How to Choose the Right Travel Credit Card for You

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Please note: When you've decided to get a travel credit card, take the time to find the card that makes the most sense for you and your spending habits. The first thing to remember is that the most important part in maximizing any credit card rewards is treating your cards like cash. You must pay off your credit card balance every month or the interest rates will negate any benefit of your points.

There are a lot of cards out there and it can be a bit of a chore to sort out the best value based on your travel and spending style. To help you make the decision that's best for you, here are some of the questions you should ask yourself when you're looking for the best travel credit cards for you.

Do you need a general card or one tied to a specific brand? What is the best welcome offer? Which card gives maximum points for your spending profile? Can you justify the annual fee? Here are some details about how you can answer those questions based on your own travel style.

A co-branded or general travel rewards card?

First, you have to decide type of travel card you want and the type of rewards you want to earn. There are two main categories to consider here: co-branded travel credit cards and general travel rewards credit cards.

Co-branded travel credit cards are affiliated with a particular airline or hotel and often come with travel benefits. For airline cards, that can mean benefits such as free flights purchased with the points you earn, free checked bags, priority boarding, upgrade priority, and inflight discounts on purchased food and drinks. Hotel chain affiliated cards often include annual hotel credits toward a free night or automatic hotel loyalty program elite status.

Since co-branded cards help you earn rewards for travel purchases within a specific travel program, they're best suited for frequent travelers loyal to a particular brand.

General travel rewards cards give you points that you can use to purchase air or hotel stays, usually through the card issuer's own rewards portal. Also, many cards permit you to transfer their points to other airline or hotel programs directly, and then use the points with those programs.

You may also be able to redeem your rewards for statement credits, gift cards and select merchandise.

General travel credit cards are usually better for those who want flexibility and don't like being being tied to a specific airline or hotel brand.

If you are a frequent traveler to a lot of destinations, such as we are, it may not be a bad idea to have both a co-branded and a general card and use the one that makes the most sense for that particular trip.

Find the best welcome offer

Next, you'll want to choose a card with the biggest achievable welcome offer. A card with great welcome offer sometimes can justify the ownership of the card for several years.

Most all welcome offers come with a catch, i.e. a minimum initial spending requirement. Be sure you can meet the minimum spending requirement on any offer. For example, one typical welcome offer is 60,000 bonus points after you spend $4,000 on purchases in the first three months after account opening. Spending $4,000 in three months isn't a particularly difficult goal to achieve, but you still have to be sure you can meet that spending level or you won't get the bonus points.

Some cards have higher welcome points offers, but usually couple those with higher spending requirements. Finally, you'll also want to keep an eye on card offers on cards you're interested in. Sometimes you'll see special offers that elevate the bonus rewards for a limited time.

Optimize your bonus categories

Once you've found a card with the sign-up bonus that works for you, be sure that card has bonus categories that match to your everyday spending habits so that you can build up your store of points as efficiently as possible.

If you spend a lot in categories such as restaurants, grocery stores, or travel, get a card that earns multiple extra points per dollar spent in those categories. Obviously, most travel cards offer bonus rewards when you spend on travel. Most airline cards offer bonus points when you spend with that airline, and most general travel cards offer bonuses when you book travel through their travel portal.

Some other considerations when choosing your card benefits:

  • Does my credit card have no foreign transaction fees? Obviously, a credit card with no foreign currency fees, such as the Chase Sapphire Preferred® Card, is important for international travel. The best way to get the best foreign exchange rates is to pay with a credit card, and always pay in the local currency. Don't allow the foreign bank to convert your charge to dollars, or you'll end up paying their foreign exchange fee, which will be a lot higher. (Read how to get the best foreign exchange rates.
  • Does my credit card include (some) travel insurance? Many travel cards offer things like flight delay and lost or delayed luggage coverage. If that's important to you, look for that. Realize though that it's unlikely a credit card's limited travel insurance will cover illness or emergency evacuation. For that, you'll need a specific travel insurance such as Allianz Travel Insurance, which is what we use.
  • Does my credit card have rental car insurance? If you are going to be renting a car, this is a very handy benefit, although your own car insurance or travel insurance may include car rentals coverage. Your home car insurance, though, probably doesn't include rental car insurance in foreign countries. And, there are some countries where your credit card coverage doesn't apply. Be sure to check before you go.
  • Do I get airport lounge access? Because we travel a lot, and often have longish layovers, entry to airport lounges is a benefit we like. You'll usually find this included with more “premium cards” such as the American Express Platinum or Capital One Venture X.
  • Can I transfer points to other programs? This is a great benefit to look for. Many general cards will allow you to transfer points to specific airline and hotel programs, and sometimes that will benefit you more than using the points through the card's portal. It' great to have the option.
  • Some cards aren’t accepted as widely overseas as they are in the United States. The foreign payment network, rather than the card issuer, determines whether or not a merchant will accept certain cards. Visa and Mastercard are accepted just about everywhere, but American Express and Discover are not as popular with many overseas networks.

Welcome bonus offers and bonus categories and benefits will make up a big piece of how you earn rewards, so take the time to do your research.

Offset the annual fee with benefits

Finally, we recommend you only consider the cards with benefits that will justify an annual fee (if the card has one) and that you can get value the very next time you book a trip.

For example, some premium cards offer additional benefits and statement credits that can more than offset a very high annual fee. For example, some cards offer a monthly statement credit for things like Uber or Lyft rides, your cell phone bill, or even your home television streaming choices. Some premium airline cards offer companion tickets and an annual travel credit for fares purchased on the card. Some offer a statement credit to pay your application fees for TSA Precheck, Global Entry, or Clear. But if you can't take advantage of those perks and find yourself paying nearly $700 for benefits you aren't taking advantage of, the card won't be worth it.

There are plenty of credit cards with no annual fee, which is a good place to start. That said, most annual fees on cards can be more than offset if you're smart about how you use the card.

How it all adds up

With so many credit card possibilities, it can be a chore to find the one that's right for you, especially if you're a newbie in the points and miles game. In the beginning, you'll probably never go wrong opting for a general-purpose travel credit card if you're adaptable in your choice of airlines and lodging. If you are loyal to a brand, (or live in city dominated by a particular airline, like we do,) a co-branded card may be the right one for you.

The steps we've outlined above will go a long way toward finding the right card for your travel style.

And one last piece of advice: if you don't travel enough to make a travel rewards card worthwhile to you, be sure you look into a no annual fee cash-back card. That's one of the best ways to maximize your value on everyday purchases, including travel.

Opinions expressed here are author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.

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