Yes, travel credit cards are worth it 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.
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.
6 Tips for How to Decide If a Travel Credit Card Is Worth It
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.
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.
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.
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.
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.
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.
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.
The best vacation credit card is the Capital One Venture Rewards Credit Card. It offers 75,000 miles for spending $4,000 in the first 3 months and it gives 2 miles / $1 on all purchases. Also, you are not tied down to a particular travel provider, since you can redeem rewards for any recent travel expense. Capital One Venture is a Visa, too, which means it’s accepted in 200+ countries and territories.… 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, Capital One Venture X costs $395 per year. But it offers an initial bonus of 75,000 points for spending $4,000 in the first 3 months, up to $300 in statement credits for travel booked through Capital One Travel each year, an annual lounge membership, and more in return.
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