Last Updated on June 1, 2021 by Mark P.
Everyone loves to travel. Seeing new sights, experiencing unique foods, and exploring fun destinations make going on a vacation one of the most enjoyable activities around. It’s a fantastic way to relieve stress, get away from the everyday grind, and recharge your mental batteries. Sadly, the problem is that many people don’t have the time or money to take these fun trips. While we can’t fix the time part, we can improve the money side. By picking the best credit cards for travel, you’ll be able to rack up free flights in no time – making that dream destination much closer than you ever imagined!
What makes for the best credit card deal when it comes to travel? Glad you asked! Let’s take a look at what these credit cards are and how they can help you get closer to relaxing on a lovely vacation, wherever that may be!
What Are Credit Cards for Travel?
If you’re in the market for a credit card, you’ve undoubtedly seen many different types of credit card offers. Some companies provide cashback, while others offer 0% APR for a few months. One common category of rewards is “travel.”
Of course, what encompasses “travel” varies from card issuer to card issuer. A Delta card, for example, might let you get free flights. On the other hand, a hotel card would get you free hotel stays and maybe some discounts.
One of the unique aspects of credit cards for travel is that these rewards can often work in tandem with each other. If you spend enough to get a free flight somewhere and then put enough on the other card to get a free hotel, you’ve got most of your trip for free!
Why Are Travel Cards So Popular?
If you go to any bank, you’ll likely see two types of credit cards: cashback and travel. These are the most popular reward categories for cards.
Many people like cashback cards for an evident reason – getting money back for spending money feels good! Spend $1,000 in a month, for example, and get $15 back. You get two or three free coffees at Starbucks, all for your usual day-to-day spending. It’s a great deal.
However, for the right segment, travel cards are often a better credit card deal. If you travel frequently or desire to start traveling more, the best credit cards for travel are the optimal way to see this country and the world.
The reason for this is because the right credit card for travel offers a better return than a traditional cash back card. Consider, for a moment, the venerable American Express Platinum card – one of our top-rated credit cards for travel and a fantastic deal all around. While the fee might be hefty, you receive:
- monthly Uber credits,
- access to the tremendous airport lounges that American Express has to offer,
- fee credits for TSA Pre-check or Global Entry,
- upgraded statuses with various hotel chains, and
- trip cancellation insurance.
In short, if you travel, there’s practically no better card to have than the American Express Platinum card.
Even the best cashback credit cards could not offer this number of perks to cardholders. Access to airport lounges and free upgrades for hotel loyalty programs are invaluable if you travel frequently. Unless you spend many thousands per month on your credit card, getting 1-2% back on your card will probably amount to $20 a month or something like that. All the perks above far exceed that value!
Travel cards are popular because they offer perfect perks for their target market – people who travel frequently!
Evaluating Credit Cards for Travel: How Do You Know You’re Getting the Best Deal?
As you may have guessed, there are numerous different types of travel cards on the market today. Some of them are better deals than others. How do you know you’re getting the best deal? Here are a few indicators that you’ve picked a sound credit card for travel.
It Has Rewards You Will Use
With cashback cards or low APR accounts, using the rewards is easy. If the financial institution sends you money, you’ll be able to use it! However, travel cards are much different. Since they tend to be limited to one or more companies, you need to make sure the rewards you receive will make sense for your lifestyle.
As a quick example, Southwest offers a credit card through Chase that lets you rack up Southwest Rapid Rewards points to use for free flights (you can also use them for car rentals, gift cards, and other perks). However, you’ll get the best deal if you fly Southwest. If you book most of your flights on Delta, the Southwest card probably isn’t the best option for you!
There’s no one-size-fits-all answer here, so think about a few things you’d like help with when it comes to travel and find a card that supports those.
The Perks You Receive Are Better Than Cash Back
One of the potential pitfalls of getting credit cards for travel is that they don’t have better rewards than just taking the money. Cashback cards have become quite aggressive now in the amount of cash back they offer. It’s not uncommon to see 1% as the base, with rotating 5% categories or fixed categories that earn 2-3% back.
