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If you fly or stay at a hotel, you likely remember seeing an advertisement for the carrier’s co-brand travel credit card. Travel points can be more valuable than cash rewards if you like to travel. But, there are several factors to consider before you get a travel credit card. If you aren’t sure if it’s worth getting a travel credit card, this post is for you.
Terms apply to American Express benefits and offers. Visit americanexpress.com to learn more.
Is It Worth It To Get A Travel Credit Card?
1. Travel Credit Card Benefits
Each travel credit card offers different perks. The points you earn on purchases are usually more valuable for award travel than cash rewards or gift cards.
Travel credit cards with an annual fee may also offer additional travel benefits. Cards with higher annual fees, like premium travel credit cards, tend to provide more benefits.
There are three different types of travel credit cards.
Airline Credit Cards
Co-brand airline credit cards let you earn frequent flyer miles on purchases. You may also get these perks:
- Free checked bags
- In-flight purchase discounts
- Airport lounge access
- Priority boarding
- WiFi credits
Enrollment may be required.
Hotel Credit Cards
Co-brand hotel credit cards earn hotel loyalty points on purchases and usually offer upgraded loyalty status. Some cards also offer free anniversary nights and on-site amenity credits.
Enrollment may be required.
Flexible Travel Credit Cards
Most flexible travel credit cards won’t have as many additional perks as branded airline or hotel credit cards. But you can have an easier time redeeming credit card points for travel purchases.
This card type can be better when you’re not loyal to a specific airline or hotel. You can also earn bonus points whether you book travel directly from a carrier (ex. Southwest, Hilton, Airbnb) or a third-party booking site (i.e., Expedia, Hotwire).
These cards don’t offer airline or hotel-specific perks but can offer complimentary travel insurance benefits. A few cards with an approximate $95 annual fee reimburse the application fee for Global Entry or TSA PreCheck for one applicant.
Premium travel credit cards can offer airport lounge access, but you usually will need to pay a minimum $450 annual fee.
2. Reasons to Get a Travel Credit Card
Here are some of the reasons to get a travel credit card.
Travel Points Can Be More Valuable Than Cash
Cash rewards credit cards make it easier to redeem your rewards. You might be able to request a monthly statement credit to minimize your statement balance, for instance.
However, most cash rewards have a 1 cent redemption value. And, you may not be able to earn as many points on purchases.
Travel credit cards can earn more on your big purchases or most common expenses. The redemption value can be at least 1 cent per point or more. Award flights tend to have the highest redemption values.
Can Redeem Travel Points Regularly
It’s a good practice only to use credit cards to easily redeem your points regularly.
Credit card rewards programs and travel loyalty programs can change their redemption prices or redemption options with minimum notice.
Just like the price of groceries or a gallon of gas costs more than in the past because of inflation, an award flight or reward night can require more points. Using a card that lets you redeem your points for at least one trip a year can help you avoid point devaluations and getting stuck with a mountain of points.
Additional Travel Benefits
Cards that offer extra travel perks like free checked bags, travel fee credits, or on-site amenities can help you save money and get a better quality stay.
You will need to decide if the value of these benefits is worth more than the annual fee.
Valuable Signup Bonus
Travel cards tend to have more valuable signup bonuses than cash rewards cards. These bonuses are useful if you can redeem the extra travel miles.
No Foreign Transaction Fee
Many travel credit cards no longer charge a foreign transaction fee, making them a great option for international travel. A few cash rewards cards waive this fee. However, the fee is up to 3% for many.
3. When to Avoid Travel Credit Cards
A travel credit card isn’t always a great option, even if you love to travel.
Most travel credit cards charge an annual fee of at least $95, while many cash back cards don’t have an annual fee. The point redemptions and additional benefits will need to be more valuable than the annual fee.
Several no annual fee travel credit cards may fit your travel needs.
Otherwise, using a cash back credit card and requesting a cash statement credit is the better option.
Restrictive Redemption Options
Co-brand travel credit cards only let you redeem your travel rewards with that specific airline or hotel.
