This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Disclosure, visit this page.
After the uncertainty that came with the pandemic, you may be wondering if getting a travel credit card is worth it. If you’re planning on making several trips, having a travel credit card can help. However, many travel credit cards to choose from provide an array of rewards and benefits. Here are several factors to consider as you decide whether getting a travel credit card is worth it or if you should perhaps consider a cash rewards credit card.
Can You Easily Redeem the Travel Points?
A travel credit card can be worth it even if you only travel once a year and if you’re willing to redeem the points for that trip. However, no credit card is worth it if you can’t easily redeem the points.
The average redemption value for most cash and travel credit cards is 1 cent each. However, travel redemptions can get a higher value through travel redemption bonuses and by transferring points to an airline or hotel loyalty program.
Your award travel redemption options can include:
- Book upcoming travel: Redeem points through the credit card travel portal for forthcoming trips at a fixed redemption rate.
- Travel statement credits: Can redeem points to reimburse recent travel purchases.
- Point transfers: Can transfer points to participating airline and hotel loyalty programs. Booking directly from the carrier can help you get a better redemption value.
For example, the Chase Sapphire Preferred® Card makes each point worth 25% more for travel redemptions than cash rewards. This card also lets you transfer points at a 1:1 ratio to many airline and hotel programs. You can learn more in our detailed Chase Sapphire Preferred review.
When comparing redemption options, decide if you want the opportunity to redeem your points for multiple travel brands instead of a specific airline or hotel.
Co-brand airline and hotel credit cards require you to redeem your purchase rewards for award travel with that specific loyalty program. So, for example, earning points with an IHG credit card isn’t worth it if you stay at Marriott Bonvoy properties.
Are There Additional Travel Benefits?
Many travel credit cards offer some additional card benefits that can help reduce your out-of-pocket expenses and stress as you travel.
Additional travel benefits can include:
- Travel statement credits
- Free checked baggage (airline credit cards)
- Hotel night certificates (hotel credit cards)
- Accelerated loyalty program status
- Airport lounge access
- Travel insurance
Premium travel credit cards can offer the most benefits. However, these cards also have the highest annual fees. Therefore, you will need to decide if you can use the additional benefits. If so, are these perks worth more than the annual fee?
Avoid Expiring Travel Miles
Having a co-brand airline or hotel credit card can prevent your travel points from expiring due to account inactivity. As long as your credit card account remains in good standing, your existing points balance won’t expire for most programs.
As loyalty programs can require more points for award flights and reward nights, it’s still a good idea to redeem your points as soon as possible. Doing so helps you avoid point devaluations.
Related: Best Rewards Credit Cards
You’re Comfortable Paying an Annual Fee
Most travel credit cards charge an annual fee. However, this is how you can access enhanced redemption options and several built-in perks.
There are no annual fee travel credit cards available too. However, you may not earn as many points on purchases and have fewer card benefits.
Want a Large Signup Bonus
Travel credit cards are more likely to offer a higher signup bonus than cash back credit cards.
In most cases, new cardmember bonuses are worth between $500 and $1,000 if you can spend at least $3,000 in 3 months.
What about cash back cards? The best bonuses offer $200 cash back with a $500 minimum spending in the first 3 months.
Related: The Best Credit Card Offers
Travel credit cards are worth it if you want to earn travel miles and regularly use travel benefits. However, you will need to make sure you can get more value from the points/miles and built-in perks than the annual fee. A cash back credit card can be a better option despite these cards not being as exciting.
- Chase Freedom Unlimited vs Chase Sapphire Preferred
- Citi Custom Cash Card Review (5% Back, Signup Bonus)
- Best Credit Cards With Roadside Assistance Protection Benefits
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.
- 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.
The comments on this page are not provided, reviewed, or otherwise approved by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered. 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.
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.