Are travel credit cards worth it?
Travel credit cards may be a great way for travelers to enjoy perks while seeing the world. You could earn points for every eligible purchase, then redeem them for free flights and hotel stays. Keep in mind, some travel credit cards may include an annual fee. So figuring out if a travel credit card is worth it requires you to evaluate the cost of the card against the value of the perks, benefits and rewards that the card offers.
How travel credit card rewards work
Spending money with a travel credit card helps earn points or miles for every eligible dollar you spend. Travel cards may also offer points for the money you spend specifically on travel, such as airfare, hotel stays or car rentals. This could include other categories as well, such as purchases at restaurants, grocery stores and gas stations. Many travel credit cards also offer sign-up bonuses, sometimes called new cardmember bonuses, that allow you to earn extra points for spending a certain amount on your card within the first few months.
Once you have enough points or miles saved up, you may redeem for a free flight, hotel stay or deals in the credit cards rewards program. If you have an airline or hotel credit card, you may use your points or miles for rewards with that brand. General travel credit cards allow you to redeem rewards with multiple chains. Both general and co-branded cards may include a rewards program that features travel deals as well as deals on retail merchandise and gift cards.
How to tell if a travel credit card is worth it for you
Before getting a travel credit card, determine whether you'll make the most of the benefits and rewards offered. A travel credit card may be worth it if some of the following scenarios are true for you.
- You'll use the points and miles
- You already spend in those categories
- You'll use the annual travel credit
- You'll use the extra perks
- You can pay back your balance on time
- The benefits are worth the annual fee
You'll use the points and miles
One of the biggest benefits that travel credit cards have is the rewards you receive. When deciding if you should get a travel card, figure out whether you're likely to use the points or miles by looking at the card's rewards program. If it includes enticing travel deals that meet your need to get away, or discounts on merchandise you love, spending responsibly on your travel credit card may be very valuable.
You already spend in those categories
Many travel credit cards offer extra points for spending in popular categories including travel, grocery stores, and restaurants. Hotel and airline credit cards usually offer higher bonus points for hotel stays and flights with the affiliated brand.
Depending on the card, you may be able to accelerate the rewards that you earn. This means that you'll earn points more quickly and efficiently by spending money on travel and other bonus categories that you already spend money on. Bonus categories allow you to earn points on a specific spend category such as dining, travel, gas, etc.
You'll use the annual travel credit
An annual travel credit is a perk offered by some premium travel cards that you can use for your travel-related purchases. The Chase Sapphire Reserve Card offers a travel credit that some may find compelling. Note that this card has an annual fee.
You'll use the extra perks
Some travel credit cards give you added convenience during your travels with extra perks. General travel, hotel and airline cards may come with a variety of benefits, such as hotel room upgrades, lounge access, late checkout, priority boarding, discounts on baggage and TSA PreCheck® and more.
You can pay back your balance on time
The rewards you would receive from a travel credit card may only be worth it if you can pay it back responsibly. Before getting a travel card, you may want to make sure you're able to pay off your balance each month on time to avoid late fees and interest.
The benefits are worth the annual fee
Along with the rewards and perks, many travel credit cards come with an annual fee. The annual fee may be worth it if the value you redeem the points for is higher than the annual fee.
When should you get a travel credit card?
You can pair a great sign-up bonus offer with an upcoming trip
A sign-up bonus offers cardmembers bonus points for spending a certain amount of money on the card within the first few months of opening an account. For instance, you might earn 60,000 bonus points if you spend $4,000 on purchases in the first three months.
If you're planning to travel soon, using a travel credit card to pay for the trip could help you meet the spending minimum and earn the sign-up bonus.
Benefits for upcoming travel
Even if your next itinerary can't help you meet a sign-up bonus spending minimum, many credit cards include perks to make your travel more rewarding.
Hotel credit cards may include free room upgrades, complimentary breakfast and Wi-Fi or other on-site perks to make your stay enjoyable.
Airline credit cards may get you into an airport lounge or reduce baggage costs.
General travel credit cards, like the Chase Sapphire credit card Preferred & Reserved, may include travel protections like Auto Rental and Trip Cancellation and Interruption Insurance.
You're loyal to a hotel or airline brand
If you're already enrolled in a brand loyalty program for a hotel or airline, adding a co-branded travel credit card may help you earn points faster and allow you to redeem within the brand's ecosystem.
You travel often
If traveling is a regular part of your schedule, a travel credit card may help you earn points for expenses you already incur. When you include the perks from travel credit cards, you may make your travel even more comfortable. As you earn more points, the redemptions available through travel credit card reward programs may gift you free nights or free flights, along with other convenient travel perks.
Bottom line: Make your travel credit card work for you
A travel credit card could be worth it when you'll benefit from the rewards and perks with your travel. If you enjoy traveling and would benefit from the bonus points, having a travel card may help you make the most of your spending and future trips.
Do your research to understand which travel credit card fits your budget, matches your travel preferences and promises meaningful rewards, so you can select the travel credit card that is right for you.
