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Are travel credit cards worth it?
Travel credit cards can offer valuable rewards, but only if the perks outweigh the costs.
Should I get a travel credit card?
Whether you should get a travel credit card comes down to your travel and spending habits, as well as your financial needs. Here’s a quick cheat sheet.
You should get a travel credit card if…
- You travel more than a few times a year.
- You primarily want to spend your card rewards on travel.
- You want to take advantage of the card’s travel features.
You shouldn’t get a travel credit card if…
- You rarely travel.
- You want a simple rewards card.
- You don’t often take advantage of your credit card’s additional features and perks.
Is it worth getting a travel card with an annual fee?
Typically, yes. The most valuable travel cards have high annual fees, but you can offset these costs with the rewards you earn and perks you use.
If you’re relying on pure rewards, the amount of rewards you’d earn on spending will need to at least equal the cost of the annual fee. If your monthly spending is less than a card’s “break even” amount, the card may not be worth paying for.
Let’s look at a few different travel cards to see how much you’d have to spend each month to break even on the annual fee.
|Card||Ongoing annual fee||Rewards rate||Points for $100 of value||Approx. monthly spend to break even|
|PenFed Pathfinder® Rewards Visa Signature® Card||$0||3x points on travel, 4x for PenFed Honors Advantage members; 1.5x points on all other purchases||10,000||$0|
|Chase Sapphire Preferred® Card||$95||5x points on Lyft rides through March 2022; 2x points on travel and dining; 1x points on all other purchases||8,000||$317 on travel and dining|
|The Platinum Card® from American Express||$695||5x points on eligible flights and hotels on up to $500,000 annually, reverting to 1x points after starting January 2021; 1x points on other eligible purchases||10,000||$917 on eligible flights and hotels|
Point values are based on our calculations using provider websites as of July 2021
These calculations only take into account the rewards you might earn. You might also get a significant amount of value from a card’s travel benefits. These features can add enough value that you might not need to spend much to make the annual fee worth paying.
How can I take advantage of my card’s travel features?
You can justify a card’s cost by making sure you use the features or credits offered. Consider The Platinum Card® from American Express as an example.
The card has an annual fee of $695. You get up to $200 in annual Uber credits after you enroll, up to $200 in airline fee credits on one qualifying airline of your choice with enrollment and up to $100 credit every four years for your Global Entry or TSA PreCheck application.
If you use your travel and Uber credits each year, it should be relatively easy to offset the price of the card. You might find the card’s other features valuable, too, including complimentary gold elite status after you enroll, benefits at Fine Hotels & Resorts properties and entry into airport lounges in the Global Lounge Collection after enrollment.
Travel credit card pros and cons
- Turn everyday spending into travel, including airline flights and hotel stays
- Many include valuable perks worth hundreds of dollars, such as airport lounge access
- Some travel cards let you transfer your earned points to multiple airlines or hotel chains
- They often come with valuable signup bonuses greater than what you’d find on a cashback card
- Most (though not all) don’t charge foreign transaction fees
- Many have complex reward systems that take effort to use properly
- The more popular travel cards often carry higher than average annual fees
- Some travel cards are locked into a specific travel organization
Compare travel credit cards
If you’ve decided a travel card is right for you, take a look at the following travel credit cards that could be a good fit.
What perks will I get with a travel credit card?
With most travel cards, you can generally expect to receive a few of the perks listed below:
- Airport lounge access.
- Fee credit for your Global Entry or TSA PreCheck application.
- Travel credits that cover your expenses for eligible purchases.
- Airline credit cards have perks like priority boarding and complimentary checked baggage.
- Hotel perks like spending credits and room upgrades.
- Hotel or airline loyalty program status upgrades. Many of the top hotel credit cards offer upgrades to silver or gold status.
- Travel coverage: trip cancellation insurance, auto rental collision damage waiver, lost luggage reimbursement and more.
- Travel concierge service.
Get an in-depth look and learn how you can take advantage of these perks while traveling.
How to compare travel credit cards
If you’re in the market for a new travel card, compare the following factors while considering your options.
- Airline or hotel loyalty. If you spend heavily with a certain airline or hotel chain, consider a cobranded card. Otherwise, pick a flexible-rewards card so you can earn rewards regardless of which airline or hotel you spend with. There are even cobranded credit cards for cruise lines if you like to take to the seas.
- Signup bonus. Many travel credit cards have introductory offers of thousands of bonus points or miles. Compare the bonus rewards you might earn, as well as spending requirements.
- Rewards. Compare how many points you’ll earn per $1 spent. Among travel cards, you’ll typically find flat-rate rewards and tiered rewards. If you’re considering a tiered-rewards card, check whether you spend much in the card’s bonus categories. If not, a flat-rate-rewards card might be a better choice.
- Annual fee. Check that a card’s rewards and perks outweigh any annual fee. Some travel cards have $0 or reduced annual fees for the first year, which can help you save. However, make sure you know what the standard annual fee is and when it will apply.
- Foreign transaction fees. Many credit cards charge a fee when you make purchases in currency other than US dollars — typically 3% of the transaction. These fees apply whether you’re traveling overseas or just using an online store based outside the US. To avoid them, look for a credit card with 0% foreign transaction fees.
- APR. To get the full value from your rewards, it’s best to always pay your monthly balance in full. Interest will eat into your rewards, so try to avoid it.
- Travel protection. Many cards offer travel protection, such as car rental insurance and trip cancellation insurance. Though these aren’t the flashiest features, they can be very helpful when you’re planning a trip. Picking a card with the right travel protection can save you hundreds of dollars on your next vacation.
Only apply for a travel credit card if it offers enough rewards and perks to offset its cost, so be sure to look at its annual fee and APR. The lower the APR, the better — though you’ll probably want to pay off your balance each month anyway. Compare some of the best travel credit cards to find the one that best fits how and where you spend.
Keep in mind that a travel credit card isn’t for everyone. If you want a rewards card without dealing with points or miles, consider a cashback card.
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