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Best Travel Credit Cards

Michelle Brooks

Michelle Brooks

Financial Advisor

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In the 21st Century, travel credit cards are all the rage. Millions of Americans use travel cards to help enhance their travelling experience, or pay for it all together. It’s a great way to start accumulating credit towards flights, hotels, and other travel expenses. Travel cards allow you to accumulate various types of points when you purchase goods which can they be redeemed for travel in various forms.

In addition, many credit cards offer additional benefits such as free baggage, lounge access, and annual rewards flights. Most major financial institutions and lenders have partnered with various airlines and hotel chains to bring various travel cards to the consumer. You should make sure that you research all the industry leading cards before deciding on which car suites you best.

It’s important to note that travel credit cards normally have higher interest rates than non-rewards cards. This is largely due to the lender needing to offset the cost of the rewards provided to you. Many Americans with travel cards use them as their primary card so they can take advantage of the points they accumulate when spending. For this reason, millions of people carry balances on their travel rewards credit cards, which can be costly in the long run.

To take advantage of a travel rewards card you should be as responsible with it as possible. Paying large amounts of interest can offset the value of the rewards you receive. This article will delve into the various things to look for when deciding on which travel credit card to apply for. In addition, it will outline the advantages and disadvantages of having a travel credit card.

What to Look For

When deciding on which travel credit card to apply for, it’s important to consider the following factors: type of rewards, travel partner, points per purchase, and sign-up bonus.

  • Type of Rewards – There are two primary types of rewards cards: flight and hotels. The type of travelling you do will largely impact which card is more rewarding. If you tend to travel domestically, a hotel card may be more advantageous as there are often cheap domestic flights to various major hubs. While if you travel internationally, you may find that you will be better suited to a flight card, as long-haul deals can be harder to come by.
  • Travel Partner – This is important. If you already have miles with a specific airline, or points with a hotel chain, you should look to see if they have a partner credit card with a lender that can help you boost your rewards. Also, some credit cards allow you to accumulate points that transfer into various airline or hotel points, or simply be redeemed against the cost of travel.
  • Points per Purchase – Most rewards cards reward points a 1 point per dollar spent, while others have an increased multiplier for certain purchases. If you spend a lot of money at a particular store, or on a particular good, check to see if there are rewards cards with higher multipliers that might apply to you
  • Sign-Up Bonus – A lot of the value in a rewards card is derived from the sign-up bonus associated with the card. Seasonal offers sometimes include up to 100,000 points for signing up to a new card! Keep tabs on what lenders are offering credit card applicants, sometimes it’s worth the wait for the extra miles.
  • Interest Rates – This will depend on what type of borrower you are planning on being. If you’re planning on carrying a balance on the card, you should probably make sure that you get a card with the lowest rate possible. If you’re planning on paying your balance off in full every month, then just head for the card that has the best rewards possible.

 

Other Personal Factors that Determine Best Travel Card

Where You Live

Depending on where you live, certain travel cards will be different. This is similar to what was mentioned about travel partners. The best travel card for you will be one that suits your geographical location. For example, if you live in Houston, United Airlines based travel cards might be one of your best options. This is because United has one of their major hubs in Houston – they provide a significant amount of the international flights from the city. Be smart when choosing the best travel card for you.

How Often You Travel

This is a big one. If you’re someone that travels often, you won’t need to worry about this. But if you’re someone who might wait a couple of years before a big trip, then you need to make sure that you’re choosing the right card. You don’t want to get a travel credit card that has points that will expire quickly. This could lead to you accumulating points, only to have them taken away before your next trip. It’s important that you look into the expiration information on the credit card points that you’re considering signing up for. You should try and aim for points that don’t expire, or points that don’t expire for at least two years.

Size of Family

The size of your family is also an important factor when you’re trying to determine which travel card is the best for your family. If you’re single, this won’t matter, but if you have kids you should look for a card that offers them benefits as well. For example, some credit cards allow you to avoid paying extra fees for extra checked baggage. This is a nice perk for someone who has a large family to worry about – baggage costs can add up quickly.

Other credit cards offer companion flights, and some give out free business club passes for friends and family. These little benefits can help you get more out of your travel credit card.

