Travel Credit Cards FAQ
If you’re in the market for a travel credit card but haven’t pulled the trigger yet, you probably have several important questions you need answered first. We created this travel credit card FAQ to answer all your burning questions as you search for the right travel credit card.
- Are travel credit cards worth it? Whether you find travel rewards cards worth your time or not depends on how frequently you travel. Your ability to pay off the balance on a monthly basis and whether you can afford to charge your trip to qualify for the rewards are also key factors. Using your travel rewards card to facilitate the bulk of your purchases helps you earn miles quicker. Some cards also grant a bonus when you redeem those rewards for travel.
- Do travel credit cards have foreign transaction fees? Some travel credit cards might come with foreign transaction fees. This means that if you were to use one of these cards, you could get hit with a fee on any souvenirs you purchase abroad. However, some travel credit cards – Chase Sapphire Preferred® Card, for example – waive this fee. It’s wise to contact your travel credit card provider before you go and make any purchases abroad. The last thing you want to do is sample the local cuisine only to have a foreign transaction fee spoil the mood.
- Are travel credit cards good for business travel? For the most part, travel credit cards can make a welcome addition to any business travelers wallet. Take the Capital One® Spark® Miles for Business as a prime example. Earn 50,000 bonus miles when you spend $5,000 in the first 3 months and earn 150,000 bonus miles when you spend $50,000 in the first 6 months of your account opening.
- How do travel credit cards work? In a nutshell, travel credit cards allow you to earn points, rewards, or miles on your travel-related expenses. Some credit cards – like the Capital One® VentureOne® Rewards Credit Card – fall into the fixed value category where each mile is worth 1 cent toward travel. Other cards feature a transferrable pool of points where you can use them in a partner program.
- How do you know if a travel credit card is right for you? If you travel frequently, you aren’t brand-loyal (or like to keep your options open), and you can pay off travel-related expenses in full and on time each month, then one of the best travel credit cards could help you save money and earn rewards on your next trip!
- Do you need additional travel insurance? Although it’s easy to brush off travel insurance as an unnecessary expense, you should always give it a second look. With all the upheavals that can unravel your travel plans, not to mention your own personal health, you might be wise to purchase a simple travel insurance plan — or at least pay for your trip with a credit card that offers this benefit for free. Your best option might be a combination: buying a travel insurance policy that supplements the coverage provided by your credit card and fills in the gaps.
- Which travel credit cards have the best rewards? If you’re looking for a travel credit card with the best rewards on the market, a great place to start is our in-depth rundown. However, there are lots of options to consider and, at the end of the day, it all boils down to what you want. What are you looking for? Free travel? Free hotel stays? Easy signup bonus requirements? In addition to our reviews, we have also put together this handy travel credit cards directory to help you find the best card for your needs.
- What is the best travel credit card for earning miles? Ultimately, this is a matter of opinion as well as your own personal preference. In general, the most ideal travel credit card for earning miles would be the one that best complements your spending habits. For example, if you’re the type of person who uses their credit card on everything, you’d want a travel card that rewards all of that spending. In this case, I’d tell you that the Capital One® Venture® Rewards Credit Card was a great place to start. The Capital One® Venture® Rewards Credit Card offers 2x miles for every dollar you spend. That can add up quickly if you’re using the card for groceries, gas, etc. Furthermore, it has a signup bonus of 50,000 miles when you spend $3,000 in purchases in the first three months. Again, not a terribly difficult threshold to hit if you use your travel credit card for everyday purchases.
How to Choose the Best Travel Credit Card
Finding the best card for travel miles or hotel points isn’t an exact science, but there are steps you can take to make sure you wind up with the ideal card for your needs and lifestyle. The following instructions can help you determine which travel credit cards might help you earn more points and miles over time, as well as which might work best for you when you go to redeem your points for the vacation you’ve been dreaming of.
Step 1: Determine the type of travel you want to book.
The first factor to consider when choosing a travel credit card is the type of rewards you want to earn most. Do you fly a lot and hope to earn airline miles, or do you prefer taking trips within driving distance? If you fly often or simply wish you could, a co-branded airline credit card or flexible card that lets you transfer points to frequent flyer programs might work best. If you are more inclined to choose destinations you can drive to, on the other hand, you may want to choose a hotel credit card or a flexible card that lets you redeem points for hotel stays.
Before you choose a travel card, it’s smart to think over the type of trips you hope to book and the rewards points you need to make them happen. That way, you don’t wind up with points you can’t use.
