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Travel cards offer perks and miles to make life more rewarding for jet-setters. But if you don’t fly often, you may find better rewards with a cashback card.
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A travel credit card offers rewards for travel purchases — typically points or miles, but sometimes cash back. Like a rewards card, you can redeem these points or miles for certain goods. In the case of travel cards, this usually includes hotel stays, flights or other travel expenses.
Travel cards also offer a variety of travel perks, such as airport lounge access or travel credits. And you tend to get what you pay for: No-annual-fee cards tend to offer fewer high-class benefits than annual-fee products.
Find a card that best suits your travel and flight preferences. Once you choose a card, you can apply like any standard credit card.
Now that you have a card, use it to make purchases that best help you earn miles toward your account. For a cobranded card, this typically includes purchases through the travel company.
So long as you put your travel expenses on your card, a travel card often proves its worth. Here’s an example of what you can expect to earn back or save based on a short holiday trip within the US using a Chase Sapphire Reserve, putting aside the card’s annual fee.
Travel | Cost | Rewards earned |
---|---|---|
Round trip flight for two | $300 (normally $600, but 300 removed thanks to card’s statement credit) | 900 points |
Meals | $150 | 450 points |
Hotel stay for 2 nights | $400 | 1200 points |
Priority pass meal credit (both ways) | -$116 | – |
Total rewards | ||
Points earned | 2,550 ($38.25 when redeemed through the Chase travel portal) | |
Money saved | $416 |
Yes. While travel overall might have dipped since the beginning of the pandemic, providers have been adjusting their travel cards to ensure continued value even without regular travel. Many travel cards, for example, have added everyday rewards categories, such as groceries and gas. In fact, some travel cards have become more valuable as a result.
Travel credit cards offer a dizzying variety of perks and benefits. Here are the five most common questions we receive on the subject.
Megan Horner
Credit Cards Publisher
Hi, I’m Megan! I love the travel credit cards in my wallet, especially the one that gives me airport lounge acess and Global entry. Before I open up a credit card, I aways do a ton of research. Here are some articles that might answer the questions you have.
When are travel rewards cards worth it?
Travel reward cards are worth it for a small percentage of consumers who prioritize travel when making financial decisions. The problem with a pure travel reward card is its single payout. The outcome of using the card will only allow the card holder to receive travel-related products such as flights and hotels. If a consumer does not prioritize travel due to whatever reason, that consumer receives no return on the use of the card.
How much are miles generally worth?
While the value of each mile ranges from just over a penny to as much as 10 or 15 cents, there is a lot of variation in the value when you redeem miles. Most airlines restrict how many seats can be redeemed with rewards miles, have black-out dates, and charge more miles for more desirable dates and destinations. You may need to plan with a long lead time to visit your preferred destination—or pay with more miles and/or fees. It’s not uncommon to book 11 months in advance for a desirable port of call such as Athens, Greece in the summertime if you want to pay with fewer air miles.
When is it worth it to pay an annual fee on a travel card?
Paying an annual fee on a travel card is worth it only if you can reasonably make back the fee through its benefits and rewards or if it provides desirable optionality for redemption. Statement credits, discounts at retailers, and other card benefits can get you back to par. But the most important consideration is whether the card affords you the option to redeem for rewards that you can use.
Before applying, count how many ways you can redeem your miles or points with the airline or the credit card issuer itself. And pay attention to the quantity and quality of travel partners that are a part of the redemption network.
Generally, how early do you have to open a travel credit card if you’re planning on using the welcome bonus to book a vacation?
Because most airlines and hotels allow you book approximately one year in advance of travel, I recommend applying for rewards cards approximately 18-24 months ahead of your vacation. This will give you enough time to receive the card, receive the bonus, and earn additional rewards through daily purchases.
Should I pay off one credit card or reduce the balances on all debt?
Make minimum payments for cards with lower interest rates and pay as much as possible against the card with the highest interest rate until that balance is gone. Then move on to the card with the next highest interest rate. Put new purchases on a card with a zero balance and pay it off every month, or put purchases on the card with the lowest interest rate and pay down high-interest cards faster.
When is a travel rewards card better than a cashback card?
As part of their consideration of various rewards programs, consumers should think about how often they engage in particular activities and the types of products/services they are consuming on a regular basis. For example, someone who travels frequently may be able to earn more from a travel rewards card than a card that offers cash back on all purchases, even if the travel rewards card does not offer a higher percentage than the cashback card each time it is used.
However, even a frequent traveler should think about factors such as transportation to and from their destination as well as during their stay, accommodations, and other related expenses that are directly related to travel, in addition to how many people they tend to travel with. If many of the typical service providers, vendors, and retailers are not covered by the travel rewards card, a cashback card may make more sense. Regardless of the options they are choosing among, consumers should be sure to read all details related to benefits, criteria, and rules—including any fine print—before making a final decision.
Do credit card rewards encourage consumers to spend more than they would otherwise?
Research confirms that credit cards encourage greater spending than if cash were used The average households with credit cards has $8,398 of credit card debt. Often times this is out of necessity due to illness or emergencies. But more often it allows individuals to concede rational choice to satisfy the need for instant gratification. Our economy has $50 trillion of credit versus $3 trillion of cash, so it is partly a function of our system. It encourages credit card usage. But the choices are still ours to make.
If you consider yourself a jet-setter, you could get a lot from a travel card. There are a variety of options for whatever you’re looking for.
Before you start your search, consider whether you want to pay an annual fee, what you typically spend on and which travel benefits you’re looking for. Take your time to compare different products, and you’ll likely find a card that’s perfect for you.
Kevin Joey Chen is a credit cards, banking and investments writer whose work and analysis have appeared on CNN, U.S. News & World Report, Business.com, Lifehacker and CreditCards.com. He's passionate about helping you get your finances in order by expertly navigating cutting-edge financial tools — including credit cards, apps and budgeting software.
Here are our picks for the top travel cards on the market.
Earn rewards and up to three free nights with this Radisson card.
Earn rewards on your Wyndham purchases and get complimentary elite status.
Earn Emirates miles on your purchases without paying a high annual fee.
Earn Emirates miles on your purchases and enjoy premium benefits with this airline credit card.
You’ll need a doctor’s confirmation to use your travel insurance.
Your Visa coverage depends on your credit card provider.
Mastercard offers car rental insurance depending on the issuer.
Cashback cards are among your best options.
Gatwick’s North and South Terminals have lounges throughout, but their availability and access can be a challenge. Our guide can help.
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