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If you’ve wanted a travel credit card but still aren’t sure if it is worth it, you may have considered a cash back card instead. Alternatively, you may want to learn more to find which might work best in the long run. Would a cash back or travel rewards credit card let you maximize your spending? The answer depends on your lifestyle, goals, and spending habits. However, we can help you wade through the choices to decide which card is your best option.
Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.
Cash Back vs Travel Rewards Credit Cards
While both cash back vs travel rewards credit cards have their perks and benefits, choosing the wrong one will put a damper on your rewards. Do you travel (or plan to travel) in the coming months? Or do you prefer getting cash back?
Each card is different. You may find one that really speaks to your financial goals and needs. So, even if you’re leaning towards a cash back card, it’s helpful to look at different options to get an overall picture. And even if you aren’t traveling soon, you’ll find you can still earn travel rewards without stepping a foot outside your home.
Travel Credit Cards
If you take several trips per year, a travel credit card can be the better option. Below are a few reasons travel credit cards can be better.
Tiered Purchase Rewards
Most travel credit cards offer tiered rewards. You can usually earn between 1 and 5 points per $1 spent on most credit cards. Co-brand hotel credit cards, such as some of these best hotel credit card options, may award more points for hotel loyalty purchases. As travel-related expenses tend to be a large portion of your monthly budget, you might be able to earn more points/miles than a flat-rate credit card.
Note that there are flat-rate travel rewards cards and tiered rewards cash back credit cards as well.
Above-Average Redemption Value
Travel rewards tend to be more valuable than cash rewards. Most credit card points are worth 1 cent each when redeemed for cash rewards, gift cards, or travel statement credits.
However, your points/miles can be worth as much as 6 cents each when redeeming for first-class or business class award flights on select airlines. Select cards offering 1:1 transfer ratios let you redeem your points for maximum value.
Complimentary Travel Perks
Travel credit cards are also more likely to offer additional benefits, saving money on travel. Some examples of the perks you can get include:
- Free hotel nights
- Checked baggage fee waivers
- Complimentary airport lounge access
- Airline fee credits
- Travel fee credits
- Global Entry or TSA Precheck application fee credit
- Upgrades and priority boarding
- Late checkout
- Automatic elite status
These benefits will vary by card. Generally, the more perks a credit card has, the higher the annual fee. Even so, there are no annual fee options available that are worth considering (more on that below).
Related: Best miles credit cards
Most travel credit cards offer a one-time signup/welcome bonus for new card members. Most bonuses require you to spend between $1,000 and $5,000 within the first 3 months. Higher spending requirements usually signify a more valuable bonus between $300 and $1,000.
Most cash back bonus offers are worth around $150 but only require you to spend $500 in the first 3 months.
Take a peek at our post of some of the best credit card offers if you want to get an idea of what is currently available.
No Foreign Transaction Fee
Travel credit cards are more likely to charge an annual fee than cash back cards. Though, there are several travel credit cards without an annual fee. Typically, you can expect to pay an annual fee between $95 and $550 for most cards. However, using the card perks and maximizing your point/mile redemptions can exceed or offset the annual fee cost.
While you’re more likely to pay an annual fee, travel credit cards are less likely to charge a foreign transaction fee. This is something to keep in mind if you make international purchases.
Here are some of the best no-annual-fee travel credit cards.
Best Travel Credit Cards
Below are some of the best travel credit cards that you should consider first. These cards do a great job of making it easy to earn rewards points/miles, redeem points/miles for award travel, and offer benefits worth more than the annual fee.
Capital One Venture Rewards Credit Card
The Capital One Venture Rewards Credit Card is an excellent option for one of the best overall travel credit cards. Key reasons include:
- Earn at least 2x miles on all purchases
- Redeem miles for travel statement credits, upcoming travel, or transfer to airlines and hotels
- Global Entry or TSA PreCheck application fee credit, up to $100
- The annual fee is $95
- No foreign transaction fee
However, if you are wanting to earn a few more miles on travel, good news—earn 5x miles on hotels and rental cars booked through Capital One Travel. Plus, Venture cardholders will earn 5x miles when booking through the Turo app or on Turo.com (through May 16, 2023).
Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel, with the Capital One Venture Rewards Credit Card.
Chase Sapphire Preferred Card
The Chase Sapphire Preferred® Card is another budget-conscious travel credit card with flexible redemption options. Your points are worth 1.25 cents each when booking award travel. Or, you can transfer points to travel partners including United Airlines, Southwest Airlines, and World of Hyatt.
The Chase Sapphire Preferred earns unlimited:
- 5x points on travel purchased through Chase Ultimate Rewards® (excluding hotel purchases that qualify for the $50 Anniversary Hotel Credit)
- 3x points on dining (including eligible delivery services, takeout, and dining out)
- 3x points on online grocery purchases (excluding Target®, Walmart®, and wholesale clubs)
- Also 3x points on select streaming services
- 2x points on all other travel purchases
- 1x point per $1 spent on all non-bonus purchases
There is a $50 annual Ultimate Rewards Hotel Credit. It comes in the form of a statement credit that will automatically be applied to your account when your card is used for hotel accommodation purchases made through the Ultimate Rewards program, up to an annual maximum accumulation of $50.
