It may come as a surprise to learn that there are literally hundreds of credit cards to choose from in the United States today. While some of them simply give cardholders another way to make purchases, others offer some very lucrative rewards along the way.
Many of today’s top credit cards fall into the travel rewards category. While some of these cards are known to offer enviable bonuses and benefits, they aren’t right for everyone.
Here’s how to decide if you need a travel rewards credit card and if so, how to shop around for the right one.
Why a travel rewards card
I saw a sign a few years ago that read, “If traveling was free, you’d never see me again.” To some extent, I imagine that most of us share that sentiment.
The unfortunate truth is that travel is actually pretty dang expensive when you consider the cost of transportation, lodging, and meals. Luckily, though, whether you hope to see the world someday or just want to take your family on an annual beach vacation, the right travel rewards credit card can help you get there.
Some credit cards offer travel rewards, which can provide a number of great benefits to occasional and frequent travelers alike. These benefits include things like travel credits, trip protection, points and airline miles, and complimentary upgrade status.
Each travel credit card offers its own mix of perks. Finding the right one for you is as simple as determining your travel priorities and calculating the benefit that each card can provide to you personally.
“Of course, travel reward (or credit card rewards of any kind) are really only valuable if you pay your bill off every month. If you don't then interest charges likely offset any value the rewards offer.
Why you want a travel rewards credit card
No matter how frequently — or infrequently — you venture away from home, a travel rewards credit card can be quite lucrative.
With many cards, you can earn travel rewards in the form of points or miles on your everyday spending. This means that every time you buy groceries, put gas in your car, or take your family out for dinner, you’re earning rewards that can be redeemed toward travel expenses.
Some cards offer annual travel credits that cardholders can use toward things like checked baggage fees, airline incidentals (like WiFi and purchased meals), taxi fares, airfare, and hotel stays. So even if you don’t get away often, this credit can be used to cover certain expenses when you do travel.
Certain cards come with built-in travel protections, such as trip delay and/or cancellation coverage. This protects you much like travel insurance does, so if your trip is affected by something like illness or weather, you can recoup some of your non-refundable expenses. Many of these cards will even compensate you for clothing, toiletries, and phone chargers if your luggage is temporarily lost by an airline.
Other cards offer premium perks such as Priority Pass Select memberships (which gets you access to airport lounges), upgraded status with rental car and hotel brands, and travel concierge services. These sorts of benefits make it easier, and more comfortable, anytime you travel, whether it’s once a month or once a year.
When to consider a different card
Of course, not all travel credit cards are created equal. And not all of them will be the right choice for you.
When determining if you are choosing the right travel rewards credit card, there are a few things you want to keep in mind:
- If the card offers points, miles, or cashback on purchases, do these align with your typical spending patterns?
- Does the card charge an annual fee? If so, can you recoup that annual fee between its rewards and benefits?
- If the card is associated with a specific brand (hotel or airline), are the benefits aligned with your usual travel plans or are they too limiting?
- Does the card have an introductory bonus offer and, if so, can you meet any minimum spending requirement in order to earn it?
It’s wise to reevaluate your credit card(s) each year, too, especially if your spending habits, travel plans, or needs change over time. If you find that the card is no longer as beneficial as it could be — or no longer worth its annual fee — consider switching.
Should I have a travel rewards credit card?
There are many great reasons to consider adding a travel rewards card to your wallet, even if you aren’t a seasoned or frequent traveler.
First, there are the excellent rewards that many of these cards offer on your everyday spending. You can snag benefits such as trip protection and rental car insurance, allowing you to forgo those optional expenses when you book. And with features like travel credits and brand upgrades, you can save yourself money every time you embark on a new journey.
Be sure to read the fine print before choosing a new travel rewards card, and analyze your current habits to ensure that you pick the right card for you. Then, think of all the great ways that you can use your new benefits to see the world.
–By Stephanie Colestock