Travel credit cards can be one of the best ways to lower the cost of travel, whether you’re taking a trip to visit family in another state or boarding a plane for a luxurious vacation overseas. These cards offer a variety of benefits, from earning miles and points to accessing exclusive perks like airport lounge access and travel insurance. However, with so many options available, it’s essential to understand which cards are worth the annual fee and how to maximize their value.
What is a Travel Credit Card?
Travel credit cards come in many variations, but the main three categories include:
Co-branded airline credit cards
These cards, such as the Citi® / AAdvantage® Platinum Select® World Elite Mastercard® and the The New United℠ Explorer Card, earn miles in the respective airline’s loyalty program, which you can redeem for a flight when you have enough piled up.
Co-branded hotel credit cards
Hotel credit cards, like the IHG One Rewards Premier Credit Card, award you with hotel points redeemable for free nights.
Financial institution rewards cards
General travel rewards cards, such as the Chase Sapphire Preferred® Card or the Capital One Venture X Rewards Credit Card, earn flexible points that can be transferred to an array of travel partners.
Are Travel Cards Worth an Annual Fee?
Although a downside, many travel rewards cards come with annual membership fees. Some are reasonable and cost $95 to renew every year. Others charge as much as $695 per year, as The Platinum Card® from American Express does. It could still be worth it for the right traveler, though. The upside of travel rewards cards is they often come with benefits, statement credits, and travel protections, which can offset the annual fees.
For example, the Chase Sapphire Reserve® comes with a $795 annual fee. That price tag is steep. However, many people will be able to make up the annual fee through perks like a $300 statement credit good towards travel purchases and up to $500 (in the form of two $250 statement credits) for stays with The Edit, a collection of 1,000+ high-end hotels and resorts. It also comes with complimentary lounge access and a Global Entry/TSA PreCheck/NEXUS credit every four years, as well as trip delay insurance, baggage delay reimbursement, primary rental car insurance, and roadside assistance.
Are Travel Credit Cards Worth Your Time?
Although travel rewards cards make it somewhat easy to earn rewards, more often than not, they don’t make it easy to redeem rewards for high value, leaving you to figure that part out on your own. It’s true that learning how rewards programs work takes time and effort on your part and becoming a pro at maximizing your rewards won’t happen overnight. That’s not to say that it’s difficult to learn the basics.
Read articles on earning and redeeming travel rewards, practice running award searches, and become familiar with how credit card points can be used. Here are some resources to get you started:
Best Travel Rewards Credit Cards With No Annual Fee
With these cards, you reap points or miles without paying an annual fee. You will still need to consider foreign transaction fees if you plan to do a lot of international travel.
Capital One VentureOne Rewards Credit Card
This card offers 5X miles on hotels, vacation rentals, and rental cars booked through Capital One Travel. On all other purchases, you earn 1.25 miles per dollar. You can redeem your miles for travel bookings at a rate of 1 cent per point.
Wells Fargo Autograph Visa
Cardholders receive three points per dollar spent on dining, gas, streaming services, cell phone plans, and travel expenses, such as hotel, airfare, public transit, car rentals, and cruises. All other purchases earn one point per dollar.
Best Travel Cards Worth the Annual Fee
With a high payback on travel spending and some perks on the side, these cards make the annual fee worth paying. Note that Chase, Wells Fargo, and American Express offer cards praised for their rental car insurance coverage.
Capital One Venture Rewards Credit Card
This card has an annual fee of $95 and offers 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel. For every dollar spent on car rentals or hotel bookings through Capital One Travel, you earn five miles; all other spending earns two miles per dollar.
Citi Strata Premier℠ Card
This card has an annual fee of $95 and offers 60,000 points if you spend $4,000 in the first three months. You also get a $100 annual credit for a single hotel stay of $500 or more.
Best Cards for Flexible Travel Redemptions
Redeem points for travel bookings or transfer them to a broad range of partner airline and hotel loyalty programs.
Bilt Mastercard
This card from Wells Fargo has a unique feature: You earn one point per dollar on rent payments, with no transaction fees (annual earnings are capped at 100,000 points). Plus, get five points per dollar on Lyft rides and at restaurants in Bilt’s Neighborhood Dining program.
