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With an abundance of travel credit cards to choose from, it can be difficult to pick the best one for your travel habits. Your redemption options and additional travel perks can vary widely. Here is a step-by-step guide for finding the best card and how to choose a travel credit card that works for you.
Choose Travel Credit Cards That Work For Your Spending
The first decision you should make when choosing travel credit cards is to decide what type of travel miles you want to earn:
- Flexible points: Credit card points that can be redeemed for multiple airlines, hotels, and travel purchases
- Airline miles: Redeem miles for a specific airline like Southwest Airlines or Delta Air Lines
- Hotel points: Earn points for a specific hotel loyalty program like IHG or Marriott Bonvoy
Co-branded travel credit cards that earn travel miles for a specific airlines or hotel programs are more likely to offer add-on perks like free checked bags or upgraded loyalty status when you travel with that particular brand. If you are loyal to that brand and use it often, having a co-branded credit card may be worth it.
What Are Credit Card Bonus Categories?
Rewards credit cards either earn a fixed number of points on each dollar you spend. Or, they can have a tiered rewards program that earns bonus miles on certain purchase categories.
Some of the most common bonus categories include:
You can expect to earn 1 point per $1 on all non-bonus purchases.
If you’re largest monthly purchases don’t nicely fit into one of the above categories, consider getting a card that emphasizes earning bonus points on everyday spending.
It’s important to pay attention to which travel purchases earn bonus points/miles as not every card awards the bonus amount on just any travel reservation. For example, some cards only give bonus points if you book flights directly from the airline.
Branded airline and hotel credit cards are likely to only award bonus points on travel purchases for that specific travel brand.
What Are Your Travel Redemption Options?
How easily you can redeem your credit card points and getting the highest redemption value can be one of the most important factors. After all, what the point of earning lots of miles if you can’t use them?
On average, most credit card points/miles are worth 1 cent each for award travel redemptions. Airline miles can be worth more if you pick the best flights.
Unfortunately, hotel points are usually only worth between 0.5 and 1.0 cents each. One notable exception is World of Hyatt points that are almost always worth at least 1 cent each.
See if your favorite travel credit cards offer these travel redemption options:
- Future award trips: Most cards offer a booking portal to redeem points for upcoming trips.
- Travel statement credits: Some cards reimburse recent travel purchases for the same value as booking future award trips.
- Point transfers: Can transfer points to participating airlines and hotels, usually at a 1:1 ratio, to book trips directly through the travel brand.
Also see if the card offers a redemption bonus on certain bookings. For example, each point is worth 25% more for award travel bookings with the Chase Sapphire Preferred® Card than competing cards. This card also lets you transfer points at a 1:1 ratio to over a dozen airlines and hotels including Southwest Airlines, United Airlines, and World of Hyatt.
Are There Additional Card Benefits?
Travel credit cards are more likely to offer additional travel and purchase benefits than cash back credit cards.
Some cards only offer the built-in benefits that Visa or Mastercard offer like secondary rental car insurance or basic trip protection coverage.
Banks may “sweeten the pot” by adding these additional benefits:
- Global Entry or TSA PreCheck application fee credit
- CLEAR application fee credit
- Travel statement credits
- On-site hotel discounts and free night certificates
- Upgraded airline or hotel loyalty status
- Extensive travel insurance benefits
Premium travel credit cards like the Chase Sapphire Reserve® and The Platinum Card® from American Express are two of the most benefit-rich cards. These add-on benefits can easily help you save a ton of money and also improve your travel experience. But you must make sure the benefit values are worth the annual fee.
Is the Credit Card Annual Fee Worth It?
Most travel credit cards charge an annual fee as a tradeoff for offering flexible redemption options and add-on card benefits.
“Consumer” travel credit cards usually have a fee between $50 and $200 per year. These cards are best for earning and redeeming points.
Common additional benefits are Global Entry/TSA PreCheck fee credits and travel insurance with flexible rewards cards. Co-brand cards will offer loyalty program perks including accelerated loyalty status and incidental fee waivers on carrier-provided travel.
“Premium” credit cards have an annual fee between $250 and $700. These cards have a high initial fee but offer lots of benefits including travel statement credits and airport lounge access.
There are a few no annual fee travel credit cards. These cards have smaller purchase rewards and fewer benefits. However, they can be a better option if you travel infrequently or only want a co-brand card to make periodic purchases to prevent your travel miles from expiring.
Is There A Signup/Welcome Bonus?
One of the most exciting perks of a travel credit card is the signup bonus. Travel card offers are almost always higher than cash rewards card offers but the minimum spending is higher.
One of the best bonuses to consider is the Chase Sapphire Preferred® Card’s offer for 100,000 Ultimate Rewards worth $1,250 in travel rewards. You only need to spend $4,000 in the first 3 months to get the bonus.
The signup bonus can be the deciding factor if you’re stuck between several cards with similar perks.
Before trying for a signup bonus, consider these factors:
- Do you qualify for the bonus offer? Note that previous cardholders and applicants that have a related card from the same bank may not qualify.
- Can you achieve the spending requirements?
- Are you able to easily redeem the points for a good value?
- Is this a limited-time bonus offer? Some cards offer limited time bonuses throughout the year. Consider timing your application to get a better offer if you don’t need a credit card now. One example is when the Southwest credit cards have major bonuses that get you closer to a Companion Pass.
Do I Have a Qualifying Credit Score?
The final question to ask is if you have a sufficient credit score. Most consumer credit cards require a minimum 670 credit score (preferable 720 or above).
Premium credit cards may need a 740+ credit score in the excellent score range to get instant approval.
Each bank has its own application guidelines as well. For example, you shouldn’t try for a Chase credit card if you have opened 5 or more credit cards in the last 24 months.
An easy way to see which cards you have the best approval odds for is by using the CardMatch™ tool. This service is free and shows you the best offers you pre-qualify for and doesn’t hurt your credit score.
There are several factors to consider when you are deciding to choose travel credit cards that work for you. Look past the initial signup or welcome bonus and decide if the travel points and any additional travel perks are worth it. Then, decide if these benefits are worth more than the annual fee and the current cards in your wallet.
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Chase Sapphire Preferred® Card
- Our best offer ever! Earn 100,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,250 when you redeem through Chase Ultimate Rewards®.
- Enjoy new benefits such as a $50 annual Ultimate Rewards Hotel Credit, 5X points on travel purchased through Chase Ultimate Rewards®, 3X points on dining and 2X points on all other travel purchases, plus more.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 100,000 points are worth $1,250 toward travel.
- With Pay Yourself Back℠, your points are worth 25% more during the current offer when you redeem them for statement credits against existing purchases in select, rotating categories.
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Editorial Note: The editorial content on this page is not provided by any bank, credit card issuer, airlines or hotel chain, and has not been reviewed, approved or otherwise endorsed by any of these entities.