Are travel credit cards worth it?

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.

You should get a travel card when you have good or excellent credit and take at least one big trip per year. The best travel cards require a credit score of 700+ for approval, and you need to travel regularly to take full advantage of a travel card’s rewards and other benefits. It’s also best to get a travel rewards credit card when there’s an offer for a big initial bonus.... read full answer

What You Should Do Before You Get a Travel Card

Make sure you travel frequently enough.

The best travel cards are only valuable if you use them regularly. That means consistently making purchases with the card, especially in its bonus-rewards categories. It also means utilizing the card’s benefits and rewards enough to offset any fees and to actually get the chance to enjoy your earnings.

Be sure to familiarize yourself with the rewards program associated with your travel card to get a better idea of how much you’ll need to travel in a year for the card to be worthwhile.

Decide what type of travel rewards card you want.

If you’re partial to a specific airline or hotel chain, getting a co-branded travel card is a good idea. These cards can provide more rewards and benefits, like free hotel nights and upgrades, when you use the card with participating hotels and airlines. Some cards may include additional valuable perks such as airport lounge access and annual travel credits.

Travelers with no loyalties to any airline or hotel brand should opt for standard travel rewards cards, which tend to offer more choices when earning and redeeming rewards.

Make sure you can afford any initial bonus spending requirements.

Travel credit cards that offer huge initial bonuses often come with lofty spending requirements – $3,000 in the first three months, for example. Consider whether you can realistically spend enough by the deadline to qualify for the bonus. If you overspend just to earn an initial bonus, interest charges on your unpaid balance will diminish how much you actually save from rewards.

Take annual fees into account.

Think about whether a travel card will pay for itself before you shell out big bucks every year just to own the card. Big-spenders who travel frequently and covet the luxury amenities that high-end travel cards tend to offer probably won’t find this to be an issue. On the other hand, occasional travelers should consider a travel card with no annual fee.

Check your credit score to see if you qualify.

There’s no point in applying for a travel card if your credit score falls short of the card’s minimum requirement. If your credit does come up short, consider a lower-tier card or just focus on rebuilding your credit first and then apply for a travel card in a few months.

You can check your latest credit score for free on WalletHub to see where you stand. You can also compare WalletHub’s editors’ picks for the best travel credit cards to help narrow your search.

The best vacation credit card is the Chase Sapphire Preferred® Card, in large part because it offers 60,000 bonus points for spending $4,000 in the first 3 months. Cardholders also earn 1 - 5 points per $1 spent on purchases. Specifically, you’ll get 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.

Chase Sapphire Preferred is a Visa card, which means it’s accepted in 200+ countries and territories. It has a $0 foreign transaction fee, too.

Best Vacation Credit Cards... read full answer

Ultimately, the best credit card for a vacation really depends on the cardholder’s interests and what types of travel they favor. Each of the best vacation credit cards has something unique to bring to the table, whether it’s specializing in a certain type of vacation or offering supplemental benefits. Most vacation credit cards also have an annual fee, but the fee is often outweighed by the value the card gives in return.

On that note, big spenders may want to consider a relatively pricey card in order to get better perks. For example, Chase Sapphire Reserve costs $550 per year. But it offers an initial bonus of 60,000 bonus points for spending $4,000 in the first 3 months, 1 - 10 points per $1 spent on purchases, up to $300 in statement credits each year for travel booked through Chase Ultimate Rewards, an annual lounge membership, and more in return.