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Travel Credit Cards: How to Know If They’re the Right Choice for You

Aug. 28, 2014
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Travel cards can be enticing and glamorous. Maybe you’ve spent time looking at travel cards and their amazing rewards offers, and now you think you want one. But is it the right choice for you? The decision isn’t always as easy as it looks. Here are some things to consider.

What do you value?

First ask yourself: What do you really value? If you believe cash is king, then don’t get a travel reward card. A cash-back reward card is almost always going to give you greater long-term dividends than any other card.

That’s because the true value of a mile or a point is always going to fluctuate, but cash back is cash back, and the value of cash is stable. Most cash-back cards offer a minimum of 1% back, and many offer higher return rates by spending categories such as restaurants or gas stations.

If you like stability and a reliable way to measure reward value, you can’t do better than cash-back rewards.

Cash flow issues?

If you are facing cash-flow issues but still want to find a way to go on vacation, you need to put your dreams on hold for a bit. The best solution to cash-flow issues are 0% percent introductory rate credit cards. Some of these cards will let you carry a balance for as long as 18 months without accruing a dime of interest.

I want travel — really!

OK, with those other two scenarios out of the way, now we can look at travel cards.

Here’s the hard truth: Travel cards are not as rewarding as they used to be. In days of old – or just a few years ago – you not only got a lot of bonus miles when you signed up for a card, but the rewards also were reasonably priced. With some diligence and loyalty, you could earn miles for round-trip U.S. coach fares pretty quickly. It didn’t take much to grab an upgrade on a long flight. You could even travel in style abroad, and maybe earn a week’s hotel stay in Hawaii in short order.


Many travel loyalty programs have undergone major devaluations. There are still some nice deals out there, but they aren’t as ubiquitous. The big first-class tickets or long hotel stays in luxury resorts require a lot of points and they will take a long time to accrue. In the meantime, you may even get hit with another devaluation.

If you want a travel card, you should go for one of two approaches.

Make a plan

Decide exactly where you want to go and when you think you’ll want to take that trip. Decide which program has the best way of achieving that vacation, and calculate what it will take for you to reach that goal using rewards. Take a guess at a time frame.

Get a travel card that offers a big signup bonus and get to work.

Stay flexible

If you aren’t sure about where and when you want to take a vacation, choose a program or two that offers maximum flexibility, especially in terms of transferring points to other programs.

This way, if a devaluation occurs in one program, you can transfer points to another program.

When you start thinking about a vacation, check your status on all your programs and start planning out the best route to achieve your desired reward level.

Tropical vacation image via Shutterstock.