Are airline credit cards worth it?

How much 40,000 miles are worth depends on the airline or credit card you earn them from and when you book your flight. On average, 40,000 miles are worth about $400. But it can vary widely. For example, 40,000 AAdvantage miles are worth roughly $456 in American Airlines airfare. With United, 40k miles get you $416 in flights. And 40k Delta miles are worth $532.... read full answer

Here’s how much 40,000 miles are worth by airline:

1. Lufthansa: $916
2. Southwest: $616
3. JetBlue: $572
4. Delta: $532
5. American: $456
6. United: $416

Credit card miles that aren’t tied to a particular airline typically get you a penny each. But how you redeem your miles is really important, too. For example, the Capital One Venture Card’s 50,000-mile initial bonus is worth $500 when used for travel but just $250 when redeemed for cash.

Yes, travel credit cards are worth it because they can save you a lot of money. Travel credit cards are best for people who travel multiple times per year and who spend enough for the cards’ rewards and supplemental benefits to outweigh any annual fees. People who travel less frequently may also find travel credit cards with no annual fee to be worth it.... read full answer

In addition, it’s worth noting that a travel credit card could be one of multiple cards in your wallet. It’s not necessary to choose between travel rewards and cash back, for example.

Most Worth It Travel Credit Cards

6 Tips for How to Decide If a Travel Credit Card Is Worth It

1. Compare expected rewards earnings to the cost of the card. For a travel credit card to be worth it, the card’s rewards and benefits should outweigh its fees.
2. Compare the value to other credit card offers. The travel credit card’s net value – rewards and benefits, minus fees – should be higher than what other comparable cards offer. A credit card is not truly worth it if getting that card means bypassing a better deal.
3. Take annual fees into account, but don’t rule them out. Nearly all of the best travel credit cards charge an annual fee. But there are plenty of benefits that reduce the impact of such a fee. For example, an initial bonus is one factor that can easily make a travel credit card worth getting. The best travel rewards cards offer sizeable bonuses when you meet minimum spending requirements in the first year. Top initial bonus offers cover the cost of their card’s annual fee for several years.
4. Make sure the redemption options suit you. Typically, you can redeem a travel card’s rewards for travel-focused purchases such as airfare or hotel stays, as well as other options like gift cards, merchandise or cash. The value of those rewards varies by card. But in most cases, you’ll get the highest value when you redeem for travel.
5. Consider co-branded travel cards if you have a favorite airline or hotel chain. People who frequent a specific hotel or airline may get the most value from co-branded travel cards that offer enhanced rewards for loyal customers. Common perks on such cards include free checked bags, seat or room upgrades and lounge access. However, you’ll lose flexibility when earning and redeeming rewards, relative to a general travel card. Co-branded travel cards tend to give the best rewards at their affiliated airline or hotel, and your rewards are usually tied to that company’s loyalty program.
6. Make sure there’s no foreign fee if you’re spending internationally. The travel credit cards that are most worth it for international travelers and shoppers are ones that come with no foreign transaction fee. Foreign transaction fees can be as costly as 3% of each purchase made with a foreign merchant. But luckily, most travel cards don’t have this fee.

It’s also important to check your credit score before submitting an application for any travel credit card. The best travel credit cards tend to require at least good credit (a score of 700+), and some even require excellent credit (a score of 750+) for approval.

Travel credit cards work just like any other rewards credit card, though they tend to reward cardholders more for making travel-related purchases than anything else. The points or miles that travel credit cards provide are also usually worth more when redeemed for travel, compared to other redemption methods. Plus, travel credit cards commonly offer features such as travel insurance, no foreign transaction fee, airport lounge access, and reimbursement for TSA PreCheck/Global Entry application fees.... read full answer

Travel rewards credit cards offer rewards in one of two currencies: miles or points. There isn’t much of a difference between the two, but miles are more frequently used in the context of airline rewards, while points are often associated with hotels. On that note, co-branded travel cards tend to give higher rewards rates and special perks with specific airline and hotel brands, while non-cobranded travel cards don’t favor any particular brand but give good rewards on travel purchases in general.

How Travel Credit Cards Work

They often reward you more for travel.

Travel purchases are usually going to be a lot more profitable rewards-wise than other types of purchases. For example, Chase Sapphire Preferred gives 5 points per $1 spent on travel purchased through Chase, 2 points per $1 on all other travel purchases, 3 points per $1 on dining and online grocery purchases, 3 points per $1 on select streaming services, and 1 point per $1 on all other purchases. But this isn’t true for every card. Capital One Venture, for instance, gives 2 miles / $1 on almost all purchases.

Travel redemption is usually the best value.

In most cases, you don’t have to spend your rewards on travel, but the credit cards companies give big incentives for you to do so. Take Chase Sapphire Preferred, for example. You get 25% more value from your points when you redeem them for travel.

No foreign transaction fees.

Very few travel cards will charge you extra for using your card abroad or with foreign merchants online. But you should check your cardholder agreement just to be sure.

There may be booking restrictions.

Some travel cards, like Capital One Venture, pride themselves on rewarding you equally for any type of travel, no matter where you book it. But other cards, especially airline or hotel cards, may only give travel-specific rewards rates if you book directly through the issuer.

You may need at least good credit.

Travel rewards cards are typically available only to people with good or excellent credit. You should shoot for a credit score of 700+ for cards that require good credit and 750+ for excellent credit.

You’ll often get travel insurance & other perks.

Travel insurance is a big plus. Some cards will cover you for trip cancellation, delays or accidents. Many travel credit cards still offer rental car insurance, too, though many regular credit cards have dropped that benefit. Certain cards, generally those with annual fees, also give you a yearly credit toward airline or travel purchases. You may even get other perks like free airport lounge access and the ability to transfer your points or miles to hotel and airline loyalty programs.

So if you travel frequently, getting a travel credit card is a good idea. After all, you might as well get rewarded for trips you’d go on anyway.