Starting to pick up a travel credit card might be the right decision if you want to save money and travel easily, so you need to do the legwork to find the right card for your needs. There are several varieties of travel credit cards that accommodate various incentives and personal interests, and some are far more versatile than others.
Here are the key types of cards you're going to run into:
When you start comparing travel cards, there are many aspects to consider — some of which are entirely shaped by your type of spending and travel goals. Here's what you need to do to choose the perfect card for you:
Potential earnings
Every travel credit card has its earning mechanism. Any versatile travel cards offer the same incentive rate for every dollar you spend — maybe 1.5 or 2 points or 1 mile per dollar you charge — though some are more competitive for travel expenses or other unique spending categories like dining, shopping, or petrol.
Cards that are partnered with a particular hotel or airline (such as American Airlines, Marriott Bonvoy, or Hilton Honors) tend to offer a higher level of benefits when you spend within their brands, and the choice is broad. You could see 2, 6, or 14 miles or points for every $1 invested.
When you compare, remember how far you drive and where you spend the majority of your monthly budget.
Options for redemption
Each travel card has rules for how you can spend your points or miles, and the amount of those incentives varies a lot, depending on the card and how you redeem it.
For example, Balance Miles editors on American Airlines Advantage Cards at 2.26 cents apiece when redeemed for American or partner airline fares, compared to just 1.54 cents per mile received on Delta SkyMiles Cards.
It would help if you also understood how important versatility is to you. On the Chase Sapphire Preferred Passport, for example, points redeemed through the Chase Ultimate Loyalty platform are not worth quite as much as AAdvantage miles, but you can use your points on a broader spectrum of airlines and still have a decent value of 1.46 cents.
Annual charges
Most travel cards charge an annual fee, and you can make sure that you can recover more than you can from the discounts and rewards you get. Annual payments start at about $95 and can be more than $500.
On higher-end cards, you may have free admission to airport lounges, cancellation of your checked luggage fee, or refund of your TSA PreCheck enrolment or other airline fees. Airport lounge membership alone would otherwise cost hundreds of dollars, but the card fee can be worth it if you fly enough to make your priority more convenient.
The Perks of traveling
You can get a card with many travel incentives, tiny, or anywhere in between. Make sure that you know which ones are important to you. In addition to airport lounge passes, checked baggage allowance, and Global Entry / TSA PreCheck rebate, you can find free hotel nights, complimentary airline tickets for your partner, preferential boarding on planes, or insurance coverage if your luggage is misplaced or your travel is shortened. Again, higher-value cards tend to come with higher annual costs.
Bonuses
Many cards give a complementary incentive to prospective consumers who fulfill the minimum purchase criteria in the first three months. Any bonuses can potentially be worth a few hundred bucks, so make sure you can satisfy the expense criteria without needing to balance your card. Interest charges are a fast way to eliminate the financial advantage of a travel card.
International Exchange charges
Any travel cards incur international transaction fees — somewhere about 3% of each purchase — when you use a foreign passport. Many cards don't, though, but if you're going to fly outside the U.S. (or otherwise spend a lot for an overseas merchant), make sure your card doesn't incur this tax. It will quickly cancel any miles or points you receive.
International approval
Few credit cards are not commonly recognized globally, but if you're a globetrotter, make sure you can use the card everywhere you go. For example, Discover cards are not accepted at all in areas of South America, the Middle East, and Africa and can only be accepted rarely in other chosen areas.