Anyone who travels frequently could be earning points and air miles to put towards free travel in the future. A Nerdwallet survey found that the average traveler is sitting on 64,800 miles, equivalent to $648 of travel expenses. Every time you make a travel purchase using a regular credit or debit card, you could be missing out on these free perks. For new customers, though, the world of travel credit cards can be a confusing one. This guide exists to help you decide whether a travel credit card is right for you and how to pick the best one.
Just a quick note: we’re experts on finding beautiful month-to-month rental homes for remote workers and travelers, not experts on finance. This information comes from our experience as travelers but be sure to seek advice from a finance professional before taking out a credit card.
What Are the Benefits of a Travel Credit Card?
Long-term travelers who don’t already take advantage of credit card rewards may be wondering what the point is. Well, if you travel frequently, then you could be accruing a ton of free travel perks, if only you had the right credit card. Here are a few of the benefits that come with owning a travel credit card.
Earn Miles and Points
The main reason that travelers take advantage of credit cards is to accrue points. These are rewarded based on how much you spend and can later be used for travel purchases without you having to spend any extra money. You can use these points to buy flights, book hotels, or benefit from a range of other travel expenses.
If you travel often, then this is clearly a bonus. Rather than buying a flight to San Diego and then another flight home, you could book just one flight and then use points to purchase the return ticket. For long-term and full-time travelers, there’s no doubt that a credit card could offer huge savings. However, rewards aren’t given out freely and you need a high enough income to be able to spend enough to make it worth it.
Additional Perks
Every credit card comes with its own unique perks. They’re doing what they can to attract travelers so you may get extra benefits beyond points and air miles. For instance, some credit cards will give you free access to airport lounges or free upgrades to business class flights. Others will waive foreign transaction fees or allow you to check in your suitcase for free on every flight you buy, even if the airline normally adds baggage fees.
Potential Costs of a Travel Credit Card
No travel credit card is perfect. They all come with costs that may outweigh the benefits but this is something that you’ll have to assess based on your own personal circumstances. Like any credit card, travelers’ cards usually come with an annual fee and a set of conditions. The more you spend, the greater the rewards. However, you have to be sure that you’re able to pay this debt off each month in order to avoid paying interest.
It will be hard to be accepted for a travel card if your credit score is low so work on paying off all debts before applying for one. Remember: this isn’t free money. You get rewarded based on your ability to spend large amounts of money. If you’re already doing this month to month, then a travel credit card is a no-brainer. If not, then it might not be something you can afford.
Main Perks to Look For
When deciding which travel credit card is right for you, it’s important to look out for certain perks. Being clear about what you’re looking for will make it easier for you to find the right option. Firstly, consider the welcome offer. This is the incentive that card companies offer for new customers. You’ll want to build up your points as quickly as possible and this is a great way to do that. Generally, you’ll get a welcome reward bonus of around 50,000 points but you will need to spend a few grand before you have access to it.
The welcome bonus isn’t everything, though. Look at what rewards you get once you own the card. Maybe you’re a carry-on-only traveler, who’s more interested in cutting out foreign transaction fees than checking in luggage. Choose the reward that makes sense for you. Of course, you’ll also want to check the spending requirements and fees. A low spending minimum is better if you’re on a low income, as are lower annual fees. Add these costs up to figure out whether the rewards you’ll get are worth it.
Analyzing Your Habits and Goals
There’s no single best credit card for every traveler. In order to find the best one, you need to have a look at your own spending habits and consider what perks you’re looking for. One card may be great for frequent fliers but not so good if you want to spend more time in luxury hotels. Look closely at the perks offered by each credit card and use this to determine your decision.
You need to go through all the numbers and start cutting down your list of options. These cards have minimum spending requirements so start by analyzing your spending habits and see whether you can meet these requirements without going into debt. Next, check the annual fee and consider whether this is a cost you’re willing to pay. Finally, think about your goals. Are you looking to embrace slow travel? If so, you may not gain the benefits these cards offer. However, if you’re hoping to fly more and transition into full-time travel, then these credit cards might offer an affordable way to do just that.
Most Popular Travel Credit Cards
There’s no objectively best travel credit card. If you choose to use one, it will be based on your own assessment of its costs and rewards. To get you started on your research, though, here are some examples of the most popular credit cards for travelers today.
Chase Sapphire
Chase is among the most popular travel credit cards. The main options are Chase Sapphire Preferred, Chase Sapphire Reserve, and Chase Freedom Flex. The Sapphire options are considered premium cards for high-spenders and frequent fliers while the Freedom Flex comes with no annual fees but fewer perks.
Capital One
The Capital One Venture card has been specifically designed for travelers, offering a simple and easy-to-understand rewards program. This is for travelers who just want to save on flights and hotels. It comes with a 50,000-point welcome bonus and double points on all purchases.
American Express
Some of the best rewards can be found on American Express travel cards. The Business Platinum card is aimed at business owners and comes with a whopping 100,000-point welcome bonus. The Gold Card is good if you want rewards on daily spending, offering 4x points on food purchases and a $120 Uber credit. You can also opt for the Delta SkyMiles Gold card if you often fly with Delta.
Credit cards aren’t for everyone but they can potentially offer fantastic perks that you otherwise wouldn’t have access to. Frequent fliers and tenacious travelers might be able to easily wrack up enough points to travel in luxury for free. However, consider all the costs carefully and weigh them up against the rewards to see whether a travel credit card is right for you.
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