Picking a Travel Credit Card
Everyone wants to get free airline tickets and hotel rooms and everyone wants to save as much as possible while traveling the world. With so many travel credit cards out there it might become a true pain to choose the one that fully suits your needs. As you face this huge amount of travel credit cards, each of them offers different perks. You may have noticed that some cards allow you to earn miles for little effort while other cards allow you to access airport lounges or get a good sign-up bonus. Since there are so many options to choose from, I have put together this post on how to pick a travel credit card.
Low Spending Minimum
Meeting the minimum spend is essential for earning sign-up bonuses. Some cards may offer you spend 3000 USD within 3 months, while others just 1000 USD within 6 months. A great way to meet a minimum spend on a travel credit card is to start using it everywhere. All your daily expenses such as groceries, internet bills, clothing, and gas should go on this card. However, it is so easy to go crazy and start spending money, which you don’t own or start buying things you don’t need. With this poor practice, free points and miles are no longer free. Only purchase what you normally would and don’t overstep your bounds.
Almost every travel credit card comes with a certain amount of sign-up bonuses that can be redeemed for free flights after you meet the minimum spending requirement. Usually, these sign-up bonuses range between 25.000 to 50.000 but can go up to 100.000. So even though a huge sign-up bonus is something to look for in a travel credit card, sometimes credit cards with lower mileage bonus may deliver greater flexibility among companies, no blackout dates or come with no-annual-fee. Pick the rewards package that fits your aims and lifestyle.
Flexibility is an important feature as it means that you can use the credit card anywhere and redeem your travel reward points with anyone and not tied with some particular hotels, or airlines.
Foreign Transaction Fees
When you withdraw cash from foreign ATMs, there are four types of fees you have to look out for. Naturally, fees vary depending on the bank, so it is quite impossible to avoid them completely while using ATMs overseas. Fees can be combined in different variations:
A flat fee from your home bank is a fixed fee that your bank charges for using ATMs outside of its network. These fees usually vary between $2 and $5 USD and veer toward the higher end for foreign withdrawals.
Not only do you usually have to pay a fixed fee to your bank, but you also have to pay a fixed fee to a foreign bank which owns the ATM you’re using. This again is usually in the range from 2 to 5 USD.
Instead, or in addition to a fixed fee, your home bank may charge a percentage fee for foreign withdrawals. These are in the range of 1-3%.
The ATM interbank network like Plus or Cirrus will also take 1% fee for currency exchange.
Chase, Capital One, Bank of America and Discover offer minimum fees for international transactions.
Low Annual Fees
Often times, travel credit cards come with $0 annual fee for the first year. However, after the first year is up, they require the normal fee again. Many are just milking these credit cards within a year and cancel them afterward to avoid paying fees. Surely, there are credit cards that have a 0 USD annual fee, no matter how long you decide to use the card. For instance, Bank of America Travel Rewards Card offers this option.
When you proceed with credit cards that offer no annual fees any advantages may be offset by higher cost of card issuance or higher interest rate for withdrawal in a foreign country. The fees for company branded credit cards range from 45-95 USD per year. It is possible to find credit cards with even cheaper service. However, in that case, service quality leaves much to be desired. Credit cards with annual fees render more options for faster bonus accumulating and better protection while traveling as well as they get better access to special offers and services.
While some cards are general travel credit cards that allow you to redeem points or miles for many hotels and airlines, if you travel frequently with only one airline, it may be wise to look into that specific airline’s card.
For instance, if you choose to get a credit card with Southwest, you won’t ever be restricted as to when you can fly. This card features no blackout dates, no restrictions, and no change fees. This could be a huge perk if you are a frequent flyer with this airline.
Special Travel Perks
Why should you only get miles when you can relax in an airport lounge or get a free drink or snack? Many travel credit cards will provide you with extra perks or give special elite status. There is always to choose from.
Some airlines offer credit cards that allow you to bring a free checked bag when you obtain a certain number of points. Other cards allow you to get free nights in the hotels or some other benefits. Certain credit cards with United Airlines feature priority boarding. This feature allows you to get on board and to be seated before everyone else.
Points Per Dollar Spent
Usually, most cards offer one point for every dollar you spend. But in this case, you have to spend thousands of dollars and a lot of time to accumulate enough miles for free flights. Be sure to get a card that gives you as many points as possible so you can redeem miles faster.
Some cards that have points earning systems depend on what you’re buying. If you get triple a number of points for buying petrol, but you live in a city where you only depend on public transportation, this feature would not be of much use to you.
What if I have a low credit score?
The travel cards that I have mentioned here will require a good or excellent credit score to get approved. Be sure to improve poor credit in order to get the good bonuses (your aim score should be 650 or higher).
Which Travel Credit Card Is the Best for You?
Depending on how you choose to travel, and how often you travel, some cards will make more sense. Be sure to weigh all factors of each card, in the end choosing the one with the most rewards that benefit you.
Chase Sapphire Preferred
You can earn 50,000 bonus points when you spend 4000 USD on purchases in the first 3 months from account opening. No foreign transaction fee
2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases
This card will be suitable for someone looking for a large sign-up bonus, who flies United, Southwest or Virgin Atlantic, someone who travels and has the Chase Freedom
Bank of America Travel Rewards Credit Card
The card comes with a sign-up bonus, too: 20,000 online bonus points if you make at least 1000 USD in purchases in the first 90 days – that can be a 200 USD statement credit toward travel purchases.
No annual fee and no foreign transaction fees
20,000 bonus points
1.5 points per 1 USD spent
Rewards accelerator if you bank with Bank of America or Merrill Lynch
Chase United MileagePlus Explorer card
30,000 bonus miles come after you spend 1000 USD on purchases in the first 3 months your account is open.
No foreign transaction fees
Two miles for each 1 USD spent on tickets purchased from United
$0 intro annual fee for the first year, then 95 USD
First checked bag is up to 100 USD value
American Airlines AAdvantage Card
Deliver 30,000 American Airlines AAdvantage bonus miles after spending 1000 USD in purchases within the first 3 months of account opening.
Annual fee 95 USD, waived for the first 12 months
No foreign transaction fees on purchases
First checked bag free on domestic American Airlines itineraries
Allow earning 2 miles for every 1 USD spent on eligible American Airlines purchases
Barclaycard Arrival Plus World MasterCard
Earn 40,000 bonus miles when you spend 3000 USD or more on purchases in the first 90 days from account opening.
No foreign transaction fees on purchases
Annual fee 89 USD, waived for the first 12 months
Earn 2X miles on all purchases
Great deal for someone who travels frequently, especially internationally, someone looking for a high rewards rate, who likes the flexibility of being able to book with any airline, hotel or cruise line
Starwood Preferred Guest Credit Card
You can get 25,000 bonus Starpoints after you use your new Card to make 3000 USD in purchases within the first 3 months.
No Foreign Transaction Fees on international purchases.
No annual fee for the first year and 95 USD after that.
High rewards rate
No foreign transaction fee
A large selection of airline transfer partner programs
For Travel I Recommend These Credit Cards:
- Chase Sapphire Preferred: Best Travel Credit Card
- Bank Of America Travel Rewards Credit Card: No Annual Fee
- Discover it Miles – Double Miles your first year: No Annual Fee Travel Credit Card
- Gold Delta Skymiles Credit Card: Airline Credit Card
- Starwood Preferred Guest Credit Card: Hotel Credit Card
- Priceline Rewards Visa Card: Travel Credit Card