Tuesday, January 24, 2023

Is Travel Credit Card Worth It

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When Should I Get A Travel Credit Card

Capital One Venture Rewards Credit Card Review 2021 – Is This Travel Credit Card Worth It?

If you think you might want to apply for a travel credit card, it pays to take advantage of good timing. Here are some indications the timing might be right.

  • The annual fee is waived. Sometimes, as part of the introductory package, travel credit cards offer to waive their annual fees for the first year. These types of offers tend to come and go, though, so pay careful attention to the terms and conditions of any credit card you apply for to make sure it is one that includes this kind of savings.
  • Your credit has improved. Finally, and perhaps most important, many of the best travel credit cards are considered premium products and require applicants to have good to excellent credit. If you have been working to improve your credit score, now might just be the right time to finally apply for a new travel credit card.Before doing so, though, check your score , and see if it is within the average range for a specific card. One of the ways you can better your credit is to pay off your bills in full and on time every month. That will also ensure you’re not hit with late fees and interest payments that would wipe out the value of any points or miles you earn with your new card.

How Much Is A Point Or Mile Worth On A Travel Credit Card

Every point or mile from an airline, hotel or bank is worth a different amount, so you cant assume that a 50,000-point bonus on one card is equivalent to a 50,000-point bonus on another. Thats why The Points Guy maintains a guide to point and mile valuations, which explains how much each type of point and mile is worth. You can use those valuations to determine how much a sign-up bonus or bonus category is worth.

For instance, Amex Membership Rewards are worth 2 cents each based on TPGs valuations, which means the 100,000-point bonus on the Amex Platinum is worth $2,000. Thats because 100,000 x .02 = $2,000. And since that card earns five points per dollar on airfare, you can also determine that each dollar you spend on airfare will get you 10 cents back in points because 5 points x 2 cents = 10 cents.

One Last Tip About Travel Cards

Remember the credit score caveat I mentioned earlier? Its important because travel credit cards usually require at least a good credit score of 680.

If your credit score is below 680, youll want to improve your credit score before you apply. The best way to raise your score is to always pay your bills on time. Pay in full whenever possible. Avoid maxing out your credit cards in fact, keep your balances below 30% of your total available credit. Lastly, dont open too many cards at once and keep your old accounts open, even if you dont use them.

The bottom line? With responsible money management habits and the right rewards credit card, you can get access to incredible discounts on travel and potentially free hotel stays or flights or redeem for merchandise or cash. And next time your friend brags about their next vacation, you can share a tale or two of your own, too.

Our #1 Travel Card

  • 5X points on travel booked through Chase Ultimate Rewards
  • 25% more value when redeeming rewards for travel through Chase Ultimate Rewards
  • 10% anniversary point bonus each year
  • $50 annual credit on hotel stays booked through Ultimate Rewards
  • Premium travel protection benefits

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Can You Meet The Bonus Spending Requirement

For example, the 80,000-mile United Quest Card bonus requires new cardholders to spend $5,000 within three months of opening their account to earn all those miles, but the 20,000-mile United Gateway Card bonus only requires new cardholders to spend $1,000 within the same time period. The Quest card bonus is larger, but so is its spending requirement.

Depending on your budget and how you use credit cards, these sign-up bonus details could put extra rewards out of reach, or encourage purchases you cant afford. Before jumping on a large offer, make sure the spending requirement fits your budget.

The Balance created a spreadsheet template to make that process easy. Make a copy of the file, then enter the bonus offer details and your monthly spending information to trigger the calculations.

The Balance

Rent and mortgage payments are monthly expenses you cant easily pay with a credit card to help meet a bonus offer spending threshold. Because of that, we dont factor those living expenses into the spending requirement budget. If credit card payments are an option, the convenience likely comes with a 2%-3% fee.

Trip Cancellation And Lost Luggage Insurance

How to Maximise Your Points as a US Expat

Sometimes your trip just doesnt go according to plan. Maybe you had to cancel a trip due to an unexpected illness, but the tickets were non-refundable. Or more commonly, maybe the airline has simply misplaced your luggage. With the right travel credit card, you could be covered in both of these instances.

Trip cancellation coverage through the Chase Sapphire Preferred® Card, for instance, could provide you reimbursement for certain pre-paid, non-refundable travel expenses if a covered loss prevents you from traveling.

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How Do I Earn Points With A Travel Credit Card

You can earn reward points from purchases made at restaurants, grocery stores and gas stations, just as with regular credit cards. Travel credit cards can offer more lucrative reward points when making travel and dining purchases. The extra reward points you earn from either a general, hotel or airline credit card can accumulate quickly and can be used toward plane tickets, hotel rooms and more.

Cash Back Vs Points: How To Choose The Best Option

If you travel a lot, youll probably want to choose a points card. Frequent travelers often take great joy in maximizing their redemptions and taking full advantage of travel-related perks.

If youre loyal to one particular hotel or airline, you could get a lot of value out of a hotel or airline card. Otherwise, a points card that allows you to redeem with many different merchants will provide more redemption flexibility.