Chase Sapphire Preferred
This card has an annual fee of $95 and offers 100,000 points if you spend $5,000 in the first three months. You get five points per dollar on travel purchases made through Chase Travel and two points per dollar on other travel expenses.
Best Cards for Luxury Travel Rewards
Frequent travelers can more than overcome the high annual fees on these cards by taking advantage of a bevy of perks.
Capital One Venture X Rewards Credit Card
This premium card has an annual fee of $395 and offers 75,000 miles if you spend $4,000 in the first three months. You get an annual statement credit of up to $300 for purchases made through Capital One Travel and complimentary access to 1,300+ airport lounges worldwide.
Chase Sapphire Reserve
This card has an annual fee of $550 and offers 60,000 bonus points after you spend $5,000 in the first three months. You also get a $300 statement credit each year for travel purchases and complimentary access to Priority Pass airport lounges worldwide.
Best Dedicated Airline Cards
If you’re loyal to a certain airline or hotel chain, you may be a good candidate to use a credit card that provides points or miles from your preferred loyalty program.
Delta SkyMiles Platinum American Express Card
This mid-tier card from American Express has a strong earning rate. You’ll rack up three miles per dollar on Delta and related flights, two miles per dollar on restaurants worldwide and U.S. supermarkets, and one mile per dollar on all other qualified purchases.
JetBlue Plus Card
This card has an annual fee of $99 and offers 70,000 TrueBlue points after spending $1,000 in the first 90 days. You also get six points back for each dollar spent on qualifying JetBlue purchases, like airline tickets.
Best Dedicated Hotel Cards
Frequent guests of the hotel chains associated with these cards can get great value out of them, earning extra points for hotel stays and certain other purchases.
Hilton Honors American Express Surpass® Card
This card has an annual fee of $150 and offers 130,000 Hilton Honors Bonus Points after you spend $3,000 in purchases on the Card in the first 6 months of Card Membership. You also get Gold loyalty status with Hilton and a free night reward if you spend $15,000 on the card in a calendar year.
IHG One Rewards Premier
This card has an annual fee of $99 and offers 140,000 bonus points after spending $3,000 in the first three months. You also get a $120 statement credit every four years good for Nexus, Global Entry, or TSA PreCheck.
Best Dining Rewards Cards
Frequent diners can enjoy cash back and other perks using these cards.
American Express® Gold Card
This card has an annual fee of $325 and offers 100,000 Membership Rewards® Points after you spend $6,000 in eligible purchases on your new Card in your first 6 months of Card Membership. You also get four points for each dollar spent on the first $50,000 of restaurant purchases worldwide each year.
Capital One Savor Rewards
This card has no annual fee and offers a $100 credit to use towards flights, stays, and rental cars booked through Capital One Travel during your first cardholder year. Plus, earn a $200 cash bonus once you spend $500 on purchases within the first 3 months from account opening.
How Do Travel Rewards Cards Work?
Travel rewards credit cards offer points or miles on your purchases and may also offer other travel-related benefits. There are three main types of travel credit cards, including general travel cards, airline cards, and hotel cards.
General Travel Credit Cards
General travel rewards credit cards aren’t linked to a specific airline or hotel loyalty program. Instead, you’ll earn points or miles with the card issuer’s rewards program. Examples include American Express Membership Rewards, Chase Ultimate Rewards, and Citi ThankYou Rewards.
Airline Credit Cards
These credit cards are co-branded with a specific airline, such as Delta Air Lines or United Airlines. You’ll earn miles or points that you can use to book award flights with that airline or for other travel-related purposes.
Hotel Credit Cards
Like airline cards, hotel cards are co-branded with a particular hotel brand, such as Hyatt or Marriott. You’ll earn points with that specific hotel chain’s loyalty program, which you can use to book award stays, on-property experiences, and other travel.
What Are Travel Rewards Worth?
The value of the points or miles you earn with a travel credit card will vary depending on the rewards program and sometimes even the card. General travel programs typically offer predictable redemption rates. For example, you may earn one cent per point on travel bookings, one cent per point on gift cards, and half a cent per point for cash back.
