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If you like traveling, you probably enjoy looking for travel deals and other opportunities that can help you explore the world and visit relatives more often. If so, you know that rewards credit cards can also make it easier to book a trip. However, you might be asking “What’s the point of a travel credit card?” if you need to pay an annual fee or have limited redemption options. I’m going to talk about a few reasons why you may benefit from a travel card.
What Is The Point Of A Travel Credit Card? Complimentary Travel Benefits, For Starters
There are many travel credit cards to choose from, but having an idea of which benefits you can use most often will streamline the comparison process. Perks come in different shapes and sizes including:
- Airport lounge access
- Checked bags
- Elite loyalty status
- Free Global Entry or TSA PreCheck
- Hotel anniversary nights
- Hotel experience credits
- In-flight purchase statement credits
- No foreign transaction fee
- Priority boarding on flights
- Rental car privileges
Premium credit cards tend to offer the most benefits but also charge a higher annual fee. However, you can quickly offset the membership cost when you use the benefits on a regular or semi-regular frequency. You can save hundreds or thousands versus buying each perk separately, depending on the card.
It can be easy to choose a travel credit card by listing your favorite benefits and estimating your travel budget.
In addition to looking at the ongoing card benefits, you should also decide which signup bonus you can benefit from. Travel credit cards tend to offer more valuable bonus offers than cash back credit cards which makes the card more valuable to earn during the first year.
You may also time your application to qualify for a limited-time credit card offer that lets you earn more points or miles but with a similar spending requirement to the standard offer.
Several cards offer signup bonuses worth at least $500 in travel rewards and potentially $1,000 or more in award travel.
Credit card signup bonuses can have strict application rules that make it hard to receive a second bonus for the same card. For example, you can only receive a bonus for a particular American Express or Capital One card once, so waiting to get one of the most valuable offers works to your advantage.
Just be sure to keep the card open for at least 12 months to avoid having to give back some of the bonus offer. This means you will need to pay a renewal fee and close your account during your second membership year if you decide not to keep a product.
Another Point of a Travel Credit Card? The Ability To Earn Valuable Travel Points
Each card purchase lets you earn points or miles that you can redeem for award travel. For example, you may choose an airline miles credit card for your preferred carrier as award flights tend to be the most valuable redemption option. Co-branded airline credit cards can also earn loyalty points that help you qualify for airline elite status sooner.
If you’re simply looking for the best travel deal, a flexible rewards credit card such as the Chase Sapphire Preferred® Card or the Capital One Venture Rewards Credit Card lets you redeem your points for flights, hotels, car rentals, cruises, excursions, and more. Both products have a reasonable $95 annual fee and several additional benefits. Visit our Chase Sapphire Preferred vs Capital One Venture comparison to learn more.
Typically, credit points and travel miles are worth 1 cent but can be potentially worth more thanks to redemption bonuses or when you can book flights directly from the airline.
If you’re focusing on earning points, a no-annual-fee travel credit card can be better than one with an annual fee. You won’t have as many exciting side perks, but the bonus categories are competitive, and you can easily build credit.
1:1 Point Transfers
Several credit cards also provide the flexibility of transferring your points at a 1:1 ratio to participating airlines and hotels. Point transfers can help you procure a more valuable redemption ratio and pool your credit card earnings with your existing loyalty account balance.
The transfer partners differ by loyalty program and the programs to consider first:
- American Express Membership Rewards®
- Capital One Venture Miles
- Chase Ultimate Rewards®
- Citi ThankYou
Most loyalty programs let you transfer to international airlines which is great if you fly overseas often. Common partners include Air Canada Aeroplan, British Airways, Flying Blue, and Emirates.
Programs also have unique partnerships with domestic airlines. For example, consider an American Express travel credit card to transfer your points to Delta Air Lines.
For United Airlines or Southwest Airlines, a Chase Sapphire travel credit card is a better option.
What’s the Point of Airline Credit Cards?
Consider an airline credit card when you fly with a particular airline several times per year. You can enjoy special benefits like free checked bags, expedited boarding, and in-flight purchase discounts along with the ability to earn miles on every card purchase.
Most airlines offer several products with different benefits and annual fees to help frequent, regular, and occasional travelers find the best option for their travel habits.
Some of the best airline credit card programs include:
What’s the Point of Hotel Credit Cards?
The best reason to get a hotel credit card is for these opportunities:
- Automatic elite status
- Opportunities to earn free nights
- Travel statement credits
If hotel purchases are your core travel expense, you may also be tempted to get a hotel credit card to earn hotel points.
You can earn a substantial number of hotel points that can help you book free nights more often, but be aware that hotel points are typically worth 30% to 50% less than airline miles and general credit card points. Your earning potential is higher, but the redemption value leaves something to be desired.
Consider these co-brand hotel loyalty program credit cards:
Summary Of What Is The Point Of A Travel Credit Card
The best travel cards can help you unlock complimentary benefits that you’re currently paying for or can’t reach until you get a higher loyalty status level. You will want to make sure you can redeem the rewards points and additional benefits along with being comfortable with the annual fee. These cards provide more benefits than your run-of-the-mill credit card.