A general travel credit card has more flexibility. You may be able to redeem your points for recent travel purchases as a travel statement credit or booking upcoming travel.
However, if you’re not traveling soon and want to burn your points, the redemption value for cash rewards is usually lower.
Cannot Earn the Signup Bonus
The signup bonus for travel cards can be larger than cash credit cards, but you may need to spend as much as $5,000 in the first 3 months instead of $500 in the first 3 months.
A signup bonus shouldn’t be the only reason to apply for a new credit card, but you should apply for cards with a minimum spend you can achieve.
Are Travel Credit Cards Worth It?
Best Travel Credit Cards
There are plenty of high-quality travel credit cards to choose from. Below are some of our favorites, as they make it easy to earn and redeem points.
Their additional benefits can add extra value too. None of these cards charge a foreign transaction fee.
Chase Sapphire Preferred Card
The Chase Sapphire Preferred® Card can be the best travel credit card for domestic travel.
Also, enjoy Chase Sapphire 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.
Each point is worth 25% more when redeemed for award travel booked on the Chase Ultimate Rewards travel portal. You can also transfer your points on a 1:1 basis to airline and hotel programs, including Southwest Airlines, United, World of Hyatt, and Marriott Bonvoy.
This card also has some of the best trip protection and rental car collision damage waiver benefits for a travel card.
Points are worth 25% more now when redeemed for statement credits against existing purchases in select, rotating categories with the Chase Pay Yourself Back feature.
New Chase Sapphire Preferred® Card cardholders can earn 60,000 bonus points after spending $4,000 on purchases in the first 3 months from account opening. That’s $750 when redeemed through Chase Ultimate Rewards®.
The annual fee is $95.
Related: Chase Sapphire Preferred Review
Capital One Venture Rewards Credit Card
The Capital One Venture Rewards Credit Card earns 2x miles per $1 on all purchases. However, if you are wanting to earn a few more miles on travel, good news—earn 5x miles on hotels and rental cars booked through Capital One Travel. Plus, Venture cardholders will earn 5x miles when booking through the Turo app or on Turo.com (through May 16, 2023).
Each mile is worth 1 cent each when redeemed as a travel statement credit for recent travel purchases or booking upcoming travel. You can also transfer miles to airlines and hotels.
One additional card benefit is Global Entry or TSA PreCheck reimbursement. Cardholders can get a reimbursement of up to $100 for Global Entry or TSA PreCheck.
Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel, with the Capital One Venture Rewards Credit Card.
The annual fee is $95.
Related: Capital One Venture Card Review
American Express Gold Card
The American Express® Gold Card is a mid-premium product that maximizes travel and dining purchases. It earns 4X Membership Rewards® Points at Restaurants, plus takeout and delivery in the U.S., and earns 4X Membership Rewards® Points at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X). Plus, earn 3X Membership Rewards® Points on flights booked directly with airlines or on amextravel.com.
$120 Dining Credit
Another perk is the ability to earn up to $10 in statement credits on a monthly basis when you use your Gold Card to pay at the following dining establishments (enrollment is required):
- The Cheesecake Factory
- Milk Bar
- Shake Shack (only at participating locations)
This perk can save you up to $120 annually.
Learn more: Johnny Jet Recommended Credit Cards
The welcome bonus is the ability to can earn 60,000 Membership Rewards points after spending $4,000 on eligible purchases within the first 6 months. It’s also available with a Gold or Rose Gold card design.
The annual fee is $250 (See Rates and Fees).
Related: American Express Gold Card Review
The Platinum Card from American Express
The Platinum Card® from American Express can be a good fit for frequent flyers.
Cardholders earn 5x Membership Rewards® Points for flights booked directly with airlines or with American Express Travel, up to $500,000 on these purchases per calendar year, and earn 5x Membership Rewards® Points on prepaid hotels booked with American Express Travel.
Cardholders can get $200 back in statement credits each year on prepaid Fine Hotels + Resorts® or The Hotel Collection bookings, which requires a minimum two-night stay, through American Express Travel when paying with their Platinum Card®.
