Travel Credit Cards: Miles, Points & More Miles
If you are a frequent traveler, then it makes sense to get travel credit cards. You get to earn points every time you use your credit card. Well, it depends on the rewards system of these credit cards – some reward you with points that you can convert into air flyer miles while others just convert the value of your credit card purchases directly into miles.
A few questions that come to mind include figuring out the best travel credit cards. Some even weigh in their minds if travel credit cards are for them or not. We’ll cover those details and more in the discussion below.
Top 4 Travel Credit Cards
Why Should You Get Travel Credit Cards
In today’s modern society it is a fact that credit cards are omnipresent. Everyone uses them to pay for practically anything you can purchase. You can use them to pay for your groceries, buy a car, or even just for a pack of gum.
It’s a fact the American people is a credit card loving people. It’s also pretty common to get a credit card offer in the mail. It sometimes makes you wonder how these card companies find out your address especially your financial details.
With the plethora of travel credit cards out there you may be wondering which one is the best. We can’t really say which credit card is the best since every single one of them has its own pros and cons.
Travel credit cards do not only get you free air miles. Airfares are the basic reward you can expect from these credit cards. Some rewards include hotel reservations, meals, and sometimes they offer cash for travel allowances.
What to Look for in the Best Travel Credit Cards
Travel credit cards aren’t a dime a dozen – it isn’t always easy to qualify for these cards. Some of them require a pretty high credit score so you can qualify for one. However, there are still a lot of available choices. Here are some of the best features that you should look for whenever you compare travel credit cards offers.
• Check the sign up bonus
You should remember that some travel credit cards carry sign up bonuses while other packages don’t have any. So, why settle for anything less? If they give you a couple of hundred dollars for just signing up then why not?
You can even find a way to double the amount of bonus you get for just signing up for credit cards for travel. If you qualify for one, then you can be sure that your spouse qualifies for one too. You can both sign up and get double the bonus points or cash (or whatever it is they offer as a sign up bonus).
Now, different travel credit cards have different rewards programs. That also means they may have different terms with regard to their sign up bonuses. Some bonuses are easier to get while others will bit a bit difficult. Here’s why.
If you are aiming for a really huge sign up bonus then expect the best travel credit cards to require you to meet some sort of a minimum amount as a spending requirement. That usually gets your mileage account jump started.
That means you need to spend the bare minimum stated in the terms and conditions to get you that free flight – some even offer first class flights. There are credit cards, the ones on the upper echelon so to speak, that will reward you with several free flights.
Big Tip: don’t sign up for travel credit cards offers that do not include any sign up bonuses. Of course, there is an exception to this rule – check out the fine print and see if the other rewards are worth it. That’s the only exception to this rule; so don’t just count out a travel card simply because it doesn’t offer a free sign up bonus.
So, how do these sign up bonuses work? A lot of times you will be required to make a one-time purchase so your travel miles get launched. Once you have it started you can stack up your spending until you reach the threshold.
Note that not all credit cards for travel will require you to reach a spending threshold. Again, one travel rewards program will be different from the other.
However, there are credit cards out there for travel that will require you to reach a spending minimum with a time limit. The time frame is usually around 3 months. Some credit cards have 6 months while others have a longer time frame (there are a few credit cards that will give you 18 months).
Once you reach the minimum threshold, you will then get your sign up bonus. After reaching the minimum spending limit, you will then begin to stack up on points that you can convert to travel miles. Some credit card rewards programs will make you earn 1 mile for every dollar spent while others give you more. You will find a lot of rewards programs that will give you 1.5 times the miles for every dollar spent.
Some credit cards, like the Alaska Airlines credit card (a branded credit card provided by the airline) will reward you a sign up bonus that amounts to 25,000 points. All you need to do is sign up for the company’s credit card and pay the annual fee – which is about $75.
Some credit cards can offer you double the bonus points upon signing up. For instance, Citi Prestige is a credit card that will give you 50,000 points. That’s a lot more than many of the travel credit card deals today can offer.
Of course, there is a catch (the really good rewards can be a bit expensive). The issue with this type of rewards program (and there are many like it) is that you need to spend around $3,000 in the first 3 months.
Some credit cards will require you to spend three thousand bucks to get the bonus, while others will have lower initial spending requirements. On the other hand, there are credit cards, like the Starwood Preferred Guest American Express, are just poor deals since they will require you to spend 3K dollars just to earn the same 25,000 points – and you have to spend all that in the first 3 months. Needless to say, just find a better offer.
Now, just a little FYI – the bonuses that these credit cards can offer will range anywhere from 25,000 points to somewhere around 50,000. Consider yourself lucky if you find an offer with 100,000 travel points in the mail. Yes, there are credit card companies that offer that many points as a sign up bonus. Just a reminder: the terms can be a bit steep though.
Well, whatever card you get, just remember that the best travel credit cards give you a huge balance of points for only minimal work. You can work your way to a free flight along the way.
• Category Spending Miles:
As stated earlier, most credit cards of this type will give you one mile for every dollar you spend. That’s already a pretty good deal. However, if you’re aiming for the really big bonuses, then get the best travel credit cards. They usually reward you with more points for spending the same amount of money.
Some of the cards that give you extra points or miles per dollar are branded cards. Look for credit cards for traveling that are provided by a specific airline. Of course, that means you will need to use their service when the time comes to claim the miles you worked hard to earn.
Note that some cards will definitely give you more travel points or air miles than others. Some will even give you as much as triple the amount of points for each dollar you spend.