If youre looking for a no-fee rewards card, you may want tochoose a cash back card instead. And a cash back card could be a better choiceif you dont travel often or you just value a simple rewards structure.

But the best choice when it comes to cash back vs. points may be to find a card that offers both. Several cards that offer points will allow you to redeem them for cash. In addition to a cash back option, cardholders with the Wells Fargo Propel American Express® card can redeem points for such things as charitable donations, merchandise and travel.

So, yes, its possible to have your cake and eat it, too.

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Other Types Of Credit Cards To Consider

Travel credit cards aren’t for everyone. If you travel infrequently, you should consider alternative credit card options, such as cards with dining, grocery or gas rewards. There are cards that can provide up to 6% back in those categories, allowing foodies, meal-preppers and commuters to benefit.

Beyond rewards, you might benefit from a card that offers a 0% APR period. Some cards offer no interest for over a year on new purchases and balance transfers, such as the Citi Simplicity® Card with 0% for the first 18 months on purchases and balance transfers When used responsibly, these cards can help you get out of debt without high interest charges.

American Express Gold Card

Travel rewards credit cards: are the rewards worth it?
  • 4X Earn 4X Membership Rewards® Points at Restaurants, including takeout and delivery.
  • 4X Earn 4X Membership Rewards® points at U.S. supermarkets .
  • 3X Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.
  • 4X Earn 4X Membership Rewards® Points at Restaurants, including takeout and delivery.
  • 4X Earn 4X Membership Rewards® points at U.S. supermarkets .
  • 3X Earn 3X Membership Rewards® points on flights booked directly with airlines or on amextravel.com.

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Can You Easily Redeem The Travel Points

A travel credit card can be worth it even if you only travel once a year and if youre willing to redeem the points for that trip. However, no credit card is worth it if you cant easily redeem the points.

The average redemption value for most cash and travel credit cards is 1 cent each. However, travel redemptions can get a higher value through travel redemption bonuses and by transferring points to an airline or hotel loyalty program.

Your award travel redemption options can include:

  • Book upcoming travel: Redeem points through the credit card travel portal for forthcoming trips at a fixed redemption rate.
  • Travel statement credits: Can redeem points to reimburse recent travel purchases.
  • Point transfers: Can transfer points to participating airline and hotel loyalty programs. Booking directly from the carrier can help you get a better redemption value.

For example, the Chase Sapphire Preferred® Card makes each point worth 25% more for travel redemptions than cash rewards. This card also lets you transfer points at a 1:1 ratio to many airline and hotel programs. You can learn more in our detailed Chase Sapphire Preferred review.

When comparing redemption options, decide if you want the opportunity to redeem your points for multiple travel brands instead of a specific airline or hotel.

The Best Travel Rewards Credit Cards

With so many credit cards to choose from, which ones do you pick? Well, the short answer is all of them. Grab as many as you can. Why put a limit on how many points you can get?

But the longer answer is dont get more than you can manage. Build it all up slowly. Here is a list of my favorite travel credit cards:

A longer list of my favorite credit cards along with all their sign-up details and perks can be found by clicking here.

Getting a travel credit card is simple and easy to do when you follow the steps above. Once you know your goal, you can easily find the card that matches the goal and the perks you want. Dont leave money on the table! Get a card, collect points, save money when you travel, and learn to travel for free!

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% Intro Apr Credit Cards

A 0% intro APR credit card doesn’t charge interest for an introductory period. There are two types of 0% intro APR credit cards:

  • 0% intro APR credit cards: These offer a 0% intro APR on purchases. They’re useful if you need to make a big purchase that you can’t pay in full right away.
  • Balance transfer credit cards: These offer a 0% intro APR on balance transfers. They let you refinance credit card debt and avoid interest charges for the length of the intro period.

There are also credit cards that offer a 0% intro APR on purchases and balance transfers if you need both.

Who Should Apply For This Type Of Card

Best Premium Credit Cards for Travel Rewards

If you’re interested in submitting a travel credit card application, keep in mind that card issuers usually require you to have good credit or excellent credit . Therefore, it’s key to check your credit score before applying for a travel card.

Once you know your credit score and can check if you prequalify for a travel card, choose the best card for your needs and apply.

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The 5 Best Starter Travel Credit Cards

As promised, here are our top picks for the best travel credit cards for beginners:

Chase Freedom Unlimited $0 Earn a $200 cash back bonus after spending $500 in the first 3 months, plus earn 5% cash back on grocery store purchases
  • 5% on travel purchased through Chase Ultimate Rewards, 3% on dining and drugstore purchases, and 1.5% on all other purchases

Capital One Venture Rewards Credit Card: Best For Earning Miles

Why this is the best stand-alone travel credit card: With the Capital One Venture, youre earning 2x on every purchase. That makes it easy to rack up rewards without having to juggle different bonus categories or spending caps. And with flexible redemption options and a manageable annual fee, this card is an excellent choice if youre looking to keep just one credit card in your wallet for all spending.

Current sign-up bonus: Earn 60,000 bonus miles after you spend $3,000 on purchases within the first three months of account opening. Since we value Capital One miles at 1.7 cents each, this offer is worth potentially $1,020.