Therefore, if you’re considering a travel card, you should get a deal that results in benefits that at least exceed the standard, attainable cashback cards.
One example card that meets this bar is the Chase Sapphire Preferred card. For starters, the introductory offer is phenomenal. There’s nothing quite like it on the market. If you spend $4,000 in the first three months, you’ll receive a $750 travel credit (yes, you read that right, $750 back on your first $4,000 in purchases!). Receive 2x the points with specific categories, so you’ll accumulate rewards even faster. Finally, you’ll get other fun perks like $0 delivery fees with DoorDash and a $60 credit for a Peloton membership.
While the card does have an annual fee, it’s hard to beat this value in the realm of cashback cards, so if you love to travel, this card is one of the best deals out there.
You Can Use Your Accumulated Rewards for Something Other Than Travel
One of the potential caveats with a travel rewards card is that you can only use those points for travel and nothing else. While you may think that you’ll use your points for this purpose and it’s not an issue, life can happen. Maybe you get busy with work, have a child, or decide that you want to take more stay-at-home vacations instead of hopping on a plane all the time. You don’t want to be in a “use it or lose it” mentality in any of these circumstances because then taking a trip doesn’t feel like fun. It feels like something you must do!
Therefore, when looking at credit cards for travel, ensure that you can use your rewards for something other than travel. Even if you never redeem them for a gift card or some other gadget, having that flexibility is essential, given that none of us can see into the future!
The Rewards Are Simple and Straightforward
Another potential pitfall of travel cards is the dreaded “blackout date.” You accumulate many points with the hope of going to Hawaii over the holidays only to find out that those dates aren’t eligible for a flight with points! You need to pay for that flight with cash. Now, you’re still spending money to travel, and you have all these rewards that you’ll have to try and use at some other point in time.
These cards are not the best deal. Before applying, try to understand the rewards structure as best as possible. Look for phrases like “restrictions may apply” or “subject to blackout dates.” If you see these, make sure you fully understand what those restrictions are. Most of the time, there’s a better card out there with no limits and a straightforward, simple points system. Even if it might cost you numerous points for that trip to Hawaii, you’re better off having a card that gives you that flexibility.
Why and How Do Credit Card Companies Give You These Perks?
Credit card companies provide these travel rewards for a couple of reasons. First, they incentivize people to use credit cards as opposed to paying cash. Every time you swipe your credit card, the merchant pays a small fee (usually something along the lines of 2-3% per transaction). A portion of that money goes to the card network, like MasterCard or Visa, and a part goes to the bank itself, like Bank of America or Chase. The banks then give you a portion of those merchant fees back in rewards. It works out for the bank because they make money, and it works out for you because you get some of that money back in the form of travel rewards.
Secondly, many travel credit cards provide perks oriented towards one airline, hotel, or other company. When you sign up for an American Express Platinum card, for example, you’ll get the best use of your Membership Rewards points through Amex Travel. Similarly, if you sign up for the Delta American Express, you’ll get Delta points that you can use for any Delta flight. For cards like these, the company has an incentive for you to use the card since it means future business for them.
Ultimately, companies can offer these incentives because it is in their best interest to do so! The travel companies who are beneficiaries of these rewards like them, so you’ll continue to use them for your travel needs. The credit card companies provide the rewards so you’ll use their card instead of paying cash or using another credit card. And you, the consumer, get to have some free trips for spending what you’d typically spend on your everyday items! It’s a win for everyone!
A Quick Note on Interest with Credit Cards for Travel
Getting travel rewards is a great feeling. It’s a tremendous benefit that you can receive for money that you would have spent anyway. However, please remember that no amount of travel rewards will ever exceed the cost you’d pay in interest charges. Most credit cards have APRs in the 20-30% range – whether they’re travel cards, cash back cards, or have some other rewards. On top of that, the interest compounds daily.
