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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. Travel and dining purchases earn 2x Ultimate Rewards points per $1. Cardholders also earn 5x points on Lyft rides through March 2022. Through April 30, 2021, cardholders automatically earn 2x points per $1 spent at grocery stores, up to $1,000 per month.
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.
Additional Chase Sapphire Preferred benefits include unlimited deliveries with no delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with a DoorDash DashPass subscription. Activate your card by December 31, 2021.
Plus, cardholders can earn up to $60 in statement credits on Peloton Digital and All-Access Memberships through December 31, 2021. Points are worth 25% more now through April 30, 2021, when redeemed for statement credits against existing purchases in select, rotating categories with the Chase Pay Yourself Back feature. Points are also worth 25% more when redeemed through the new Chase Dining hub in Ultimate Rewards, now through April 30, 2021.
New Chase Sapphire Preferred® Card cardholders can earn 80,000 bonus points after spending $4,000 on purchases in the first 3 months from account opening, worth $1,000 when you redeem through Chase Ultimate Rewards®. Plus, they can earn up to $50 in statement credits towards grocery store purchases within the first year of account opening.
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. 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.
New Capital One Venture Rewards Credit Card cardholders can earn 100,000 bonus miles after spending $20,000 on purchases in the first 12 months from account opening, or earn 50,000 miles after spending $3,000 on purchases in the first 3 months.
Learn more: Travel Rewards Credit Cards
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.
Card perks include:
- Earn 4x points on dining, including eligible takeout and delivery, plus 4x points on Uber Eats
- 4x points at U.S. supermarkets (on the first $25,000 per year, then 1x points)
- 3x points on flights booked directly with the airline or on AmexTravel.com
- 1x points for non-bonus purchases
- $100 onsite credit for The Hotel Collection from American Express
- 1:1 airline and hotel point transfers
- Terms apply
$120 Dining Credit
You get an annual $120 dining credit that Amex splits into a $10 monthly statement credit. This credit is redeemable at these merchants:
- The Cheesecake Factory
- Ruth’s Chris Steak House
- Shake Shack (only at participating locations)
Enrollment is required.
Learn more: Johnny Jet Recommended Credit Cards
American Express® Gold Card cardholders can also get up to $120 in Uber Cash annually. Plus, you’ll earn 4x Membership Rewards® points for each Uber Eats purchase on your card. To use this perk, add your card to your Uber account, and you’ll automatically get $10 in Uber Cash each month in your Uber account for U.S. Uber Eats orders, or U.S. Uber rides. Any unused Uber Cash expires at the end of each month (it does not roll over to the next month).
Cardholders also get up to 12 complimentary months of Eats Pass when you subscribe with your American Express Gold Card. That’s a value of up to $119 annually (based on the $9.99 monthly price over 12 months). With the Uber Eats Pass, you can get unlimited $0 Delivery Fees and 5% off orders over $15 at eligible restaurants. Note that taxes and service fees may apply and do not count toward the order minimum.
This benefit applies only in the U.S. on U.S. orders at eligible restaurants and on eligible restaurant purchases.
Enrollment is required by 12/31/2021. After that, the Uber Eats Pass will begin auto-billing 12 months after your enrollment in this offer, at the then-current monthly price. Learn more about the Uber Eats partnership for more information.
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. Flights booked directly from the airline or at AmexTravel.com earn 5x Membership Rewards (up to $500,000 in purchases per calendar year).
Prepaid hotels booked with American Express Travel earn unlimited 5x points. All non-bonus purchases earn 1x points.
The real value of this card is in the additional benefits as this is a premium card:
- 1:1 point transfers
- Annual $200 airline fee credit (enrollment required)
- Up to $200 annual Uber rides and eats credits (terms apply)
- Airport lounge access (includes Centurion, Priority Pass (enrollment required), and Delta Sky Club)
- Hilton Honors Gold status (enrollment required)
- Marriott Bonvoy Gold Elite status (enrollment required)
- Terms apply
Like these perks? The annual fee is $550 (See Rates & Fees). But, considering all the premium perks, this fee can be offset.
The welcome bonus is the ability to earn 75,000 bonus Membership Rewards ($750 value) when you spend $5,000 in purchases during the first 6 months. You can also earn 10x Membership Rewards on eligible purchases at U.S. gas stations and U.S. supermarkets for the first 6 months (up to $15,000 in combined purchases, and then 1 point per $1). Terms apply.
Related: American Express Platinum Review
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.
Chase Sapphire Preferred® Card
- Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 when you redeem through Chase Ultimate Rewards®. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening.
- Earn 2X points on dining including eligible delivery services, takeout and dining out and travel. Plus, earn 1 point per dollar spent on all other purchases.
- Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards®. For example, 80,000 points are worth $1,000 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.
- Get unlimited deliveries with a $0 delivery fee and reduced service fees on eligible orders over $12 for a minimum of one year with DashPass, DoorDash's subscription service. Activate by 12/31/21.
- Count on Trip Cancellation/Interruption Insurance, Auto Rental Collision Damage Waiver, Lost Luggage Insurance and more.
- Get up to $60 back on an eligible Peloton Digital or All-Access Membership through 12/31/2021, and get full access to their workout library through the Peloton app, including cardio, running, strength, yoga, and more. Take classes using a phone, tablet, or TV. No fitness equipment is required.
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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.