Rewards rate: Earn 2 miles per dollar spent on every purchase.

Travel benefits: You get an application-fee credit for Global Entry or TSA PreCheck of up to $100 every four years, a nice perk for a mid-tier card that only costs $95 a year.

Annual fee: $95

Why its worth it: The Capital One Venture Card allows you to redeem miles for a fixed value or transfer the miles you earn to 16 total airline and three hotel transfer partners, including Avianca, Etihad, Turkish Airlines and Singapore Airlines. Capital One has recently added a new 1:1 transfer tier for many partners, however theres also a less lucrative 2:1.5 or 2:1 transfer tiers for some partners. Finally, its the one card The Points Guy himself, Brian Kelly, cant live without.

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What Features Make A Travel Rewards Credit Card Good

Sara Rathner, NerdWallet:

Generous ongoing rewards on common spending categories is something I look for, because a sign-up bonus, while lucrative, can only get you so far. NerdWallet’s 2019 Travel Credit Card Study found that a 50,000-point bonus can cover about 1.6 flights, depending on where and when you travel. If you want to offset a trip in a more major way, you need opportunities to earn more.

Easy redemptions are also really important. No one wants to navigate a maze of rules and restrictions. Those points are yours, so you should be able to spend them without sweating the details.

Luis Rosa, CFP:

Airport lounge access, a statement credit toward Global Entry or TSA PreCheck, and a significant bonus point incentive during the first couple of months.

Sarah Silbert, Personal Finance Insider:

It needs to offer benefits that are useful for you, so it ultimately depends on how you travel and what perks you value. But a few key things to look for are a high welcome bonus, strong bonus rewards in your top spending categories, trip protection such as trip cancellation insurance, and no foreign transaction fees. Good premium travel credit cards should offer higher-end benefits such as airport lounge access and annual travel credits as well.

Benét Wilson, The Points Guy:

Are Cash Back Cards Better Than Travel Credit Cards

Annual Fee on Travel Credit Cards – Is It Worth It? [Credit Cards for Beginners Explained – Part 5]

Cash back credit cards may not offer points specifically for travel, yet they do let you redeem for statement credits that can be used to cover travel expenses. With that said, travel credit cards tend to offer a lot more perks specific to people who fly or stay in hotels. There is no “right” or “wrong” rewards credit card to sign up for, so make sure to compare both types of cards before you decide.

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Capital One Spark Miles For Business

Good for: Business Travelers

Earn 2x miles on every purchase. Youll also get a 50,000-mile bonus after spending $4,500 within three months of account opening. This card charges $95 annually, but the fee is waived your first year.

50,000 bonus miles after spending $4,500 within three months of account opening 2x miles on every purchase $95, waived the first year

Not Applying At The Right Time

Hand in hand with Mistake #1 is not applying for a card when it is offering a good bonus. Like just about everything in life, welcome bonuses come and go and rise and fall periodically.

For example, via the CardMatch Tool, some customers have seen elevated, targeted offers as high as 125,000 points on The Platinum Card® from American Express when they spend $5,000 in the first six months of card membership. Compare that to the current public offer for the card, which is just 75,000 Membership Rewards® Points after you spend $5,000 on purchases in your first six months of card membership.

Similarly, the Hilton Honors American Express Surpass® Card, and The Hilton Honors American Express Business Card are all offering their highest-ever introductory bonuses, with the Hilton Honors American Express Aspire Card,up to 150,000 bonus points after spending $2,000 within the first three months for the Business and Surpass versions, and after spending $4,000 in the first three months with the Aspire. Plus, the Hilton Honors Surpass and Hilton Honors Business cards come with a $150 statement credit after your first purchase within the first three months of account opening. Thats a lot more points and money than usual.

So do your homework and look at the bonuses offered historically on cards before applying to make sure youre getting the best deal.

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Unique Benefits Offered On Travel Credit Cards

Using a travel credit card to accumulate points or miles is a no-brainer for many people. If you are already spending the money to buy something, it just makes sense that you earn something back while youre doing it. In the case of travel credit cards, getting points and miles for your regular purchases may mean that you can take vacations you otherwise could not afford. What many people may not know is that beyond the miles and points, travel credit cards offer some perks that can help make your lifeand your vacationeven better. Read on to learn more about the unique benefits offered by travel credit cards.

Large bonuses

If you are new to the world of travel credit cards, you may not realize that you can rack up points or miles quickly by taking advantage of bonus programs. These range from large sign-up bonuses to getting miles just for spending a certain amount of money within a specific time frame.

Companion fares

If you like to travel, chances are good you dont necessarily want to go alone. Thats why are so popular. Depending on the card, you could get a free or heavily discounted plane ticket for a friend or loved one. These benefits are offered by credit cards that are affiliated with a specific airline, and each travel credit card has a different way to get the companion fare.

Travel insurance

Free checked bags

Free nights at a hotel

> > Read More:Best hotel credit cards

Great exchange rates

Lounge access

Concierge services

Annual travel credits

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