Finding the Best Travel Rewards Credit Card

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Shorter Version


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The best travel rewards credit card can earn you points for hotels, airfare, and transportation, or even cashback on everyday purchases. The perks vary depending on the card, and there are dozens available from various issuers.

Among the best travel rewards cards

The Chase Sapphire Preferred card is among the most popular for long-term travelers, offering points that can be converted into miles or cash. The Capital One VentureOne Rewards card offers many of the same benefits for no annual fee, but only in miles meant for travel. If you travel frequently with a certain airline, search for an associated card to potentially fly for free.

Whichever card you pick…

Remember to make sure you pay your balance off in full every month. A travel credit card is a huge asset toward your adventure and vacation dreams, provided you use it correctly and don’t treat your credit line like a free vacation. You earn points on the money you spend – don’t go overboard trying to earn rewards!

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Longer Version


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There was a time when the best travel rewards credit cards were only for business travelers and luxury tourists. Now, with airfare cheaper than ever and banks eager to retain clients, these specific types of credit cards come with a variety of perks and partnerships to suit every traveler.

A basic rewards credit card offers points on purchases that can be converted to cash. A travel credit card is a specific kind of rewards card that offers more value for points when you spend on travel-related items – hotels, plane tickets, and restaurant meals, for example. If you use the points on travel expenses, you’ll often earn even more discounts. Let’s look at how this works with one of the more popular travel rewards cards: The Chase Sapphire Preferred.

The basics of travel reward credit cards

Note: A Guide For Your 20s is not associated with any bank or credit card.

It’s impossible to say which travel credit card is the best, however, in terms of popularity, Chase’s Sapphire Preferred ranks high among everyone from the once-a-year traveler to long-term expats. It’s a good example of what a travel rewards credit card can and should do.

Like most rewards cards, Chase Sapphire Preferred gives you points on your purchases. Each point is worth about a penny and can be converted later into money in your account. For each dollar you spend on travel or dining out, you’ll earn two points. All other purchases net you one point per dollar.

You can already see how travel turns into an advantage here. What’s more, when you book flights through Chase’s travel site, your points are worth 25% more. 100,000 points become $1,250 – enough to get you wherever you’re going, and then some.

There are other benefits to the Sapphire Preferred card.

After you spend $4,000 on your first month, you’ll receive 60,000 points – more than enough to accommodate the annual fee. Since it’s a card meant for travelers, Chase provides trip delay reimbursement, baggage delay protection, and other safeguards for peace of mind abroad. Perhaps best of all, there are no foreign transaction fees, meaning you won’t be charged when you use the card outside of the US.

These are all nice benefits compared to traveling with a debit card or general rewards credit card. With all of this in mind, it may seem like you’re getting, essentially, free money.

So what’s the catch?

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It’s still a credit card

Financial institutions want you to use your credit card as frequently as possible. The more you spend, the more points you earn – and the more likely you are to rack up credit card debt.

There’s one essential rule when it comes to credit cards: pay off your monthly balance in full. The interest rate on credit card debt – known as the annual percentage rate, or APR – can be anywhere from 15 to 25 percent or higher, depending on your credit score. You don’t want to end up owing money in pursuit of winning points.

Credit card debt kicks in when you don’t pay off your balance.

It’s a common cause of bankruptcy, not to mention financial stress. Banks and financial services offer rewards cards to entice you into spending money you don’t have. The perks they offer are a drop in the bucket compared to how much you could end up paying them in interest.

When you pay off your balance in full every month, you rack up rewards points, not debt. It’s that simple.

The best card for you

Rewards credit cards exploded in popularity after the 2008 financial crisis. Financial institutions make less money nowadays on mortgages and other formerly-reliable income streams. Profiting off consumer debt is easier and more effective. As such, they have cards for every kind of traveler.

Talk to your bank or financial advisor to see which cards you’re qualified for. Once you have a list of options, decide how you want to maximize your rewards based on your spending.

Instead of points, some cards offer miles, which can only be used for flights.

You’ll get 1.25 miles for every dollar you spend on the Capital One VentureOne Rewards card, for example. There’s a 5,000-mile sign-on bonus and no annual fee. It’s a popular option for people who fly frequently. If you qualify, you can also try the Venture Rewards card, which offers 2 miles for every dollar, though it has a $95 annual fee (waived for the first year).

You may have a preferred airline, especially if you fly domestically. American Express offers a range of cards for frequent Delta flyers. Citi has a partnership with American Airlines, while Visa offers cards for United and Southwest, both through Chase bank.

If you have a strong credit score and don’t mind a higher annual fee, Chase offers a Sapphire Reserve card with benefits beyond the Sapphire Preferred, including a points bonus worth $300 at sign-up and reimbursement for TSA Pre-Check. You’ll get triple points on dining and travel; the Sapphire Preferred only offers double points. This is a premium travel card with higher qualification standards.

These are just a few of the dozens of cards out there. You could spend days or weeks browsing through all the different pieces of plastic you could put in your wallet. To save time, follow the actionable steps below, and start earning points as soon as you can to travel for free in the future.

Actionable Steps


1

Evaluate your spending

Maximize your points by opting for a card that works for you. If you eat out and travel a lot – or plan to – look for a card that offers double or triple points on those expenses. If you fly frequently with a certain airline, a card with the airline’s name in the title is a key asset. Know the pros and cons of a few cards that appeal to you, then narrow your decision.

2

Know the benefits

Make sure you know what the card costs. Most have an annual fee ranging from $100 – $500, although some are fee-free, and some waive the fee for the first year. In addition to points or miles, look for cards with travel insurance, no foreign transaction fees, and additional perks that suit your interests.

3

Talk to your bank

Your options vary depending on your credit and income level. The card issuer decides if you’re approved or not, and what APR you’ll receive. Even if you are approved, make sure you understand the terms of use. Don’t be afraid to decline an offer if it’s not as substantial as you expected.

4

Stay informed

If you really want to get into maximizing credit card points and miles, ThePointsGuy.com provides endless updates on credit cards, travel deals, and other related content. For guidance specific to personal finance, NerdWallet.com is a popular source for easy-to-understand content. Read updates and emails you receive from your bank; you don’t want to miss any changes, good or bad.

5

Always pay your monthly balance

The most important rule bears repeating. Never take on credit card debt. Even a low APR is still in the range of 15% – an interest rate you’ll want to avoid.
 
A rewards credit card offers substantial advantages over cash and credit. The only way problems arise is when you spend more than you have. Otherwise, enjoy your benefits and look forward to cheaper or even free travel just by spending wisely.

About the Author


Michael Power

Michael Power

World-Traveling Expatriate

Since 2012, Michael has been living abroad full-time as a world-traveling expatriate. He spent his early 20s as an international high school teacher in South Korea. After visiting over 20 countries he’s excited to share what he’s learned with other aspiring nomads. You can currently find him in South America, probably at the nearest salsa club.
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