With airline frequent flyer programs and hotel loyalty programs, redemption values can vary depending on several variables. With an award flight, for instance, the departure and arrival airports, flight dates, and cabin will influence how much your points or miles are worth. With hotel programs, your stay dates, the property category, location, and room type can impact your value.
To get an idea of how much value you’re getting per point, divide the cash price of an airline ticket or hotel stay by the number of points or miles required to book it. For example, if you can book a $300 flight with 15,000 miles, divide $300 by 15,000, giving you a value of two cents per point.
How to Compare Travel Credit Cards
If you’re thinking about a travel credit card, it’s important to choose one that’s aligned with your travel habits and goals. Here are some of the factors to consider when shopping around and comparing your options:
Welcome Bonus
Consider how much value you can get with the card’s upfront bonus and whether you can meet the minimum spending requirement to earn it.
Rewards Rates
Travel credit cards may offer a flat rewards rate on all purchases or a tiered rewards structure, with bonus rewards on certain spending categories. Try to pick a card that allows you to rack up as many points or miles based on where you spend your money.
Redemption Options
Consider how much flexibility you’ll get with your rewards. If your goal is to get free flights or hotel stays with a particular airline or hotel brand, pick an airline or a hotel credit card. If you want more options, however, consider a general travel credit card.
Redemption Values
If you’re comparing two different cards, one may offer a higher welcome bonus and more points per dollar spent than the other. However, if the value of those points is lower than what you’d get with the second card, you might actually get less value.
Perks
Think about how you want to use your credit card to elevate your travel experience, then seek out perks that can help you accomplish that objective. And don’t forget about trip protections, which can save you some money if things don’t go as planned on a vacation.
Annual Fee
Travel credit cards tend to charge annual fees, but some can run in the hundreds of dollars. Consider how much you’re willing to pay each year for a credit card’s rewards and benefits.
International Acceptance
If you pick an American Express or Discover credit card, you may have trouble using your credit card abroad. In this case, you can either bring a Visa or Mastercard credit card as a backup or simply get a Visa or Mastercard in the first place.
Is the Annual Fee Too High?
Even if you generally like to avoid credit card annual fees, it can be worth paying one in exchange for great benefits. To determine whether an annual fee is worth it to you, consider the following:
- Calculate the value of the card’s welcome bonus to see how many years’ worth of the fee it covers.
- Add up the monetary value of the card’s benefits, making sure to include only benefits you’ll actually use.
- Consider the benefits that are difficult to assign a monetary value — rewards flexibility, trip protections, or airport lounge access — and what they’re worth to you.
- Estimate how much value you’d get in rewards each year based on your spending habits.
Some travel credit cards offer enough value to cover the cost of the annual fee in benefits alone. If a card charges an annual fee and is scant on perks, it might not be worth the cost.
How to Get the Most Out of Your Travel Card
Once you pick a travel rewards credit card, here are some tips to help you maximize its value:
- Make sure you earn the bonus: You’ll typically have three or six months to meet the minimum spending requirement to earn a credit card’s welcome bonus.
- Use your card for everything: Try to use your credit card for everything that you can use it for.
- Pay in full every month: Make it a goal to pay off your balance in full every month to avoid paying interest, which can neutralize the value of the rewards you earn.
- Get to know your card benefits: You can find most of the card’s benefits on the card issuer’s website, but make sure you read through the benefits guide you receive with your card, so you know everything about its perks.
- Research the best ways to redeem: Each program is different in how you can redeem rewards, and some may offer outsized value if you redeem them in a certain way.
Conclusion
Travel credit cards can be a powerful tool to enhance your travel experiences while saving money. Whether you’re looking for no-annual-fee options, luxury rewards, or airline-specific benefits, there’s a card tailored to your needs. By understanding the different types of travel credit cards, evaluating their features, and considering your travel habits, you can choose the right card to maximize your rewards and make your next trip more affordable. Remember to always read the terms and conditions, and don’t hesitate to reach out to the card issuer for any questions or concerns. With the right card, you can turn every purchase into a step closer to your next adventure.
