How to Pick the Best Travel Credit Card in 5 Easy Steps
October 24, 2018
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Whether you traveling for pleasure or business, a good travel credit card can make your life much easier. You can earn cash back rewards, receive bonus offers, get access to airport lounges, and even get rental car coverage.
However, there are dozens of travel rewards credit cards out there. Deciding between them can be difficult, especially if you don’t know where to start. If you’re stuck, use these five steps to help you find the best credit card for your situation.
1. Decide if you want an airline-specific card or general travel rewards
There are two main types of travel rewards cards: branded and general. Branded cards are affiliated with specific airlines or hotel chains. They frequently offer generous bonus points and rewards if you regularly use the card’s brand for your travel needs, but offer less value if you’re not dedicated to just one airline or hotel. They make the most sense for brand loyalists.
For example, if you prefer to fly on Southwest, the Southwest Rapid Rewards® Priority Credit Card is an excellent choice. You can earn 2 points per $1 spent on Southwest® purchases and Rapid Rewards® hotel and car rental partner purchases.
General travel rewards card offer rewards points on travel on different airlines and hotels, not just one company. You might earn fewer points than you would with an airline-specific card, but general cards are a smart option for price-conscious consumers who like to comparison shop and who aren’t devoted to one brand.
2. Look for high rewards on routine purchases
You can earn a significant amount of money in the form of cash back rewards. Over the course of a year, you could earn hundreds from just using your card for routine purchases.
Look for cards who offer more than one percent cash back. If you have good credit, 1.5%-2% points per dollar is common. And with some cards, like the Discover it® Cash Back, you can get up to 5% cash back at different places each quarter like gas stations, grocery stores, restaurants, Amazon.com and more up to the quarterly maximum, each time you activate.
3. Shop around for a high signup bonus
If you’re willing to do some comparison shopping, you could snag a generous signup bonus. With good credit, you could get approved for a new card and receive hundreds as a reward.
For example, the Chase Sapphire Preferred® Card card gives you 50,000 points if you spend $4,000 within the first three months of opening the card. According to Chase, that’s a $625 value, which you can redeem for flights, hotel stays, gift cards, or as a statement credit.
Some other cards offer much smaller bonuses, so it might be worth shopping around or waiting until your credit score improves before applying for a new card.
4. Compare travel benefits and protections
Your credit card can provide you with valuable benefits and protections, especially when you travel. Some credit cards give you access to airport lounges, which can be a relief on a busy day. Others can help you if your luggage gets lost, if your trip is delayed or canceled, and even if there’s an emergency overseas.
For example, the Chase Sapphire Reserve® card offers auto rental collision damage coverage. It’s primary coverage — which is rare for credit card-offered insurance — and provides reimbursement for up to $75,000 for theft and collision damage for rental cars in the United States.
5. Consider the annual fee
While not all credit cards charge an annual fee, many travel rewards cards do. In some cases, the annual fee can be hundreds of dollars. If that’s the case, it’s important to keep in mind how much you’d have to spend to earn enough rewards to offset the annual fee. You’ll likely need to spend thousands to make it worthwhile.
If you only use the card sparingly, or for emergencies, you likely won’t get enough rewards to make the annual fee worth it. Going for a no-fee card such as the Chase Freedom Unlimited® card is likely a better option for you.
However, if you travel frequently or heavily rely on plastic, you should be able to earn enough rewards to make the annual fee a non-issue.
Choosing a credit card
Choosing a new travel rewards credit card can feel overwhelming. However, by keeping these five key factors in mind, you can select a card that works for you and your lifestyle.
Looking for a new credit card? Check out our favorite travel rewards cards.