Credit Karma Guide to Travel Rewards Credit Cards
These offers are no longer available on our site: Chase Sapphire Preferred® Card, Chase Sapphire Reserve®
If your mind is set on traveling, finding the perfect credit card to complement your whirlwind globe-trotting is important. In this guide, we’ll take a look at all your travel rewards card options and help you find one that fits your style and helps you get where you want to go.
No matter who you are — whether you’re looking to vacation in style or just want some peace of mind abroad — a travel rewards credit card could be your ticket to a better trip. But with all the options out there, how can you know what kind of travel rewards card is best for you?
In this guide, we’ll answer all your travel rewards credit card questions and more. We’ll help you figure out what kind of credit card could be your perfect travel companion, and we’ll make sure you walk away as a travel rewards pro.
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Breaking down the benefits of travel rewards credit cards
So, you may have heard that travel rewards credit cards are all about the perks, but what are those perks exactly? And how do you get them? Let’s break it down.
Some of the most popular rewards you can get with a travel rewards credit card include …
- The chance to earn points or miles you can redeem toward airfare, hotels, car rentals and even cruises
- Introductory sign-up bonuses that allow you to earn thousands of points or miles after spending a certain amount within the first few months of account opening
- Hotel upgrades and free hotel stays
- Airline companion tickets, which allow you (typically once a year on your account anniversary) to bring one companion along with you on your flight — usually for only the cost of taxes and fees
- Access to airport lounges
- Travel credits you can use toward an array of travel-related purchases
- Travel protection and insurance
- Free checked bags and priority boarding
Points vs. miles: What’s the difference, anyway?
Miles and points tend to work the same way. Depending on the card and program, you’ll earn either miles or points for your purchases. You can then redeem them for a variety of eligible items and services.
Here’s one important distinction: Miles are typically associated with cards that are cobranded with a specific airline. They typically have no set value, and you can generally only redeem miles for airline tickets with the associated airline and its partners.
For that reason, it may take a bit more legwork to maximize the value of your credit card miles. However, many people find the payoff well worth the trouble.
Points, on the other hand, are typically tied to a card issuer like Chase (where they’re called Chase Ultimate Rewards® points) or American Express (where they’re called Membership Rewards® points). Unlike miles, points generally have a set value, and they’re typically more flexible in terms of redemption.
You might be able to score gift cards and merchandise with your points, or you could choose to redeem them on travel purchases like airfare, train tickets or taxi rides.
You likely won’t find a card that offers all these benefits together, which is why you’ll want to evaluate what kind of traveler you are (and what you value most) before you pick out a card and the rewards that come with it.
How to choose the right travel rewards card for you
Travel rewards cards can serve many purposes, from helping you travel for cheap to making your travel experiences a bit easier or more comfortable.
As we mentioned though, not all travel rewards credit cards are created equal. There are several types of rewards that cards can offer. And while they’ll mostly be travel related, some cards are better for certain travel goals.
Let’s take a look at all the different types of cards out there so you can get a better sense of which card or cards could match your traveling lifestyle.
Cobranded airline credit cards
When you frequent a particular airline, you benefit the most when you focus on that brand. Brands reward their most loyal customers, and pairing that with the right cobranded travel rewards card can boost your benefits.
Many airlines offer cobranded credit cards that can earn you additional miles on all of your purchases, which you can use toward your next flight.
This really becomes handy when you live near an airline hub and focus on flying that one particular airline. The savings from perks like free bag-checks or credit toward airline status can add up to a large chunk of change over time, and make travel hassle-free.
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Cobranded hotel credit cards
Faithful to a specific hotel chain? Holding a cobranded credit card can earn you some perks that make your stay a bit more comfortable and earn you rewards toward free nights while you’re at it.
All-purpose travel rewards cards
Maybe you don’t want to be limited to a particular loyalty program and do want to earn travel rewards you can use across multiple travel options. You have a few options, from credit cards that earn you transferable currencies, to travel rewards credit cards that offer up “travel credits” toward everyday spending.
The Chase Sapphire Preferred® Card allows cardholders to transfer points to a number of airline and hotel partners on a 1-to-1 basis. This allows you to put your points toward exactly what you need, so you can research the best option for your travels and transfer all or some of your points there.
You can maximize your Chase Sapphire Preferred® Card benefits by redeeming points through the Chase Ultimate Rewards® portal, where you’ll get an automatic 25% bonus, making points worth 1.25 cents each.
Some other credit cards — typically those with high annual fees — offer travel credits, which you can apply toward many travel-related purchases you make (depending on what your card company considers a travel-related purchase).
These types of credit cards also give you the ability to really expand what you can use your rewards on, because what they consider travel-related sometimes covers more than just airfare and hotels — think trains, buses and even rental cars.
