Credit card combinations: Travel and cash back
Quick insights
- Pairing travel credit cards with cash back credit cards may help you increase your overall rewards earning potential.
- Applying for credit cards from the same issuer may allow you to combine rewards from different cards.
- You may want to consider potential annual fees and overlapping benefits when pairing credit cards.
Many credit cards offer the ability to earn accelerated rewards in specific spending categories. While some cards focus on travel, others provide cash back rewards on everyday purchases or rotating spending categories. Consumers may be able to increase their rewards earning potential by carrying more than one credit card and applying for cards that complement each other's strengths.
In this article, we'll explore the benefits and considerations of pairing travel rewards credit cards with cash back credit cards.
Benefits of pairing travel and cash back cards
Pairing travel credit cards with cash back cards can be an effective strategy for earning credit card rewards. By leveraging cards with individual strengths—one for travel purchases and the other for everyday spending—you may increase your overall rewards earning potential.
Travel credit cards typically earn the highest rewards for travel purchases like airfare and hotel stays. Cash back cards generally earn rewards as a specified percentage on most purchases with some categories earning cash back at a higher percentage (depending on the card). By pairing the two cards, cardmembers can use the card with the highest earn rate on any given purchase, therefore increasing the rewards they can earn.
Combining rewards from multiple cards
Many credit card issuers provide the flexibility to combine points or transfer rewards across multiple cards—provided the cards are from the same card issuer. This means carrying multiple cards from the same issuer could expand your redemption options.
For example, you could earn accelerated cash back on everyday purchases, like at grocery stores or gas stations, using one card and then combine or convert that cash back into points with your travel card. This allows you to pool your earnings, effectively turning your cash back into points that can then help cover future flights, hotel stays or other travel expenses—or vice versa. Cardmembers also could potentially convert their travel points into cash back. Note that these capabilities may depend on your specific credit card.
Choosing a cash back credit card
Understanding a credit card's specific earning structure can help you earn rewards more effectively. Cash back credit cards often provide a flat cash back rate on most purchases but may also have spending categories that earn cash back at a higher rate.
Redemption options for cash back cards often include statement credits, direct deposits or gift cards. Cardmembers may also be able to convert cash back rewards into travel with a compatible travel card.
When looking for a cash back card to complement your travel card, consider these features:
- High flat-rate cash back: Some cards provide a consistent cash back rate (e.g., 1.5% or 2%) on most purchases.
- Bonus categories: Many cash back cards offer the ability to earn accelerated rewards on specific categories like grocery store purchases, gas station purchases, online shopping or rotating quarterly categories.
- Welcome bonus offer: Some cards provide new cardmembers with a welcome bonus offer in the form of a cash back bonus. Cardmembers need to be eligible for the welcome offer and will need to meet minimum spending requirements within a specific timeframe to earn the bonus.
- Annual fee: Some cash back cards have annual fees, so you may want to weigh the card’s benefits vs. the potential fees before applying.
Choosing a travel credit card
Travel credit cards typically offer travel-related benefits—like travel protection benefits or elite status at airlines or hotels—and the ability to earn accelerated rewards on travel purchases.
When selecting a travel card to pair with a cash back card, some features to consider include:
- Accelerated earn rates for a wide range of travel bookings, such as flights, hotels, car rentals and rideshare services.
- Perks like airport lounge access, travel statement credits, complimentary upgrades or priority boarding.
- Travel protection benefits, which may include rental car insurance and potential reimbursement for trip delays or lost luggage.
- Statement credits for travel purchases.
Some travel credit cards also allow cardmembers to transfer rewards points to airline and hotel loyalty programs, often at a favorable 1:1 ratio, or sometimes even at an enhanced value.
Typically, cards with many benefits—like airport lounge access and travel protection benefits—have an annual fee. You may want to consider the cards perks and its fee to help determine if it's the right card for you.
Considerations of having multiple credit cards
While a multi-card strategy may increase your ability to earn rewards, there are a few things you may want to consider before applying for multiple credit cards, including:
- Annual fees: If you apply for a credit card that has an annual fee, you may want to consider whether the fee fits into your budget.
- Managing payments: Juggling multiple credit cards may mean keeping track of different billing cycles, payment due dates and minimum payment amounts.
- Overlapping benefits: If two cards provide similar benefits, you could be paying annual fees for redundant perks.
- Credit impact: New credit card applications typically result in a hard inquiry on your credit report, which can temporarily affect your credit score. Additionally, some issuers may deny applications if you've opened too many accounts recently.
In summary
Pairing travel and cash back credit cards may allow you to increase your rewards earning potential across multiple spending categories. This strategic approach can enable you to get more value from both your everyday purchases and your travel-specific spending.
Before pairing a travel and cash back credit card, you may want to weigh factors such as annual fees, the complexity of managing multiple accounts and the potential impact on your credit score associated with opening new lines of credit.
