5 Best Travel Reward Credit Cards
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There are few things as alluring as the promise of free travel to exotic destinations. The banks know this, and have long offered travel rewards to their customers for using their credit cards. In turn, savvy credit card users maximize their rewards to travel in comfort and style well beyond their means. (See also: How Travel Rewards Credit Cards Really Work)
Recently, I was explaining this to an European executive sitting next to me in Lufthansa’s Airbus A380 business class while returning home from a vacation in Italy. I told him that my family and I could not possibly have paid for our three $7,000 tickets for this flight. But thanks to my travel rewards credit cards, my journey was all but free after some taxes and fees. Through careful selection and use of rewards, these kinds of trips have become an annual occurrence for my family. While there are innumerable ideas, tips, and tricks to be gleaned from endless hours of research, my mission is to do the work for you and deliver only the most valuable advice to busy people who lack the time and patience to discover and decipher these deals. (See also: Cash Back vs Travel Rewards: Pick the Right Card for you)
Choosing The 5 Best Travel Rewards Credit Cards
It would be nice to pick the best travel reward cards in a purely empirical manner, the way one would choose a card with the lowest interest rate. Unfortunately, each travel rewards card offers a unique mix of benefits and drawbacks, and rarely is one card ideally suited for everyone's travel aspirations. I have read thousands of blog and forum posts, written hundreds of credit card reviews, and personally held dozens of different travel rewards cards over the last twenty years. In the end, I judge these cards based on three criteria:
- Value: The return in cents per dollar spent
- Flexibility: Cards that offer the most opportunities for redemptions -- no blackout dates, a variety of partners, etc.
- Costs And Fees: If fees are justified by its rewards and benefits
Of all the travel rewards cards currently offered, these are the ones I find most rewarding.
Chase Sapphire Preferred® Card
Chase Sapphire Preferred® cardholders are able to transfer their points to Chase travel partners at full value - 1,000 Chase points equal 1,000 partner miles/points. For most cards, some value gets lost during the transfer. This makes Chase's travel rewards the best in terms of value. Get double points for dining and travel transactions, and 20% off travel booked through Chase’s site. That means that their points are worth 1.25 cents for travel booked through their site. There are no foreign transaction fees, and the card is equipped with the Chip and Signature technology for enhanced security when using abroad. The annual fee of $95 is waived for the first year.
Sign up offer: Earn 40,000 bonus points when you spend $4,000 on purchases in the first 3 months from account opening. That's $500 in travel when you redeem through Chase Ultimate Rewards. Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening.
Discover it® Miles
A new travel rewards card from Discover which offers good rewards and flexibility in redemption. With Discover it® Miles, you earn 1.5x miles on every dollar spent on purchases. At the end of your first year, you'll get a huge bonus -- Discover will double all the miles you've earned. Essentially, that's 3x miles on all purchases for a whole year!
Miles can then be redeemed for statement credit on travel expenses, or deposited as cash into an account you designate. Unlike other travel rewards cards, you can book and travel whenever and with whoever you like, and use Miles to pay for those expenses. You're not limited to a specific airline or hotel, and you don't have to deal with blackout dates and limited award seats.
An additional benefit is you can get up to $30 a year of in-flight Wi-Fi fees credited back to your account. You'll also get a free FICO Credit Score on our monthly statements, to keep track of your credit. There are no foreign transaction fees, and there is no annual fee.
Starwood Preferred Guest® Credit Card from American Express
Don't mistake the Starwood Preferred Guest® Credit Card for simply a co-branded hotel credit card. The great thing about this card that earns you Starwood Points is that you can not only redeem them for hotel stays, but transfer them to airline programs for flight awards through American Express Membership Rewards. You also get discounted travel if you purchase or redeem tarvel through their travel portal. Earn up to 5 points on purchases charged directly with SPG hotels and resorts, and 1 point for all other purchases. Terms and limitations apply. The annual fee is $0 for the first year, then $65.
Sign up offer: Earn 10,000 Starpoints after your first purchase on the Card and an additional 15,000 Starpoints after you use your new Card to make $5,000 in purchases within the first 6 months. Terms and Restrictions apply.
Capital One® Venture® Rewards Credit Card
The Capital One® Venture® Rewards Credit Card is a simple travel rewards card that offers two miles per dollar spent on all purchases. Earn unlimited miles and redeem them for statement credit on travel purchases, allowing you to choose any airline or hotel. There is no annual fee for the first year. It's $59 thereafter.
Sign up offer: Get 40,000 miles once you spend $3,000 on purchases within the first 3 months, equal to $400 in travel.
Citi® / AAdvantage® Platinum Select® MasterCard®
For travelers who are fans of American Airlines, this card offers some nice rewards and perks. Get double miles on eligible American Airlines purchases. Also get Group 1 boarding, first checked bag free, and 25% off in-flight purchases. You also get 10% of your redeemed miles back (up to 10,000 miles each year). The $95 annual fee is waived for the first year.
Sign up offer: Earn 50,000 American Airlines AAdvantage® bonus miles after making $3,000 in purchases within the first 3 months of account opening.
No discussion of rewards credit cards is complete without the warning that these products are only best for those who always pay their balances in full and never incur interest. Everyone else should use the card with the lowest APR. That said, if you do pay your balance off every month, and you love to travel, then you have much to gain by applying for and using one of these top travel rewards cards. Join me in the exciting world of those who regularly travel for free.
My wife and daughter on one of our trips earned through travel rewards cards:
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by any bank, card issuer, airline or hotel chain.