Plus, on each account anniversary, you’ll earn bonus points equal to 10% of your total purchases made the previous year. So, if you spend $25,000 on purchases, you’ll get 2,500 bonus points.
Other benefits include:
- Points are worth 25% more when booking any award travel through Chase
- Transfer points at a 1:1 ratio to airlines and hotels
- Trip cancellation insurance of $10,000 per person and $20,000 per trip
- Primary rental car insurance benefits
- No foreign transaction fees
New Chase Sapphire Preferred® Card cardholders can earn 60,000 bonus points after spending $4,000 on purchases in the first 3 months from account opening. That’s $750 when redeemed through Chase Ultimate Rewards®.
There is a $95 annual fee.
Related: Chase Sapphire Reserve vs Chase Sapphire Preferred
The Platinum Card from American Express
One of the best premium credit cards for frequent travelers is The Platinum Card® from American Express. While this card has a hefty $695 annual fee (See Rates & Fees), the value of these Amex Platinum benefits is worth the annual fee:
- 1:1 airline point transfers
- Airport lounge access (includes Centurion, Priority Pass (enrollment required), Delta Sky Club, and others)
- Global Entry or TSA PreCheck application fee credit
- Hilton Honors Gold and Marriott Bonvoy Gold Elite loyalty status (enrollment required)
Cardholders earn 5x Membership Rewards® Points for flights booked directly with airlines or with American Express Travel, up to $500,000 on these purchases per calendar year, and earn 5x Membership Rewards® points on prepaid hotels booked with American Express Travel.
Cardholders can get $200 back in statement credits each year on prepaid Fine Hotels + Resorts® or The Hotel Collection bookings with American Express Travel when they pay with your Platinum Card®.
Also, select one qualifying airline and then receive up to $200 in statement credits per calendar year when incidental fees are charged by the airline to your Card.
Plus, American Express has expanded The Centurion® Network to include 40+ Centurion Lounge and Studio locations worldwide. Now there are even more places your Platinum Card® can get you complimentary entry and exclusive perks.
Other Platinum Card from American Express Benefits
There’s also a digital entertainment credit, making this card one of the best for streaming services. Cardholders can get up to $20 in statement credits each month when they pay for eligible purchases with the Platinum Card® at your choice of one or more of the following providers: Peacock, Audible, SiriusXM, The New York Times, and other participating providers. Enrollment required.
In addition to enjoying TSA PreCheck or Global Entry access, cardholders can also enjoy CLEAR perks. Breeze through security with CLEAR® Plus at 45+ airports nationwide and get up to $189 back per year on your membership (subject to auto-renewal) when you use your Card.
Another exciting benefit is the ability for cardholders to get up to $300 back each year on an Equinox+ subscription or any Equinox club membership when they pay with their Platinum Card. Enrollment required. Learn more.
Plus, get a $155 Walmart+ credit, which covers the cost of a $12.95 monthly Walmart+ membership with a statement credit after you pay for Walmart+ each month with your Platinum Card. The cost includes $12.95 plus applicable local sales tax.
Get the full details and learn more in our in-depth The Platinum Card from American Express review.
The annual fee is $695 (See Rates & Fees) but can be offset with the perks, which are valued at over $1,400.
Welcome Bonus Offer
New The Platinum Card® from American Express cardmembers can earn 80,000 Membership Rewards® points after spending $6,000 on purchases on their new Card in the first 6 months of Card Membership.
Learn more: Johnny Jet Recommended Credit Cards
Cash Back Credit Cards
Cash back credit cards can be the better option if you enjoy the flexibility of cash rewards. It’s possible to redeem your rewards for cash statement credits, bank account deposits, or gift cards.
Some travel credit cards let you redeem points for recent travel purchases. But if you don’t travel often, it can be several months between redemptions. If you don’t travel regularly, the more valuable redemption options or additional travel perks may not help you save money. After all, you have to patronize a participating airline or hotel to use the benefits.
The best cash back credit cards are also less likely to charge an annual fee. Travel credit cards with the most benefits tend to charge higher annual fees.
Most, but not all, cash back credit cards give you flat-rate rewards programs. On average, you can expect to earn 1.5% or 2% back on purchases. However, the best cash back credit cards award up to 5% back on select purchases.
Best Cash Back Credit Cards
Here are some cash back credit cards to consider first.
Citi Double Cash Card
The Citi® Double Cash Card earns up to 2% back on all purchases. Cardholders earn unlimited 1% cash back when they make a purchase, plus an additional 1% back when they pay for those purchases. To earn cash back, pay at least the minimum due on time.
There is no annual fee, but there is a 3% foreign transaction fee.
