How to leverage travel credit cards
Using a travel credit card is one of the simplest ways to earn rewards points and miles for travel. There's a variety of options on the market to help you obtain airline tickets, discounted hotel stays and more.
How do travel credit cards work
Travel credit cards earn you points or miles on qualifying purchases. You can redeem these rewards for specific travel benefits, such as first-class seats, hotel stays, cruise packages, gift cards, free meals and much more. That's the purpose of using this type of card over a debit card or cash. You can leverage travel credit cards by redeeming their travel related rewards for that type of expense, but we'll talk more about that later.
There are several credit card types that fall into the travel category, including:
- General travel credit cards: These cards are flexible because you can usually redeem or transfer their rewards for more than travel related perks and discounts. You may be able to redeem points or miles for cash back, and you also don't have to be loyal to one specific airline or hotel to earn rewards.
- Airline credit cards: If you're loyal to one specific airline, this might be your best option. Some airlines partner with banks and give loyal fliers the chance to earn points or miles on everyday purchases. The rewards programs of airline credit cards often allow you to redeem your points or miles for benefits on your favorite airline, including plane tickets, seat upgrades, early boarding, free checked bags and more.
- Hotel credit cards: When you book rooms with a hotel credit card, you may earn reward points at an accelerated rate. You could also have access to benefits offered exclusively to cardmembers, including complimentary breakfasts, room upgrades and access to special events.
- Business travel credit cards: Many hotels and airlines offer versions of their cards as business travel credit cards. They may reward you on your business purchases and may earn additional points or miles on flights and hotels. The redemption options are often very flexible and meet many business needs.
3 things to look for in a travel credit card
Depending on what you're looking for, each travel credit card has its own combination of benefits, perks and rewards. Comparing travel credit cards and what they include can become overwhelming, so knowing what to look for may help.
- Sign-up bonuses: These features might be most helpful in narrowing your search for the best travel credit card. A sign-up bonus requires that you meet a spending requirement, usually within the first few months, sometimes in addition to other terms. This bonus can be just what's needed to jump-start your earnings and get you closer to a free or discounted flight or hotel.
- Flight perks: If you're looking to make frequent or occasional flights better, these perks could be your deciding factor. Some common perks to consider are free checked baggage, priority boarding and lounge access.
- Fees that fit your budget: Keeping an eye out for cards with no, or low, annual fees or foreign transaction fees may be a good idea when you're looking at travel cards. Fee-based cards might sound off-putting; however, they may offer better reward tiers, which would help you accumulate rewards faster and might even justify the annual fee.
How to leverage travel credit cards and their rewards
To get the most value out of your travel credit card, you can choose from several strategies.
Meet the bonus requirements
If your card offers a sign-up or new cardmember bonus, the first thing you'll want to do is meet the spending requirement. In the time frame for that requirement, you might also have an option to accrue points on specific purchases or redeem bonuses more quickly.
Maximize your earnings
Using your card for specific purchases may help increase your rewards with many travel credit cards. They often offer multiple points or miles per dollar at specific merchants, such as grocery stores or gas stations, along with certain purchase categories like travel and dining. Know which purchases will maximize earnings on your travel card and spend responsibly.
Take advantage of its benefits
We've talked a lot about rewards, but travel credit cards come with different benefits. Get familiar with all of them if you're going to take full advantage of being a cardmember. Some benefits may include access to exclusive airport lounges, savings on a rideshare service, application reimbursement for Global Entry or TSA PreCheck®.
Know what your card covers
Many travel credit cards offer travel protection and coverage. This travel insurance can be a lifesaver and protect you when unforeseen circumstances that disrupt your travel plans. Credit cards that come with travel insurance may even reimburse you if your travel is affected by weather, health issues or other types of emergencies out of your control.
Pros and cons of travel credit cards
Benefits are great. Fees? Not so much. There are many pros and cons of travel credit cards, though. It's important to take a close look at these before deciding which one you'll apply for.
- In addition to earning points on other categories, travel credit cards let you earn extra points for airfare, hotels and other travel-related items, which may lead to significant savings.
- Many travel credit cards offer points or miles on everyday purchases, making it easy to earn rewards even if you don't fly often.
- Depending on the type of card you have, you may be able to access travel benefits: airport lounge access, travel insurance, annual travel credits and more.
- Some cards offer the opportunity to earn premium travel benefits in the hotel's loyalty program, such as free checked bags, room upgrades, early or late check-out and more.
- Redeeming rewards or exclusive perks for travel can help you split the cost of some travel purchases that would be too expensive to book with cash alone.
- You may be able to earn a sign-up or new cardmember bonus for the big trip you're planning.
- Travel benefits aren't the only rewards of travel credit cards. Some cards may allow you to redeem your points or miles as a statement credit on your card's balance.
- Some travel credit cards have high annual fees. The cards with no annual fees typically offer fewer benefits.
- Carrying a balance could become costly because travel credit cards tend to charge high variable APRs.
- Some hotel and airline programs have extensive loyalty program rules, making it complicated to redeem your points.
- Not everyone will be eligible for a travel credit card because some require a very good or excellent credit score.
- Some travel cards impose blackout dates or other restrictions when it comes time to redeem your rewards.
Finding the best travel credit card that works for you comes down to evaluating its rewards, perks and benefits. The more those fit your lifestyle and plans, the more you'll be able to leverage travel credit cards. Whether you're choosing a general travel card or one that rewards you for loyalty to an airline or hotel chain, there are many pros and cons. You'll find, however, that each card may offer savings, convenience and comfort.