Cards with elite perks
If you’re a frequent traveler, you can get a travel rewards card with all the bells and whistles. The catch? These usually come with a hefty annual fee.
Here are a few of the most popular elite travel rewards cards.
|Chase Sapphire Reserve®||For those who want a card with travel credits that they can apply to a variety of travel purchases|
|Platinum Card® from American Express||For those who are frequent Uber users|
Earlier, we mentioned the Chase Sapphire Preferred® Card. The big brother of that credit card is the Chase Sapphire Reserve®, which carries a $550 annual fee but tacks on a slew of travel-related perks plus a higher earning rate on rewards. To get all the elite details, check out our review.
The Platinum Card® from American Express is also worth a look. It carries a $695 annual fee but also adds on up to $200 in Uber credits each year. You also get complimentary TSA PreCheck or Global Entry and access to Priority Pass™ Select lounges. For the full rundown, read our review.
Is paying a high annual fee worth it?
When looking at cards that carry high annual fees, it’s important to stick to a budget. A high annual fee could quickly diminish the value of any rewards you might be able to earn.
You’ll want to make sure that after paying an annual fee, you’ll earn some sort of rewards or get benefits that will offset the annual fee. You can also calculate the value of the rewards you earn, and how much you’ll have to spend to break even with the annual fee.
Be careful not to overspend just for the sake of rewards. If you have to stretch your budget just to get extra rewards, you’ll quickly bite into any value from the rewards.
Everything you need to know about airline companion tickets
Maybe you don’t always travel solo and you have a travel companion you like to bring along. Although you can always book a trip for two, it’s possible to use your travel rewards in your favor to make the trip more affordable.
Companion tickets allow you to bring someone along for the ride at a discounted price, sometimes for only the cost of the required fees and taxes. There are several airlines that offer companion tickets, but how can you know which one to go for? We’ve got you covered.
How you can travel for cheap
Once you’ve picked out your perfect travel card, the key to traveling cheap is to utilize rewards cards in a way that optimizes your savings. Now that can be easier said than done, but planning ahead with your trip can save you some serious cash.
How should I use my rewards, like miles and points, toward a possible trip?
Your best chance at getting a great redemption and excellent value for each point or mile is redeeming them in advance or when programs run special award sales — last-minute redemptions can really lower the value of your rewards.
Take, for example, the more flexible travel rewards we mentioned above that you can redeem with different airlines or hotels, like Membership Rewards® points. Occasionally they’ll run an added transfer bonus to one of their partner programs, which can earn you extra miles or points when you transfer.
Another key factor is making sure that if you sign up for a credit card that offers a sign-up bonus, you qualify for it and meet the requirements. A sign-up bonus can be worth a solid chunk of change and can give you a big boost toward a free (or almost free) trip, so don’t miss out on that.
Keep in mind, you should always budget and not spend more than you’re able just to get extra points. You should use your points and miles as a way to reward the spending you’re already doing.
When you’re on a trip, the perfect formula is to make sure you marry your travel benefits with your earned miles and points. Take advantage of your card’s travel benefits (like trip insurance, lounge access, free checked bags, etc.) and use those in conjunction with your points and miles, which can be used to seriously subsidize things like airfare during your trips.
If you redeem the points or miles you earn from spending, ideally you can plan a trip where you end up paying just the taxes and fees on airfare or a hotel stay.
Now that you’re armed with some knowledge on what options might exist, it’s important to know how to maximize your hard-earned travel rewards — whichever card you choose.
The most important thing to remember when picking your travel rewards credit card is to select a card that gives you enough value.
If you fly a lot but tend to visit friends instead of stay in hotels, then a hotel rewards card is probably not for you. If you love the idea of getting VIP status but don’t think you’ll be able to make up for the high annual fee that comes with elite cards, then try a card that’s just one step down.
Being smart about the type of card you choose can be key in helping you offset your travel costs. Know the type of traveler you are and pick a card that suits your style — we promise there’s something out there for you.
Will signing up for a new credit card hurt my credit scores?
When you decide that a certain travel rewards credit card is for you, you might be left wondering how a new credit card could affect your credit scores if you choose to apply. Adding a new credit card could actually improve your credit health over time, or on the flip side it may knock it down a few points, depending on how you use it. This is because healthy credit scores are based on a number of factors, like length of credit history, number of new accounts, or total debt-to-credit ratio, known as credit utilization.
Taking a look at our top travel rewards credit cards is a good start. You can see a list of our recommended cards and what they each have to offer.
Now that you can tackle which travel rewards you’ll want to use and how to use them, you can pick a credit card option that best fits the bill.
A travel rewards card could help you earn flights and hotel stays. Check out our best picks here.
Before booking your next trip, check out these travel rewards cards and see which one is the right fit for you.
Frequent flyers are likely to benefit from a travel rewards card. For most others, a cash back card offers simpler and more flexible rewards.