A good example of these credit cards is Chase Sapphire Preferred. You get twice the number of points for every dollar you spend on selected restaurants and travel.
But Chase also has a travel credit card that rewards credit card holders with five times more points per dollar spent: Chase Ink. Of course, the requirements to qualify for that credit card will be quite steep. That means you should have a pretty good credit score to begin with.
A good example of cards that reward you three times more points as the dollars you spend is American Express Premier Rewards Gold. Note that some cards will reward you for purchases you make for your day to day needs. On the other hand, some cards will have purchase or expenditure categories or else your spending will not be included in the minimum expenditure count.
• Low Spending Minimum
We have already mentioned spending minimums on credit cards for travel. Note that the best rewards usually require a certain spending minimum. Of course there are ways to fake your credit card spending – but that is risky business and we won’t cover that here.
Best practice is always to use your travel credit cards for your normal daily spending. The usual spending minimum amounts range from $1,000 to $3,000. You need to spend that amount within a three to six month period.
On average, you need to spend around $1,000 a month using your credit card to really stack up on the spending minimum. Note that some credit cards offer easier terms like make one type of purchase in order to unlock a particular bonus. That’s basically easier to get compared to stacking up on spending costs.
The Exception to This Rule: As usual, there is an exception to this rule. You shouldn’t always ditch the credit card simply because it has a high spending minimum. Remember that the best travel credit cards may sometimes have the higher spending minimum. However, just check out the rewards that you can get from these cards.
They sometimes make the best offers. You will have to decide whether you will go for the high rewards or just settle for easier terms. It’s all up to you really. Go with whatever terms suit your spending habits.
Best practice: Start small and you miss small. A lot of folks won’t even qualify for the top travel credit cards offers even if they want to. That is why the idea is to start small.
Get the credit card that offers the best low minimum spending amount at first. Build up your credit history. Don’t try to grab every single credit card that you can find if you can’t meet the minimum spending amounts. You won’t get far with that strategy.
Remember that once you have been approved for a particular credit card, you won’t be able to reapply for it. There goes your sign up bonus. Signing up for a lot of cards means meeting a pretty high total minimum spending amount given a limited amount of time. Some folks get stuck trying to reach a total of $20,000 expenditure in just 3 months.
Spending more money just to chase after these points just defeats the purpose of getting these rewards. The key here is to manage your ability to reach those spending minimums. Only spend what you normally would with or without the use of the travel credit card.
• Look for Special Perks
All of the best travel credit cards offer some of the best perks you will find anywhere. Some perks will better suit you than others. Every card or award program is designed to meet the needs of different types of customers.
There are cards that will give you an elite loyalty status. Other will just provide you with extras on the perks that they already offer. Some will give you priority boarding – something that will be useful if schedules are tight.
On the other hand some airline credit cards offer free checked baggage. You will also find credit cards that offer you free night stays at partner hotels – these hotels are pretty good, not the shabby types.
Choose the card with the extra perks that you will most likely need. If you usually have problems getting hotel reservations then get the card that offers just that. Anything that will make life easier for you will be a big bonus.
• Compare the Annual Fees
Is there anyone on the planet who loves to pay annual fees on their credit cards? Can you spell crickets? Credit cards that carry a company brand usually have annual fees ranging from $50 all the way to $95.
That may not sound much but if you stack that up with the other bills you have to pay then that extra $50 or $100 will put a significant dent on your budget.
However, that doesn’t mean you have to dismiss every credit card that has an annual fee. The record shows that the credit cards for travel that has the best offerings usually have annual fees.
That sounds like a catch 22, but do a quick comparison. Find the annual fee that is most reasonable for your budget. If $99 is just too much, then go for the card that has a slightly lower fee.
The Issue with Foreign Transaction Fees
Foreign transaction fees tend to hurt your budget whether you notice it or not. The rate is usually around 3% of the purchase price. Credit cards are great tools if you want to take advantage of the exchange rate. Ideally, you can buy more stuff with your money.
However, if you make a lot of purchases from overseas sellers then the foreign transaction fees will kill your savings. The good news is that there are credit cards that have lower foreign transaction fees (sometimes they just waive it).
Now, if you want to just avoid foreign transaction fees, a good credit card to get is Capital One Venture Card. On top of that, this credit card doesn’t have an annual fee. However, the downside is that its rewards program isn’t that good.
Pros and Cons
Now that we have gone over the details of these travel credit cards it might be a good time to summarize their pros and cons. Let’s start with the benefits that you can possibly gain:
- You Basically Earn from Every Purchase: Every time you use your credit card, whether it is a transaction with a partner vendor or not, you will earn points. You can use your earnings to get a free flight or use them for perks when you go out and travel.
- You Can Enjoy Discount Rates: You will usually get a lot of rebate offers. Every time you buy something using your credit card you get a discount. Look for vendors that have partnered up with the credit card company and make sure to purchase your stuff from them.
- Free Travel: The idea is simple – you stack up on points you eventually get to travel for free.
- Add-Ons and Other Privileges: Other than air miles, you also get other perks like free board and lodging, travel insurance, and other exclusive privileges.
- These cards usually have a high annual fee.
- You need to have a high credit score (650 and below won’t cut it)
- Interest rates are usually variable depending on your credit card use and it is usually a bit high.
- There are limitations to the rewards. So, pay attention to the fine print so you do not get disqualified from getting a reward.
Take the time to compare travel credit cards. Not every card out there will meet your needs. Get the one that has perks that will make your life a lot easier.