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When Is Getting A Travel Credit Card Worth It?

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Travel credit cards are one of the best ways to earn rewards points and miles toward travel. Whether it's an airline credit card that racks up frequent-flier miles for award flights, a hotel credit card whose points can be redeemed for hotel stays, or a more general travel credit card with points you can cash in for statement credits or transfer to airlines and hotels, a travel credit card is a useful tool that lets you make the most of your everyday spending.

However, many travel credit cards charge high annual fees and involve complicated terms and conditions. All that could make you wonder whether getting a travel credit card is even worth the effort. A travel credit card is worth it when it allows you to earn points or miles that you will actually be able to redeem for travel, perks you can use to save time and money, and even protections to help when things go wrong on the road. Here are some key things to keep in mind when thinking about whether to get a travel credit card.

What Is a Travel Credit Card?

A travel credit card is a type of rewards card that earns points or miles you can redeem for travel. Travel credit cards come in a few different shapes and sizes.

General Travel Credit Cards

There are two ways general travel credit cards work. The first, and simpler of the two, are cards that earn points or miles you can redeem for cash back toward travel and other purchases. These are cards like the Capital One® Venture® Rewards Credit Card, which earns 2 miles per dollar spent on all purchases. Cardholders can then redeem these miles at a rate of 1 cent per mile toward travel. The good thing about these types of cards is that you don't have to be loyal to a single airline or hotel for years to rack up rewards, and you can usually redeem your points toward travel expenses beyond just airline tickets and hotel stays.

Alternatively, you can use a general travel card to earn transferable points, like the Chase Sapphire Preferred® Card. It earns Chase Ultimate Rewards points that you can transfer to 10 airline partners including JetBlue, Southwest and United, plus three hotel partners including Hyatt and Marriott. Other transferable points programs include American Express Membership Rewards, which you can earn using cards like the American Express® Gold Card; Citi ThankYou Rewards, which you can earn with cards like the Citi Premier℠ Card; and Capital One miles.

Either way, the value of your points or miles depends on the program and even the specific card you carry, which means learning the exact benefits of your travel credit cards is imperative for making the most of your points.

Airline Credit Cards

These are probably the most well-known travel credit cards. Airlines partner with banks to offer frequent fliers credit cards they can use to earn miles on everyday purchases. Most airline credit cards earn 2 or more miles per dollar spent on purchases with the associated airline and then 1 mile per dollar on everything else, though some do earn bonus miles at other places like restaurants and grocery stores.

For example, the Citi® / AAdvantage® Platinum Select® World Elite Mastercard® from our partner earns 2 American Airlines miles per dollar spent on eligible American Airlines purchases as well as at restaurants and gas stations, then 1 mile per dollar on everything else. When you fly on an American Airlines flight, it also offers benefits like one free checked bag for you and up to four travel companions on domestic flights, preferred boarding and a 25% statement credit on in-flight food and beverage purchases.

Hotel Credit Cards

Like airlines, many major hotel chains field credit cards their loyalty program members can use to earn points for hotel stays as well as enjoy benefits like automatic elite status and on-property credits to use during stays. For example, the Marriott Bonvoy Boundless™ Credit Card from Chase racks up 6 points per dollar spent on qualifying purchases at over 7,000 participating Marriott Bonvoy™ properties, plus 2 points per dollar on everything else. It gives cardholders automatic Silver Elite Status, which includes perks like bonus points on stays and late checkout (if available). Cardholders also get an automatic free night each year after their account anniversary that is good for a stay at hotels costing up to 35,000 points.

Think about the type of points or miles you will get the most use out of, and whether a particular travel credit card includes perks that you will get value from before applying.

When Should I Get a Travel Credit Card?

If you think you might want to apply for a travel credit card, it pays to take advantage of good timing. Here are some indications the timing might be right.

  • There's a high introductory offer. Many travel credit cards come with what is known as a sign-up bonus, intro bonus or welcome offer. This is usually tens of thousands of points or miles you can earn by opening a new card and using it to make a certain dollar amount of purchases within a set timeframe.
    For example, the Chase Sapphire Reserve® is offering new cardholders 50,000 bonus points after they spend $4,000 on purchases in the first 3 months of account opening.

    The thing is, introductory offers change all the time, so if you apply at the wrong time, you could be missing out on thousands of points or miles. For instance, the welcome offer for the Delta SkyMiles® Gold American Express Card was recently just 30,000 bonus miles for making $1,000 in purchases with the card in the first 3 months. However, it is now 35,000 miles after you spend $1,000 in the first 3 months. Paying attention to the changes in welcome offers on any credit cards you're thinking of applying for can net you a lot of extra points for rewards travel.

  • The annual fee is waived. Sometimes, as part of the introductory package, travel credit cards offer to waive their annual fees for the first year. These types of offers tend to come and go, though, so pay careful attention to the terms and conditions of any credit card you apply for to make sure it is one that includes this kind of savings.
  • Your credit has improved. Finally, and perhaps most important, many of the best travel credit cards are considered premium products and require applicants to have good to excellent credit. If you have been working to improve your credit score, now might just be the right time to finally apply for a new travel credit card.
    Before doing so, though, check your score (which you can do for free through Experian or even other credit cards you might already carry), and see if it is within the average range for a specific card. One of the ways you can better your credit is to pay off your bills in full and on time every month. That will also ensure you're not hit with late fees and interest payments that would wipe out the value of any points or miles you earn with your new card.

