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A credit card might be a handy piece of plastic you can use to make everyday purchases without having a lot of cash on hand. But more than that, many credit cards offer rewards that you can redeem for travel and other things.
By using a travel rewards credit card, the money you spend on everyday items can go toward earning points, miles or cash back for future trips. If you don't know much about credit cards or the types of travel rewards you want, here's how to get started with travel rewards credit cards and what you need to keep in mind.
What Kinds of Credit Cards Earn Travel Rewards?
Travel credit cards come in four main varieties. When getting started with rewards credit cards and putting together your travel plan, think about the type of points or miles you can get the most use out of and then pick a card that earns them.
- Airline credit cards: This is probably the type of travel rewards credit card most people think of first. Airlines have frequent-flier programs travelers can use to earn miles when they fly, as well as when doing things like making hotel reservations or car rentals with partner companies. Airlines also partner with banks to issue what are called co-branded credit cards. These cards not only earn frequent-flier miles on everyday purchases, but some also offer benefits like free checked bags and priority boarding. For example, the Citi® / AAdvantage® Platinum Select® World Elite Mastercard® earns 2 AAdvantage® miles per dollar spent on eligible American Airlines purchases as well as on gas stations and dining, and offers cardholders preferred boarding and a free checked bag for themselves and up to four companions on the same reservation when flying American.
- Hotel credit cards: Like airlines, hotels have loyalty programs and may partner up with banks to offer their members co-branded credit cards. These cards earn points as well and offer benefits like annual reward nights and automatic elite status, which in turn includes perks such as room upgrades and free Wi-Fi during stays.
- Cash back credit cards: Some rewards credit cards earn cash back that cardholders can redeem for statement credits to lower their monthly bill. Certain cash back rewards cards offer a better rate of return specifically on travel, though. For example, the Capital One Venture Rewards Credit Card earns 2 miles per dollar spent on all eligible purchases. Those miles are worth 1 cent apiece when redeemed against travel charges, but may lose value if redeemed as statement credits for purchases in other categories. Still, if you're looking for a cash-back card for travel in particular, 2 cents back is a great rate of return.
- Transferable points cards: The fourth and final family of travel rewards cards earn what are known as transferable points that you can transfer to a number of different airline and hotel partners. One example is the Chase Sapphire Reserve® card. It earns 3 Chase Ultimate Rewards points per dollar spent on travel and dining and 1 per dollar spent on other eligible purchases. Chase Ultimate Rewards points transfer to 13 partners including airline programs like JetBlue TrueBlue and United MileagePlus as well as hotel programs such as World of Hyatt and Marriott Bonvoy. If you're not loyal to a particular airline or hotel, earning transferable points can be a great way to rack up rewards in a single loyalty program account and then transferring them to your choice of airline or hotel when you need them.
How Do You Pick a Travel Rewards Credit Card?
Not only are there four major categories of travel rewards cards out there, but there are dozens of individual products to choose from. Here are the factors you should consider when picking the right travel credit card for your needs.
- Make sure you can use the points or miles. First things first—you should choose a travel rewards credit card that earns the types of points or miles you will actually be able to use. After all, if you never fly United, why would you want one of its credit cards? Or if you tend to book at Hilton properties, you should get one of their credit cards and not one from Marriott so you can maximize your points earning during stays.
- Get a card with benefits you will use. By the same token as the previous point, think about whether you will actually use the other perks a rewards card offers. To take an example from above, Chase Sapphire Reserve® cardholders are eligible for up to $300 in statement credits each year toward travel purchases and can register for Priority Pass Select membership for access to over 1,200 airport lounges around the world. But if you don't travel enough to take advantage of these perks, the card's $550 annual fee may not be worth it.
- Focus on bonus categories. While many travel rewards credit cards earn 1 point or mile per dollar on most spending, a lot of them earn multiple points or miles per dollar on specific types of purchases, such as at restaurants, grocery stores, or gas stations. For example, the Delta SkyMiles® Platinum American Express Card earns 3 miles per dollar spent on Delta purchases and those made directly with hotels, 2 miles per dollar at restaurants worldwide and U.S. supermarkets, and 1 mile per dollar on other eligible purchases. So if you spend a lot on those things—Delta tickets, hotel bookings, groceries and dining out—then you could really start racking up rewards quickly. However, if you tend to spend more on things like car rentals and gas, this card's earning potential will not benefit you as much. Terms apply.
- Can you handle the annual fee? Many of the top travel rewards credit cards charge a fee each year to keep your account open. First, make sure you can afford the annual fee year after year. Second, think about whether you are reaping enough value from your card's benefits to justify paying that fee.
- Consider your credit. There are rewards credit cards for every type of customer, but you should understand the requirements of any specific card before you apply. The most premium travel cards generally require applicants to have excellent credit—such as The Platinum Card® from American Express, a card that provides a lot of valuable benefits (at the expense of a high annual fee). This card is not a traditional credit card, however, and you may only be able to carry a balance with certain charges. At the other end of the spectrum are cards with fewer perks and lower annual fees (or no annual fees at all). These are typically geared toward folks just starting out with credit who might need time to build their credit history and raise their credit score. You can monitor your credit for free through Experian and use Experian CreditMatch™ to find cards that fit your unique credit profile.
