Learn how to compare travel cards
Start with Your Requirements
When choosing a travel credit card, it’s helpful to think about how you will use the card and what you need from it.
For example, some travelers may prefer to earn the maximum number of miles or points on travel. Others may be more interested in gaining travel perks such as free lounge access or a global entry fee waiver or TSA Precheck (expedited security and customs processing).
Ultimately, your decision should reflect your reasons for obtaining a travel credit card. Some helpful points to consider include:
- How often you travel or plan to travel
- Where you book travel most frequently: within the U.S. vs. internationally
- The typical annual amount you spend on travel
- The type of perks or benefits that may be most valuable
- Whether you are interested in earning rewards and if so, whether points or miles are better
Co-Branded Travel Rewards Cards
If you’re looking for miles, you may lean toward a co-branded credit card with an airline. Co-branded credit cards are sponsored by two parties – a credit card issuer and a travel brand, most often an airline or hotel.
If the hotel partner or airline has its own loyalty travel program, you may earn additional points or miles through your membership in the loyalty program. These additional points or miles are often added to the points or miles you are already earning on purchases made with your card.
This card may be less attractive for travel if you book with other travel brands or use your card for everyday purchases.
One point to consider when thinking about a co-branded card is whether you are loyal to that specific brand or if you frequently book with competing hotels or airlines.
General Travel Rewards Cards
If you tend to book with more than one brand, you may be better off with a general travel rewards credit card that offers you points or miles on all travel purchases instead of purchases from a specific airline or hotel.
General travel cards provide flexibility. If you are unsure about your travel needs, a general travel rewards card does not limit you to air travel or hotel stays.
These cards come in all shapes and sizes, from basic and modest travel rewards cards like Discover it Miles to the premium American Express Platinum Card that offers numerous luxury perks.
Compare Travel Card Features and Benefits
Once you have determined what you need from a travel credit card, consider the specific features and benefits you would like the card to offer.
Start with the Rewards Earning System
Begin by checking the rewards earning system of the card. Will you earn a fixed number of points – for example, 2 miles for every dollar you spend on the card – or are the rewards tiered?
If the rewards are tiered, which spending categories offer more points or miles?
For example, a general travel card may give you 2 points or miles for every dollar spent on dining and travel, and one point on everything else.
Hotel rewards cards tend to give the most points for purchases made through their websites and at their properties. They may also have an additional layer of rewards for travel and dining that is higher than the base rewards rate.
Airline cards typically rely on one reward for purchases you make with them and a base rate of one point for every dollar you spend on other purchases.
Note: See if there is a cap on the number of points or miles you can earn on purchases annually and whether those rewards expire at a certain time.
Compare
Redemption Options
Next, see how you can redeem the rewards and any restrictions on redemption. Check for blackout dates (the dates when you cannot book reward flights or hotel nights) and rules for using the rewards.
For example, some general travel rewards cards offer a bonus when you redeem for travel or redeem through the card’s online travel portal. Others allow you to transfer rewards to other travel partners.
If there is a possibility for transfer, first check the transfer value. Some cards transfer points on a 1:1 basis, but not all cards do. It’s important to ensure you don’t lose any value when redeeming points or miles for travel.
The Chase Sapphire Preferred card is an example of a card that offers redeemable rewards and allows you to transfer points to travel partners.
When using your points to book travel through the Chase Ultimate Rewards portal, you get a 25% bonus on your points. You can also transfer your points to multiple travel partners on a 1:1 basis.
On the other hand, points and miles on hotel and airline cards tend to have higher value when redeemed for reward nights and flights.
Note: Look at the travel partners listed, as some travel cards may have a more extensive network of partners than others or partners that better suit you.
Look for Additional Travel Benefits
Next, compare travel credit cards to see what types of additional benefits are included. Some features you might find with a travel card include:
- Welcome bonuses
- Free checked bags
- Free lounge access
- Free hotel upgrades or free nights
- Free Wi-Fi access while traveling
- In-flight purchase credits
- TSA Precheck or Global Entry fee credits
Ideally, you should choose a travel card that offers the best mix of rewards and perks that match your travel habits and personal preferences.
If you are considering a co-branded card, carefully look at any additional benefits you may receive from the partner travel loyalty program.
For example, some hotel programs may offer free breakfast and late checkout when available to program members.
Compare Costs
Finally, as you shop around for travel credit cards, pay attention to the costs you will incur for owning the card.
Start with the annual fees. Look at what you get for what you pay. For example, a high-end travel credit card may offer features and benefits that are highly valuable, but you may face an annual fee of over $500 to possess one of these cards.
If you are going to pay an annual fee in that range, or any annual fee at all, it’s important to ensure that what you receive from the card balances out the cost of using it.
Then, compare foreign transaction fees. These fees apply to purchases made outside the U.S. While there are many travel credit cards that do not charge these fees, some do. So it’s important to be aware of what you will pay for purchases abroad if you travel frequently overseas.
Finally, look at the annual percentage rate, or APR, which represents the yearly cost of carrying a balance on your card. The higher the APR, the more costly your purchases will be if you carry a balance instead of paying the bill in full each month.
You should not carry a monthly balance on a credit card – it’s expensive. Doing so with a travel rewards card will negate any benefits you may earn.
Conclusion
Choosing the right travel rewards credit card depends on your travel preferences and daily spending habits.
Try to find the card that offers you the benefits you can take advantage of when traveling. Look for options that give you rewards in the categories where you spend money.
Finally,
Look at the amount of annual fees you will pay. It’s important to take advantage of enough reward trips, nights of stay, and privileges to make the annual fees worth paying.
Source: https://www.thebalancemoney.com/how-to-choose-a-travel-credit-card-4797771
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