Also, get up to $200 in statement credits per calendar year in baggage fees and more at one select qualifying airline.
Plus, American Express has expanded The Centurion® Network to include 40+ Centurion Lounge and Studio locations worldwide. Now there are even more places your Platinum Card® can get you complimentary entry and exclusive perks.
Terms apply. Enrollment may be required.
Other Platinum Card from American Express Benefits
There’s also a digital entertainment credit. Cardholders can get up to $20 in statement credits each month when they pay for eligible purchases with The Platinum Card® from American Express at your choice of one or more of the following providers: Peacock, Audible, SiriusXM, and The New York Times. Enrollment required.
In addition to enjoying TSA PreCheck or Global Entry access, cardholders can also enjoy CLEAR perks. Cardholders can use their Card and get up to $189 back per year on their CLEAR® membership. Terms apply.
Another exciting benefit is the ability for cardholders to enjoy up to $25 back each month on select Equinox memberships when they pay with their Platinum Card®. This amounts to up to $300 annually. Enrollment required.
There is also a $155 Walmart+ credit to enjoy. This covers the cost of a $12.95 monthly Walmart+ membership with a statement credit after you pay for Walmart+ each month with your Platinum Card. Cost includes $12.95 plus applicable local sales tax.
Get the full details and learn more in our in-depth The Platinum Card from American Express review.
The annual fee is $695 (See Rates & Fees) but can be offset with the perks, which are valued at over $1,400.
Welcome Bonus Offer
New The Platinum Card® from American Express cardmembers can earn 80,000 Membership Rewards® points after spending $6,000 on purchases on their new Card in the first 6 months of Card Membership. Plus, they can apply and select their preferred metal Card design: classic Platinum Card®, Platinum x Kehinde Wiley, or Platinum x Julie Mehretu.
Learn more: Johnny Jet Recommended Credit Cards
Travel credit cards can be worth it if your spending habits let you earn more points than a cash rewards card. You must also be able to redeem your points for travel easily. Most travel cards have an annual fee, so you must decide if your travel and spending habits outvalue the fee.
Are travel cards a good idea?
Travel credit cards can be better than cash rewards credit cards if you can redeem the points at least once a year and use the other benefits. The total rewards value can exceed a cash rewards credit card with the same spending habits.
For example, the free checked bags perk can easily be worth more than the airline credit card’s annual fee. Or a free anniversary night can be worth more than a hotel credit card annual fee.
However, a cash rewards card can be better if you struggle to redeem the points or don’t want to pay an annual fee for a credit card. Most cash rewards cards have no annual fee. It’s hard to compete with a cash statement credit or bank account deposit.
Are travel credit cards better than cash back cards?
Travel credit cards can have more valuable rewards than cash credit cards. For example, travel points can be worth 1 cent or more, while most cash rewards are worth 1 cent each.
Travel cards can also earn more points on bonus purchases than cash cards. However, the rewards program for each card type varies.
Also, travel cards can be more likely to offer additional benefits like free checked bags, accelerated loyalty status, or amenity credits. The credit card charges an annual fee, but these perks’ redemption value can exceed the fee amount if you use them regularly.
Cash back cards with no annual fee can be better if you travel infrequently, or the annual redemption value of your points and card benefits are lower than the travel card fee.
Is it worth getting a frequent flyer credit card?
A co-brand airline card can be worth it if you want to earn frequent flyer miles for a specific airline. You must be comfortable only being able to redeem your purchase rewards for award flights with that specific airline or airline alliance.
You may also only decide to use the card enough so that the value from the additional benefits like free checked bags, preferred boarding, and in-flight purchase discounts exceed the annual fee. But you may use another card for your non-airfare spending.
If you don’t want to earn frequent flyer miles or the add-on benefits are not worth the annual fee, a flexible travel rewards card or a cash rewards card can be a better fit.
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For rates and fees of the American Express® Gold Card, please click here.
For rates and fees of The Platinum Card® from American Express, please click here.
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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.