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Choosing a Travel Credit Card?

Oct. 27, 2014
Credit Cards, Travel Credit Cards
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So you travel a lot, and you’re looking for a more specialized credit card than your typical rewards or cash-back card. Great! Travel cards can earn you miles or hotel points, and a few other perks besides. But how do you get started looking for a credit card? We’ll walk you through how to evaluate and, eventually, pick the best travel card for you.

Step 1: Which fees matter when choosing a travel credit card?

There are two main fees to look at when you’re considering a travel credit card. First, the annual fee. Typically, the travel credit cards that have an annual charge offer the best sign-up bonuses and rewards rates. Because of this, cards are often well worth the annual fee. However, if you really don’t like paying annual fees, you can still find a number of solid no-fee travel cards.

The second fee to pay attention to is the foreign transaction fee. When you travel abroad, many credit cards levy a 1-3% charge on every dollar you spend. A good travel credit card will waive this fee. While paying an annual fee depends on your personal preferences and spending patterns, any card you consider should definitely have no foreign transaction fee.

MORE>> How to Pick the Best Credit Card for You: 4 Easy Steps

Step 2: Breadth or depth?

After annual fees, the next big division in travel credit cards is between general travel cards and airline- or hotel-specific ones. General travel cards, like the Chase Sapphire Preferred® Card either earn rewards on all travel spending or allow you to redeem for all (or most) travel expenses. The Chase Sapphire Preferred® Card, for example, earns 2 points per $1 on travel and dining – no matter which hotel or airline you use.

Typically, general cards are preferable if you:

  • Want the cheapest flight or stay rather than sticking with one airline or hotel
  • Use online travel agencies (OTA’s) like Orbitz to make your bookings
  • Don’t usually check your bags on airlines
  • Don’t stay enough nights at a single hotel to make elite status worthwhile

On the other hand, you have airline- or hotel-branded credit cards. These cards usually earn bonus miles only on that specific airline or hotel, and your best redemption options are almost always nights or flights. But in exchange, the cards will usually give you a variety of perks, like waived checked-bag fees or hotel elite status. Airline credit cards are particularly attractive if they will help you avoid bag fees, while hotel cards are great for perks like early check-in and late check-out or automatic elite status. If you’re a loyal traveler, you might be well rewarded.

Step 3: The bonus

Travel credit cards are known for their huge sign-up bonuses, so don’t sell yourself short. If you have your eye on a certain credit card, see how its sign-up offer stacks up against other cards’ and do a quick bit of Googling to see if it has any recurring promotions like a once-a-year 100,000-mile bonus. If you decide to go with a higher sign-up bonus, be sure your chosen card’s ongoing perks make the initial offer worthwhile.

Step 4: The decision

Ready to rack up those miles and points? Check out interactive travel credit card finder and our list of the best travel cards.


Tourist image via Shutterstock