards come with numerous travel insurance benefits. Some travel insurance perks to look for include trip cancellation and interruption insurance, primary or secondary auto rental coverage, trip delay reimbursement, baggage delay insurance, lost or damaged baggage protection and emergency medical benefits.
5. Do the math to minimize fees
Are travel credit cards worth it? It all depends on the perks you’ll get in exchange for paying an annual fee, and how much that annual fee costs. 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® Card, for example. At the moment, the sign-up bonus for this card is 60,000 points (worth $600) when you spend $4,000 within three months of account opening. That’s worth $750 in travel when you book through Chase Ultimate Rewards, which more than offsets the $95 annual fee.
However, you don’t have to pay an annual fee for a travel credit card at all. There are plenty of travel credit cards with no annual fee that offer tremendous value. For example, the Discover it® Miles comes with a $0 annual fee and unlimited 1.5X miles on all purchases. Plus, all miles earned at the end of your first year will be matched.
When it comes to travel cards, it’s also important to be aware of foreign transaction fees. These fees are usually around 3 percent of each transaction made abroad and they can really add up if you spend a lot overseas. In that case, a credit card with no foreign transaction fees, even if it comes with an annual fee, might save you more in the long run.
Still not sure if you should get a travel credit card? Check out our Credit Card Spender Type tool, where you can get personalized credit card recommendations based on your spending habits, daily needs and credit score.
The bottom line
The right travel credit card for you depends on factors like how often you travel, the type of rewards you’ll use, the benefits you want the most and how much you’re willing to pay to hold the card. Fortunately, there are so many amazing travel rewards credit cards on the market today that you’re sure to find one that suits your needs.
Take the time to compare our list of the best travel credit cards. Then, make an informed decision based on your research. Also, know that 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 card that better meets your needs.
Issuer-required disclosure statement
Information about the AAdvantage® Aviator® Red World Elite Mastercard® and Citi® / AAdvantage® Platinum Select® World Elite Mastercard® has been collected independently by Bankrate and has not been reviewed or approved by the issuer.