To put that in perspective, carrying a $1,000 balance at 25% APR and only making the minimum monthly payments means you’ll be sending payments over 11 years for a total of $1,498.87. At 28% APR, that number rises to 14 years for a total of $2,228.13.
So, if you’re not planning on paying off your credit cards every single month, you’re much better off with a lower APR card rather than chasing travel rewards! Please keep this in mind before you apply for any credit cards.
The Best Credit Cards for Travel Can Give You the Vacation of Your Dreams
The best deals on credit cards for travel will help you get the vacation of your dreams much faster and more affordably, all for spending money that you would have paid anyway. Imagine having a free flight to your dream destination or getting your hotel stay covered. These are the types of perks that are possible with travel reward credit cards.
Before signing up for a travel card, please look through our list of the best deals. At The Deal Experts, we’ve already done a significant amount of research on the market. Therefore, we can bring you the best rewards cards around. Please look through the list and see if there’s a card that works for you.
You may need to improve your credit score before applying for a travel rewards card. If so, please consider one of our top credit cards for bad credit. These cards can help you boost your score and get these travel rewards within reach!
Here are the best travel credit cards:
Highlights: Transferable points to other programs, 60k bonus points =$750 travel credit after spending $4,000 within 3 months, 2X points for spending on dining and travel. Some additional benefits are 25% more in travel redemption, 1:1 point transfer with select airline and hotel partners, travel insurance for select situations, car rental collision damage waiver, baggage delay insurance, travel emergency assistance, purchase protection, purchase protection, extended warranty protection, no foreign transaction fees and more. $95 annual fee. Good-Excellent credit needed. More Details & Apply
Highlights: 2X miles on every purchase + 10X miles for purchases at select hotels, 50k bonus miles after $3,000 spent within 90 days, $0 intro fee for 1 year, $95 after that. Up to $100 Global Entry or TSA Pre✓ reimbursement credit, miles transfer to 10+ partners, no foreign transaction fees, 24 hour travel assistance, car rental collision damage waiver, travel accident insurance, extended warranty protection and more. Good-Excellent credit needed. More Details & Apply
Highlights: $15 in Uber Cash per month plus $20 in December (towards U.S. Uber rides), 60k Membership Rewards points after spending $5k in the first 3 months, 5X Membership Rewards points on flights booked directly with airlines or through American Express Travel, 5X Membership Rewards points on prepaid hotel bookings made through amextravel.com, $200 airline fee credit on incidental fees charged to your American Express Platinum credit card, $100 statement credit when you apply for Global Entry (every 4 years) or $85 statement credit every 4.5 years for TSA Pre✓ (on each eligible card on the account), $550 in complimentary benefits with Fine Hotels & Resorts program, access to over 1,200 airport lounges in 130 countries, $100 in annual statement credit for purchases at Saks Fifth Avenue or saks.com, access to Platinum Concierge, access to By Invitation Only events, access to preferred seating for select cultural and sporting events and more added bonuses. Annual fee is $550. Good-Excellent credit needed. More Details & Apply
Highlights: 50k bonus Points after spending $4k on purchases within first 3 months, $300 annual travel statement reimbursement credit, 3X points on select airfare and hotels and 1X points on everything else, concierge, 50% more value when redeeming points through Chase Ultimate Rewards (points are worth .015 vs. .01 elsewhere), airport lounge access at over 1,000 lounges around the world and $100 statement credit every 4 years towards TSA Pre✓ or Global Entry. $450 annual fee. Excellent credit needed. More Details & Apply
Highlights: 50k bonus points after spending $2k in your first 3 months, 4X points at restaurants worldwide and U.S. supermarkets, 3X points for flights booked directly with airlines or on amextravel.com, 1X points on all other purchases, $100 airline fee credit, purchase protection, up to 2 years of extended warranty after manufactures 5< year warranties, preferred seating, personalized travel service, premium roadside assistance, car rental loss and damage insurance, travel accident insurance, dispute resolution, return protection within 90 days and more. $250 annual fee. Good-Excellent credit needed. More Details & Apply