When to Apply for a Travel Rewards Credit Card
Now that you have narrowed down the choices and settled on one or two travel rewards credit cards, you need to pick the right time to apply. Your decision will likely be influenced by the following factors:
- A high welcome offer: Many credit cards offer approved applicants the opportunity to earn tens of thousands of bonus points or miles by meeting certain spending requirements within the first few months. However, these offers can change from time. For example, the American Express Gold® Card, another card that may only let you carry a balance for certain charges, is currently offering new cardholders up to 60,000 Membership Rewards points after they spend $4,000 on eligible purchases within the first 6 months of card membership. Applying for a card when its introductory offer is higher than usual can net you tens of thousands of extra points.
- Annual fee waived the first year: Sometimes, as part of the introductory package, travel credit cards offer to waive their annual fees for the first year. For example, the Delta SkyMiles® Gold American Express Card is currently waiving its $99 annual fee for the first year. That means you can apply for the card and carry it for a year enjoying its benefits before you have to pay an annual fee to do so. Terms apply.
- Low or 0% intro APR: Some credit cards offer an introductory 0% annual percentage rate (APR) on balances and balance transfers from other cards for a several months after you open your account.
For example, the Chase Freedom Unlimited® is currently offering new cardholders 0% intro APR on purchases for the first 15 months, after which the card's standard APR of 14.99% to 23.74% (variable) kicks in.
While you should always consider how carrying a balance can affect your credit in terms of your credit utilization, avoiding interest charges for short periods can be not only convenient, but extremely useful if your financial circumstances have recently changed.
- Whether you can pay off your balance in full every month: The final, and perhaps most important, rule for applying for and using travel rewards credit cards is to do everything possible to pay off your balance on time and in full every month. Doing so will keep your credit in good standing and even help raise your score over time. Carrying a balance can not only lower your credit score, the interest and late fees you rack up can wipe out the value from any points or miles you earn with your card.
Travel Rewards Credit Cards to Consider Now
You've looked over your options, winnowed them down to a few choices, and made sure that they all fit within your overall financial plan. Now it's time to apply for the right travel rewards credit card. Here are some options currently available with some great introductory offers.
Chase Sapphire Preferred® Card: Earn 80,000 Chase Ultimate Rewards points after you spend $4,000 on purchases within the first 3 months of account opening. Those points are worth $1,000 when redeemed for travel. Earn 2 points per dollar spent on travel and dining and 1 point per dollar on all other purchases, plus 5 points per dollar on Lyft rides through March 2022. The card's annual fee is $95.
Capital One Venture Rewards Credit Card: Earn 100,000 bonus miles after you spend $20,000 in purchases within the first 12 months of account opening. Earn an unlimited 2 miles per dollar on every purchase. Receive a Global Entry or TSA Precheck application fee statement credit of up to $100 once every four years.
Hilton Honors American Express Surpass® Card: Earn 130,000 Hilton Honors bonus points after you use your new card to make $2,000 in eligible purchases within the first 3 months of card membership. Earn 12 bonus points per dollar on eligible charges directly with a Hilton hotel or resort; 6 points per dollar at U.S. restaurants, U.S. supermarkets and U.S. gas stations; and 3 points per dollar on other eligible purchases. The annual fee is $95. Terms apply.
Citi® / AAdvantage® Platinum Select® World Elite Mastercard®: Earn 50,000 American Airlines AAdvantage bonus miles after making $2,500 in purchases within the first 3 months of account opening. The card earns 2 miles per dollar at gas stations, restaurants and on eligible American Airlines purchases, then 1 mile per dollar everywhere else. Its annual fee of $99 is waived the first 12 months.
Delta SkyMiles® Gold American Express Card: Earn 70,000 bonus miles after you spend $2,000 in purchases on your new card in your first 3 months. This offer expires 4/8/2021. The card earns 2 miles per dollar on Delta purchases, at restaurants worldwide including takeout and delivery and at U.S. supermarkets, then 1 mile per dollar on other eligible purchases. Its $99 annual fee is waived the first year.
Ready for Takeoff
Travel rewards credit cards can be a great way to rack up the points, miles or cash back you need to take the trips you want. When getting started with travel rewards credit cards, think about the types of points or miles you can use and whether you will be able to take advantage of the benefits of a specific card. Then be sure you can handle any spending requirements or annual fees, and can responsibly pay your balances off each month so that you get the full value from any rewards you earn. Use Experian CreditMatch™ to find out if you're matched to these cards with just a few simple clicks.
All information about the Citi® / AAdvantage® Platinum Select® World Elite Mastercard® has been collected independently by Experian and has not been reviewed or provided by the issuer of the card.