Choose the Best Travel Rewards Credit Card with this Guide

By Jason Steele. Last updated 15 September 2020. 0 comments

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So you’ve heard tales of people getting free travel through travel rewards from their credit cards, and you want in. But with hundreds of credit cards offered by dozens of card issuers, how do you get started with travel rewards? It can be quite a challenge to find the right travel rewards card for you needs. To narrow down your selection, it helps to divide all of the reward cards on the market into four groups:

  • Cards that offer statement credit for travel purchases
  • Cards that offer travel discounts or points transfer to loyalty programs
  • Co-branded cards that offer travel perks and miles redemption through specific airlines or hotels
  • Cards that offer premium benefits for travelers who want comfort and convenience

See also: Cash Back vs Travel Rewards: Pick the Right Credit Card for You

Cards That Offer Travel Purchase Credit

These are the most flexible travel rewards credit cards -- these cards offer points or miles that can be redeemed for most travel purchases. They offer the most flexibility because you don’t need to deal with award flights (booking flights with points/miles) or airline loyalty programs. You just use your card to book through whatever online booking site you want, or directly with the travel vendors, and redeem your points for statement credit at a 1 cent per mile/point rate toward those travel purchases. For those who want simple and flexible redemption, these are the best travel rewards credit cards.

Cards That Offer Travel Discount or Points Transfer

These credit cards offer two ways to redeem your travel rewards: booking travel through their branded travel portal, or transferring your points to loyalty programs. The catch is that you can only get flights and stays with the card partners. For example, Chase has 11 partners, including Southwest, United, British AIrways, Hyatt, and IHG. American Express cardholders can access Air Canada, Cathay Pacific, JetBlue, Virgin America, Starwood Preferred, Hilton, and more. Redeeming your points through their travel portal can get you more value for your points, or you can transfer your points to their partner programs, and book award flights through that. It takes a little more expertise and research to get the best deal and find what you’re looking for. But you’re likely to get more than 1 cent per point, which can be worth the extra work.

Co-branded Travel Credit Cards

If you're a frequent traveler with one particular airline or hotel, you will probably be best off using a co-branded card. By adding your credit card rewards to the miles you earn from flying, you will be able to earn free travel even faster. In addition, credit cards that are co-branded with either an airline or a hotel loyalty program can offer valuable benefits. For example, an airline credit card will frequently offer free checked bags, priority boarding and discounts on in-flight food and entertainment. Hotel cards frequently offer elite status in the hotel's loyalty program which can feature room upgrades, late checkouts and even free breakfasts.

Cards with Premium Benefits

The final type of travel reward credit card offers premium benefits for people who are looking for comfort and convenience when they travel. These cards offer airport lounge access, elite status with hotel programs, as well as a statement credit towards the application fee for the Global Entry program or TSA precheck. Typically, these type of premium travel reward cards have an annual fee of $400 - $450.

Which type is best for you?

For those who don’t travel often but want to rack up points for a cheap or free vacation, a card that offers a statement credit on travel purchases or discounts through its travel portal will be ideal. In addition, the programs that offer transfers to airline miles and hotel points can be great for award travel enthusiasts who really know how to get the most value from different frequent flyer programs.

But for loyal customers of a particular airline or hotel program that travel at least a few times a year, a co-branded travel rewards card will be the fastest way to earn free travel while enjoying benefits that make travel more convenient and comfortable.

The premium travel reward cards are for those who consider their benefits invaluable and are willing to pay a high annual fee for the advantages. And while these cardholders also earn flexible travel reward points that can be transferred to airline miles, the main reason to consider a card is for its perks like airport lounge access, personal concierge assistance, and more.

By understanding how different types of travel rewards credit cards work and examining how you will use a particular travel rewards card, you can choose type of card that will offer you the most rewards and benefits.

Disclaimer: The responses below are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.


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