Advantages

The advantages lie in your ability to accumulate substantial points for travel. These can be used to book flights, or upgrade to business and first class tickets. Some cards will often allow you free baggage on all flights if you have their partner card. In addition, partner cards offer huge sign-up bonuses that can pay off immediately. The best travel cards offer a truly unique amount of benefits. Peoplel take serious advantage of these cards – you can end up netting thousands of dollars in benefits if you use them correctly. They can make the entire travel process a lot more pain-free.

 

Disadvantages

The disadvantages lie in the higher interest rates the cards offer. In addition, because you feel you are accumulating points, you may justify spending extra money to get rewards. But this is not an economical decision. Points are worth very little, getting a few thousand points might not be worth the extra transaction costs that a vendor may charge you. Always make sure to do a cost benefit analysis on extra cost you take on to receive points. As long as you’re responsible with your card, there are relatively few disadvantages.

 

Insurance: The Hidden Secret

When people think of travel cards, they typically think of the point benefits that they receive. This is typically what is advertised to you when you sign up for a card. But with travel cards, there are often other benefits that aren’t as clearly displayed. Some travel cards will give you automatic travel insurance when you sign up for the card. Typically, you have to book all of your travel expenses using the card, but it’s still a great advantage. You won’t have to worry about paying extra to have your items and expenses covered.

Some cards will also include general purchase insurance. Which will provide you with theft or damage insurance for items that you purchase with the card above a certain amount. You’d be surprised at how many perks come along with some of these high-end cards. Make sure to read the fine print if you want to know everything that is included with the card.

 

The Hardest Cards to Get: Prepare

The reality is that travel credit cards are often some of the hardest credit cards to get on the market. This is a due to a range of factors, but is mainly down to the added benefits you receive. They also tend to have high credit limits, which means that you need to be better qualified to receive one. Lastly, credit card companies don’t make you pay off your balance to receive your travel points. This means that if you received a large sign-up bonus, redeemed it for a flight, and then defaulted on your debt, the credit card company would lose out.

Make sure that you prepare for any application that you decide to make. Follow some of the tips below to get in good shape.

  • Check Your Report – Even if you think you know what your credit score is, it’s always important to check your credit report before you make an application. Not doing so could result in a nasty surprise. Millions of Americans have false items on their credit reports – you don’t want to end up with a reduced score because of a mistake. If you do find an error, you can submit a form to the credit reporting body to have it removed. If you find that they’re being difficult, contact a credit repair company – it’s definitely worth it.
  • Reduce Existing Debt – One of the major contributors to your credit score is the percentage of credit you are currently using. The more of your current credit balances you use, the lower your credit score will be. Luckily, if you pay down your debt, your credit score can improve drastically in as little as a month. You’ll find that if you pay down a substantial amount, you might even see a 100-point increase in your score.

 

Process

Gone are the days of walking into your local bank branch to submit a credit card application. You can now do the entire process online. In fact, you can typically submit an application and receive a decision in less than 15 minutes combined. You will need to have all your personal information, including your social security number and income data, ready to submit through the credit card provider’s online portal.

While it may be very easy to submit your credit card application, this doesn’t mean that you should do a few at once. You need to decide on a card that you want to apply for prior to beginning the application process. Every time you apply for a credit card, it gets noted no your credit report and reduces your score – sometimes around 15 points. In addition, if you apply for a bunch of cards at once, creditors think that you’re trying to get capital for something desperate and will try and avoid lending to you.

 

Verdict

If you currently fly or stay with a particular provider, check and see if they have a partner card – it’s a great way to add to your existing rewards. Travel cards are some of the most popular cards on the market for a reason, if you’re a responsible spender, start turning your purchases into travel. The reality is that not having a travel card is a huge mistake if you’re someone who enjoys travelling and manages to pay off your balance in full every month. At any given time, there are a variety of cards with different sign-up offers and bonuses – make sure to stay constantly vigilant to get the best deal.

If you’re looking for the best travel card, we’ve done a lot of the work for you. Head to our homepage to check out the cards we recommend you apply for. We’ve done hours of research to find the most beneficial travel cards on the market. You can take a direct link to the application through our website. The longer you go without a travel card, the longer your wasting your expenditure on nothing. If you want to get the most from your wallet, a travel card tends to be the best choice.