Don’t get on board with just any credit card offering travel rewards. Here’s how to select the best card for your needs.

3 minute read

Who wouldn’t love to hop on a plane with a ticket you paid next to nothing for or stay several nights at a hotel without paying hundreds or even thousands of dollars? With a credit card that offers travel rewards, you can save big bucks on your next vacation, business trip or cross-country road trip. Don’t apply for the first travel credit card you come across, though.

Depending on your lifestyle and travel needs, always choose carefully when deciding on a card with a travel rewards program.

A reasonable annual fee

One person’s “reasonable” is another person’s “outrageous” annual fee, so the annual fee on the travel card you choose is important. There are many credit cards with no annual fee that offer points or miles that you can use towards travel. However, you’ll typically get a better rewards and benefits program and/or sign-up bonus with a card that charges an annual fee.

For example, a card may charge a $95 annual fee but offer more travel points or miles than you would get with a no-annual fee card. Other cards may charge an annual fee of $500 or more but offer exceptional travel benefits such as 5X points on flights and prepaid hotels, access to airport lounges worldwide and a sign-up bonus with a huge number of points to use towards travel.[1]

Ask yourself how much you plan to travel, which kinds of benefits you’re looking for in a credit card and whether the annual fee will be worth it in the long run. You may find that a no-annual fee or annual fee under $100 will cover your credit card and travel needs, or a high annual fee could be well worth the cost.

Big sign-up bonuses

There’s nothing like getting a jump start on travel rewards with a card that offers a whopping sign-up bonus.[2] Some cards may offer a of anywhere from $200 to $500 or 100,000 in points or miles that you can use for flights, hotels, car rentals and more.

Be careful with high sign-up bonus credit cards, though. You must usually make a certain amount of purchases – $4,000[3] within three months or $20,000 within 12 months after opening the credit card, for example –  with the card within a specific time frame. So, make sure you’re able to pay off any big balance you charge on the card in a timely manner. Otherwise, the high interest amount may outweigh any bonus or travel benefits gained.

[Find out: Debt.com’s Ultimate Credit Card Hacks]

Rewards program

When choosing a travel card, earning one point for every dollar spent isn’t going to do much towards covering your next vacation, flight or hotel. So, select a credit card that offers a rewards rate of at least 1.5% to 2% on spending. Also look for a rewards program that fits your lifestyle and travel needs, such as a branded card for a specific airline you usually fly or a hotel chain that you frequent.

No foreign transaction fees

If you plan to use a travel card for international travel, you can save money by choosing a credit card that doesn’t charge foreign transaction fees. Foreign transaction fees typically range from  1% to 3% on every purchase, and those fees add up fast while you’re enjoying a vacation, business travel or living abroad temporarily. On top of those fees, you could also be charged foreign currency conversion fees, raising the card’s balance even higher.[4]

Fortunately, you’ll find plenty of credit cards that don’t charge foreign transaction fees, so keep those fees in mind when shopping for the best travel card for your needs.

Travel protection benefits

Since you plan to travel using credit card points or miles, make sure the card comes with travel benefits you may need. These protection benefits may include rental car insurance, trip cancellation insurance, rental car insurance or reimbursement for lost baggage.


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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

Published by Debt.com, LLC