Fuel Your Travels by Using Travel Credit Cards in 2018
According to a 2016 poll by CreditCards.com, only 15% of Americans put the cost of their vacations on credit cards — most people opt to use their savings. If you’re responsible with credit, travel credit cards will allow you to earn rewards and save money.
What to Look for in a Travel Credit Card
The right travel rewards card for you depends on your situation. With hundreds of card offers available, how do you know which one is for you? Consider these components that make up a great travel card.
Usually, travel cards award bonus miles or points if you spend a certain amount in a few months of opening the card. You can then use earned points to redeem different rewards. An example is receiving 50,000 bonus points after spending $3,000 in the first three months after opening a card. Booking a vacation with a credit card earns bonus points and miles that you can’t get when booking with cash!
Recommendation: The Chase Sapphire Preferred Card offers 50,000 bonus points (worth $500 or $625 when redeemed for travel) when you spend $4,000 in the first three months.
Foreign Transaction Fees
If you’re traveling out of the country, you should have at least one card without a foreign transaction fee. Card issuers might charge a fee when you buy something in a foreign currency. If there is a fee, usually it’s around 3%, which can add up quickly. Many travel credit cards don’t have a foreign transaction fee, though you should check the details to confirm if the card has a foreign transaction fee to prevent having to spend extra money while traveling.
Recommendation: The Barclaycard Arrival Plus World Elite Mastercard comes with no foreign transaction fees. It has Chip-and-PIN technology that’s supported more frequently, especially in Europe.
Many travel cards come with an annual fee that can range anywhere from $50 to over $500, though there are some card options available where you can earn travel miles without paying annual fees. However, you usually earn more points and have more benefits with cards that have an annual fee.
If you choose a card with an annual fee, make sure you’ll use it often enough to get enough value from benefits and rewards. If the annual fee outweighs the rewards and benefits, then consider a card without an annual fee.
Recommendation: The Discover It Miles card has no annual fee and doubles all the miles that you earn as a new cardholder in the first year. You get 1.5 miles for every dollar you spend and $30 in credit toward in-flight Wi-Fi per year.
Many travel credit cards come with travel-related benefits. There are usually better benefits on cards with higher annual fees. A few examples of travel credit card benefits are rental car collision insurance, automatic trip cancellation insurance, priority boarding, free checked bags and free room upgrades. When you are deciding which travel card is right for you, make sure to consider the benefits against the annual fee.
Recommendation: The Chase Sapphire Reserve Card offers many benefits, including a $300 yearly travel credit, TSA PreCheck application fee credit and special privileges on rental cars. However, this card has a $450 annual fee, so make sure you can maximize the rewards and benefits to outweigh the fee.
The Starwood Preferred Guest Card from American Express only has a $95 annual fee that’s waived for the first year. Also, this card offers benefits such as flight accident insurance, unlimited Boingo Wi-Fi and car rental damage insurance.
Travel credit cards are a great option for those who travel often and are responsible with credit cards. These cards allow you to earn points, miles and receive extra travel benefits that you wouldn’t get when using cash. Check details on credit cards to find the right fit for your own situation and preferences.
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