Is It Worth Paying an Annual Fee?

Many travel credit cards charge an annual fee to keep your account open each year. Think of it this way: You pay the annual fee to be able to use a card's benefits. So it's only worth shelling out that fee year after year if you are getting more value from your card's perks than you are paying to keep it open.

For example, the Capital One® Venture® Rewards Credit Card has a $95 annual fee. But for that, you get the ability to earn miles you can redeem for statement credits against your purchases, or transfer to Capital One's airline and hotel partners including Air Canada, JetBlue and Wyndham.

The card will also reimburse you up to $100 for either a Global Entry or TSA PreCheck application once every four years, which takes the hassle out of getting through the airport, and which may make up for the annual fee for at least one of the years you carry the card. Although it can be a pain, when your annual fee comes due each year, do the math and figure out whether you got more value from your travel credit card's benefits than you are paying to continue carrying it.

What to Look for When Choosing a Travel Card

You've read up on travel credit cards, homed in on a few different options, and looked at the pros and cons, including introductory offers and annual fees. Here are the final things you need to consider to choose the right travel credit card for you.

1. Is there something special about the introductory offer?

Flashy bonuses of 50,000 and even 100,000 points or miles can sound intriguing. But before you apply for a travel credit card, do a little homework to see how its introductory offer has changed over time. If a card you are interested in has ho-hum offers for new cardholders, it is probably worth waiting to see if a better offer comes around in the near future.

2. Can you use the points or miles?

Because there are so many different types of travel credit cards, choosing the right one for your needs will really depend on the kinds of points or miles you will actually get use out of. For example, if you only fly United, it might not be worth getting a Delta credit card since you probably won't be booking award tickets on the airline anytime soon. Or if you don't stay in hotels often, why get a Hyatt or Hilton credit card? Think about the kinds of travel plans you tend to make, and then get a credit card that earns the types of points or miles you can redeem for them.

3. Will you benefit from bonus earning rates?

To stay competitive, many travel credit cards have begun offering bonus points when you use them at specific merchants, like restaurants or grocery stores. This can vary from card to card even within the same program.
For example, the Hilton Honors American Express Aspire® Card racks up 14 points per dollar on eligible Hilton purchases and then 7 points per dollar for eligible purchases in the following categories: U.S. restaurants, car rentals booked directly with select companies, and flights booked directly with airlines or through AmexTravel.com. It earns 3 points per dollar everywhere else. By contrast, the Hilton Honors American Express Surpass® Card earns 12 points per dollar on eligible Hilton purchases; 6 points per dollar for eligible purchases at at U.S. restaurants, U.S. supermarkets and at U.S. gas stations; then 3 points per dollar elsewhere. So which card will earn you the most points and is the better fit for your needs will depend on where you tend to spend the most money.

4. Will you take advantage of the benefits?

As you weigh the benefits of a credit card against its annual fee, really calculate the value you will get from each specific perk and whether you will use it year after year. For example, it's no good applying for the Marriott Bonvoy Brilliant™ American Express® Card and paying its $450 annual fee if you're not planning to use its annual free night award (at a participating hotel with redemption rate up to 50,000 points) and the $300 in statement credits each card membership year you get for eligible purchases at participating Marriott Bonvoy hotels.

5. Do you want travel protections?

Although they often get overlooked, many travel credit cards offer protections in case something goes wrong with your plans. Among the best, the Chase Sapphire Preferred® Card may cover nonrefundable expenses up to $10,000 per person and $20,000 per trip, with a yearly max of $40,000, if travel plans are cancelled or interrupted (for covered reasons). If you're delayed by over 12 hours or have to stay overnight somewhere, you and certain family members might be entitled to up to $500 per ticket for things like lodging and meals. The card also may cover replacing certain belongings in case your checked bag is delayed or lost. Finally, the card comes with primary insurance on car rentals, meaning you don't have to go through your own insurance or purchase the rental agency's supplemental plans. All those protections can really add up and save you headaches and cash for when your travel plans eventually do go awry.

Weigh the Benefits

Travel credit cards can be great tools for earning rewards such as free flights and hotel stays as well as offering perks like Global Entry application refunds and comprehensive travel protections. When thinking about whether a travel credit card is worth it for you, consider the type of points or miles you will get the most use out of, whether a card is offering a special introductory package, and if its benefits are worth more to you than the cost of its annual fee. By answering those simple questions, you can narrow down the choices to a card that will suit your needs. You can find current credit card offers and personalized picks through Experian CreditMatchTM.

All information about the Citi Premier℠ Card, Marriott Bonvoy Boundless™ Credit Card, Hilton Honors American Express Aspire® Card and Marriott Bonvoy Brilliant™ American Express® Card has been collected independently by Experian and has not been reviewed or provided by the issuer of the card. Offer details may be outdated.