Step 2: Figure out which airlines and hotel brands you utilize most.
Once you’ve thought about the type of travel you hope to book with rewards, it’s important to narrow down your choices even more. After all, different frequent flyer programs work better than others depending on where you live. The same is true for hotel loyalty programs since each hotel brand has hotels in some parts of the world and not others.
To figure out which airline and hotel programs to focus on, take the time to do some basic searching online. Explore hotel websites like IHG.com, Marriott.com, and Hyatt.com to see which hotel brands offer properties you actually want to stay in, and play around with airline websites to see which ones fly to your dream destinations.
You will probably find that some programs will work better for you than others, but you’ll never know if you don’t check.
Step 3: Consider earning flexible rewards.
If you’re on the fence about where you want to travel or the type of rewards you want to earn, you can also sign up for a flexible travel credit card instead of one that is co-branded with a specific airline or hotel chain. Flexible travel credit cards that let you earn Chase Ultimate Rewards points or American Express Membership Rewards points let you transfer points to an array of hotel and airline programs, meaning you can decide how to redeem your points after you earn them. You can also opt for a card that doles out flexible travel credit you can redeem for any type of travel at a rate of one cent per point.
Step 4: Look for a big signup bonus.
Another factor to consider is the signup bonus you’ll earn. Keep in mind that many travel rewards credit cards offer 50,000 points or more if you can meet a minimum spending requirement within the first few months of account opening. Earning a signup bonus can help you boost your initial rush of rewards and get closer to having enough points for your dream trip sooner, so make sure to compare signup bonuses before picking a travel card.
Step 5: Consider annual fees, foreign transaction fees, and other fees.
Some travel credit cards charge annual fees, although many waive their fee for the first year. While paying an annual fee can be well worth it, you should make sure you’re comfortable with any fees ahead of time to avoid an unwelcome surprise. If you travel internationally, you’ll probably want to make sure you pick a travel credit card without any foreign transaction fees as well. By choosing a travel rewards card without foreign transaction fees, you won’t have to pay an extra 3% or more when you use your card to make purchases abroad.
Step 6: Make sure to compare travel perks.
Also note that some travel credit cards offer special perks like airport lounge access and annual travel credits. Some of the best travel credit cards even offer comprehensive travel insurance coverage such as primary auto rental insurance, trip cancellation/interruption insurance, travel accident insurance, and baggage delay reimbursement. Make sure to compare cards in terms of their travel perks to ensure you wind up with a card that offer benefits that make travel more comfortable and hassle-free.
Tips for Making the Most of Your Travel Credit Card
Once you’ve finally decided on a travel credit card, it’s smart to look for ways to maximize your efforts. These tips can help you earn more points and miles over time, avoid the pitfalls of credit cards, and get more bang for your buck.
- Use your card for all your regular spending and bills. The best way to earn more points and miles over time is making sure you’re using your travel points credit card for all your regular purchases and recurring bills. Make sure to use your rewards card for groceries, gas, utility bills, holiday shopping, college tuition, and any other bills that let you pay with credit without a fee.
- Use shopping portals when you buy items online. Some travel credit cards have shopping portals that let you earn more points any time you make a purchase at a participating store. Examples include Southwest Rapid Rewards shopping, Chase Ultimate Rewards Shopping, and American AAdvantage Shopping. By using a shopping portal whenever you shop online, you can rack up more points without any effort.
- Make sure to spend enough to earn the initial signup bonus. If your travel credit card offers an initial signup bonus, make sure to plan carefully so you meet your card’s minimum spending requirement by the listed date. If you miss the spending requirement by even a dollar or by a single day, you will miss out on your signup bonus altogether. Credit card issuers rarely make exceptions on their deadlines for signup bonuses, so don’t leave anything to chance.
- Pay your balance in full every month. If you’re pursuing credit card rewards, you have to make sure you’re not carrying a balance from month to month. If you do carry a balance at the average interest rate for credit cards (which is now over 17%), the interest you’re paying is wiping out any rewards you earn each month. Make sure to pay your credit card balance in full every month so you can avoid credit card interest and long-term debt.
- Book travel with rewards early when you can. Because hotel and airline loyalty programs sometimes limit award availability, it’s crucial to plan award travel early. Start planning at least six months out for flights and hotels you plan to book with points and miles, and you’ll find more availability and dates to choose from.