Maybe it's happened to you? With the vague goal of "traveling more" — and under pressure from jet-setting friends who country-hop for free thanks to a portfolio of travel rewards credit cards — you caved and applied for your very own travel card.
With every purchase, you dreamed of an escape from real life (and, let’s be real, the chance to brag about your trip on Instagram: #blessed).
But from the start, you and your travel card didn’t mesh well. You blew your monthly budget to spend enough to earn the sign-up bonus, and you could never remember which spending categories earn more, so you used the card at the “wrong” stores. When you finally looked into how to redeem your miles, you were faced with a complicated maze of instructions, rules and dreaded blackout dates.
You dipped your toe in the murky waters of travel hacking and optimizing every single credit card rewards point — and you want out.
The months you spent trying to befriend your travel card weren’t in vain, though. There are important lessons to glean from this experience.
You don’t actually travel
Perhaps you don’t get a lot of vacation time at your job. Maybe you have young children or elderly relatives to care for, or you just don’t enjoy the hustle-bustle of taking a trip. In these cases, it’s very likely that travel rewards cards aren’t the best option for you — and that's totally fine.
“Cash-back cards — especially flat-rate cash-back cards — tend to be simpler: Just use the card as you normally would, earn cash back, and eventually log into your account and redeem your earnings.”
Instead, consider a cash-back card.
Cash-back cards tend to be much simpler to wrap your head around. Just use the card as you normally would, earn cash back, and eventually log into your account and redeem your earnings. Typically, statement credit is an option, but you may also have the option of redeeming for the most flexible and easy-to-understand reward of all: cold, hard cash.
A flat-rate cash-back card is the most effortless option; you get money back without the hassle of remembering where to use the card for the most rewards. Consider a card like the Citi® Double Cash Card – 18 month BT offer, which pays 1% cash back when you use it and another 1% when you pay your bill, for a total of 2% cash back on all purchases.
You travel but don't want to 'hack'
Avoid cards with labyrinthine rules and restrictions. To knock a few hundred dollars off of a future trip, opt for general travel rewards cards that aren’t tied to specific airlines or hotel chains.
While some cards require you to book travel through their sites and only let you redeem for the Big Three travel expenses (airfare, hotels and car rentals), other cards have a looser interpretation of “travel expenses” and don’t restrict where you book travel. This is the secret to cashing in rewards without the headache.
“Some cards require you to book through their site and only let you redeem for the Big Three (airfare, hotels and car rentals). Other cards have a looser interpretation of 'travel expenses' and don’t restrict where you book.”
The Capital One Venture Rewards Credit Card is a good option for those who are new to travel cards or want something simple. In addition to a sign-up bonus, you’ll also earn 2 miles per dollar spent on all purchases. And redeeming points is easy, thanks to its Purchase Eraser feature: Within 90 days of making a travel-related purchase, log into your account and apply points to those expenses in exchange for a statement credit. You can use points to offset airfare, hotels, car rentals, train tickets, bus fare, cruises, cabs, travel agents and time shares. You’ll pay an annual fee. Squeeze some more juice out of this card by taking advantage of a statement credit for Global Entry or TSA Precheck application.
The Capital One VentureOne Rewards Credit Card earns 1.25 miles per dollar, has no annual fee, and has a smaller sign-up bonus. But you can still use the Purchase Eraser tool and earn 10 miles per dollar on hotel.com bookings through January 2020.
You're interested in travel, but you've got more pressing priorities
Before you sign up for any kind of rewards card — travel or cash back — be aware of your financial situation.
If you have existing high-interest credit card debt or plan to make a major purchase and pay it off slowly, paying interest on a balance will reduce the value of any travel or cash-back rewards you might earn.
“If you have existing high-interest credit card debt or plan to make a major purchase and pay it off slowly, paying interest on a balance will reduce the value of any travel or cash-back rewards you might earn.”
In these cases, look into a balance transfer card or one with an introductory 0% APR, which can bring you immediate value in the form of saving on interest payments. Make sure you can fully pay down your debt before the no-interest promotional period ends, because the interest rate will shoot back up after that. (NerdWallet’s handy credit card comparison tool can help you whittle down your options.)
Once you’ve retired that debt, you may feel freer to choose the best card to help you budget your next trip.