Related: Citi Double Cash Review
Capital One Quicksilver Cash Rewards Credit Card
The Capital One Quicksilver Cash Rewards Credit Card earns an unlimited 1.5% back on every purchase. However, earn unlimited 5% cash back on hotels and rental cars booked through Capital One Travel. It doesn’t have an annual fee or a foreign transaction fee. There is no minimum balance requirement when redeeming your cash rewards.
This card also has a signup bonus of $200 bonus cash after spending $500 in the first 3 months of account opening.
Related: Capital One Quicksilver Cash Rewards Credit Card review
Chase Freedom Flex
The Chase Freedom Flex℠ takes a unique approach to offer tiered rewards. You get 5% back on the first $1,500 spent in rotating bonus categories, once activated.
- 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate (then 1% back)
- 5% cash back on travel purchased through Chase Ultimate Rewards® (unlimited)
- 3% cash back on dining at restaurants, including takeout and eligible delivery services (unlimited)
- 3% cash back on drugstore purchases (unlimited)
- 1% on all other purchases (unlimited)
There isn’t an annual fee.
New Chase Freedom Flex℠ cardholders can earn a $200 bonus after they spend $500 on purchases in the first 3 months from account opening.
For the 1st quarter of 2023, the Freedom bonus categories for the Chase Freedom® (no longer accepting new applications) and Chase Freedom Flex℠ cards are:
- Grocery stores (excluding Walmart®)
- Target (qualifying grocery purchases made at Target will only earn a total of 5%)
- Fitness clubs & gym memberships
Once activated, the first $1,500 in combined purchases on the above categories made in January, February, and March 2023 earn 5% cash back and then 1% back. Activate by March 14, 2023, to earn the rewards.
There isn’t an annual fee, but the foreign transaction fee is 3%. If you happen to own either Chase Sapphire card, the points you own with the Chase Freedom Flex can be worth more when redeeming for travel by first transferring them to your Sapphire account. Otherwise, they are worth 1 cent each for cash and travel rewards when redeemed directly through your Freedom account.
The Blue Cash Everyday Card from American Express
The Blue Cash Everyday® Card from American Express offers the following rewards:
- 3% cash back at U.S. supermarkets (up to $6,000 per year in purchases, then 1%)
- 3% cash back at U.S. gas stations (up to $6,000 per year in purchases, then 1%)
- Plus, 3% cash back on U.S. online retail purchases (up to $6,000 per year in purchases, then 1%)
- 1% cash back on general purchases
Cash back is received in the form of Reward Dollars that can be redeemed for statement credits. There isn’t an annual fee (See Rates & Fees).
The Blue Cash Everyday® Card from American Express welcome bonus is the ability to earn a $200 statement credit after spending $2,000 in purchases on your new Card within the first 6 months.
Learn more: Cash Back Credit Cards
Related: 20 reasons to have the Blue Cash Everyday Card
Travel credit cards tend to offer more valuable redemption options and additional card benefits than cash back cards. However, cash back cards are better when you don’t travel or prefer the flexibility that comes with cash. Between cash back vs travel rewards, which do you prefer?
Are travel cards better than cash back?
Travel cards tend to offer higher redemption values for credit card points. They also tend to offer more valuable travel perks like airline lounge access, travel fee credits, and travel insurance.
However, cash back cards are better if you can’t maximize the travel rewards or additional benefits.
For example, you might be able to earn more rewards with the Citi Double Cash that earns up to 2% back on every purchase (1% when making the purchase, then 1% when paying for the purchase). Since the Double Cash doesn’t have an annual fee, you don’t lose the first portion of your rewards like most travel credit cards with a $95+ annual fee.
Is it worth getting a cash back credit card?
A cash back credit card can be worth it when you can’t maximize the redemption options or additional benefits of a travel credit card. Some exceptions can be a hotel credit card with a free anniversary night or an airline credit card with free checked bags. These benefits can exceed the annual fee.
Otherwise, a cash back card is a better option. Most cash back cards don’t charge an annual fee. They can also make it easier to earn bonus points on your daily spending. Since you can redeem your rewards for cash statement credits or bank account deposits, your cash rewards are less likely to expire than travel miles.
Which travel credit card is best?
The best travel credit card depends on your travel habits and the annual fee you’re willing to pay.
Which credit card is best for cash back?
The best overall cash back credit card is the Citi® Double Cash Card. It earns up to 2% back and doesn’t have an annual fee. However, there is a 3% foreign transaction fee.
In that case, go with the Capital One Quicksilver Cash Rewards Credit Card which earns 1.5% back on the U.S. and global purchases with no annual fee or foreign transaction fee.
For tiered rewards, consider one of these cards depending on your largest expense category:
- American Express Blue Cash Everyday: Up to 3% back at U.S. supermarkets
- Capital One Savor Cash Rewards Credit Card: 4% back on dining, entertainment, and select streaming services
- Chase Freedom Flex: Up to 5% back on rotating bonus categories
For rates and fees of The Platinum Card® from American Express, please click here.
For rates and fees of the Blue Cash Everyday® Card from American Express, please click here.