Travel Rewards Credit Cards: An Overview & Featured Cards
If you’re hoping to extract maximum value out of your annual credit card rewards haul, you should consider making a travel a priority.
That tidbit of wisdom comes courtesy of the most recent CardHub rewards report, which confirmed that travel rewards were still the most fruitful option among rewards redemptions. According to the CardHub.com survey, aptly named the 2015 Credit Card Rewards Report, points redeemed for travel in 2014 yielded approximately 1.05 cents each while points redeemed for cash back and merchandise yielded .82 cents and .66 points respectively.
Different Types of Travel Credit Cards
While that’s good news for anyone who wants to travel for free, it doesn’t make the process of selecting a travel rewards card any easier. That’s why it’s important to learn as much as you can about the various type of travel cards before you sign up. The following list includes the different types of travel cards that are on the market today:
Hotel Credit Cards – Co-branded hotel credit cards offer some serious perks and sign-up bonuses to customers who meet certain spending requirements. Those perks can include anything from easy-to-redeem free nights to hotel loyalty points that can be redeemed for free hotel stays, room upgrades, and more. With hotel credit cards, points are generally accrued based on your everyday spending, although spending in certain categories can result in higher earnings with certain cards.
Airline Credit Cards – Airline rewards credit cards offer frequent flyer miles to customers who use their cards for everyday spending. Like hotel credit cards, many also offer a sign-up bonus to customers who are able to meet specific minimum spending requirements within the first few months of card ownership. Frequent flyer miles earned can then be redeemed for free domestic or international travel, seat upgrades, and other rewards.
Fixed-Value Travel Cards – Fixed-value travel credit cards let you earn points that are redeemable for a fixed amount of travel. In most cases, the points are worth 1 cent each and can only be redeemed for purchases that code as travel expenses. Hotel stays, airfare, and train tickets are expenses that easily qualify. Most sign-up bonuses offered by fixed-travel cards are worth 40,000 points, or $400 in travel.
Flexible Travel Cards – Unlike other types of travel cards, flexible travel cards offer points you can redeem in a number of ways. Cards that fall into this category typically take part in a flexible rewards program like Chase Ultimate Rewards, American Express Membership Rewards, or Citi ThankYou Rewards. You can use these points to book travel directly through a travel portal, which works similarly to the cash back rewards credit cards in that you can redeem your points for cash back or merchandise, or transfer them to a hotel or airline partner.
Featured Travel Rewards Credit Cards
Great For: Travel, Rewards, Balance Transfers
Annual Fee: No annual fee*
- 0% Intro APR on Purchases and Balance Transfers for 15 months. After that, the variable APR will be 13.24%-23.24% based upon your creditworthiness*
- There is a balance transfer fee of either $5 or 3% of the amount of each transfer, whichever is greater.*
- 2 ThankYou Points per dollar spent on dining at restaurants and entertainment
- 1 ThankYou Point on other purchases
- Points do not expire and earn unlimited Thank You Points
- Redeem ThankYou Points for merchandise, travel rewards, gift cards, cash and more
- Travel with ease and enjoy global acceptance with Chip Technology
- No annual fee*
Great For: Travel
Foreign Transaction Fees: None (based on creditworthiness).*
- Earn 20,000 enrollment FlexPoints after you spend $3,500 in Net Purchases (purchases minus credits and returns) on your Card within the first four months of account opening.
- Earn one FlexPoint for every $1 of eligible net purchases charged to your Card
- Earn two FlexPoints for every $1 spent on gas, grocery or airline net purchases — whichever you spend most on each monthly billing cycle — and on most cell phone expenses
- Earn Triple FlexPoints on eligible charitable donations*
- No Foreign Transaction Fees (based on creditworthiness).*
- Award travel starts at just 20,000 FlexPoints (up to a $400 ticket value) on over 150 airlines with no blackout dates or online redemption fees
- Receive an airline allowance of up to $25 with every award travel ticket to use toward baggage fees, in-flight food or drinks and more
- Subject to credit approval.
Great For: Rewards
Annual Fee: None
- Designed for businesses with an established credit history
- Earn 30,000 American Airlines AAdvantage® bonus miles after making $1,000 in purchases within the first 3 months of account opening*
- First checked bag is free on domestic American Airlines flights for you and up to four companions traveling with you on the same reservation*
- Enjoy Group 1 Boarding on American Airlines flights*
- Earn 2 AAdvantage® miles per $1 spent on eligible American Airlines®purchases
- Earn 2 AAdvantage® miles for every $1 spent on purchases at telecommunications, car rental merchants and at gas stations2
- Earn 1 AAdvantage® mile per $1 spent on other purchases.*
Great for: Travel, Expedia Rewards
- Earn 15,000 Expedia+ bonus points after $1,000 in purchases within 3 months of account opening*
- Points redeemable for $200 towards your stay at a +VIP AccessTM hotel*
- 3 Expedia+ bonus points per $1 spent on eligible Expedia purchases including flights, hotels, activities and travel packages *
- 1 Expedia+ bonus point per $1 spent on other purchases*
- Enjoy Expedia+ silver status each year of cardmembership
- Earn one Elite Qualifying Hotel Night towards Expedia+ gold status for each increment of $2,500 in purchases made on the card between your January and December billing statements*
Great for: Travel, Expedia Rewards
- Earn 25,000 Expedia+ bonus points after $2,000 in purchases within 3 months of account opening*
- Points redeemable for $350 towards your stay at a +VIP AccessTM hotel
- 4 Expedia+ bonus points per $1 spent on eligible Expedia purchases including flights, hotels, activities and travel packages*
- 2 Expedia+ bonus points per $1 spent on dining out and entertainment*
- 1 Expedia+ bonus point per $1 spent on other purchases*
- Enjoy Expedia+ gold status each year of cardmembership*
- $100 Annual Air Travel Fee Statement Credit can be used toward airline incidentals or for either the Global Entry or the TSA PreCheck® application fees*
Great For: Hilton HHonors Points
Annual Fee: None
- Earn 40,000 Hilton HHonors™ Bonus Points after making $1,000 in purchases within the first 4 months of account opening.
- Earn 6 HHonors Bonus Points for each $1 spent at any participating hotel within the Hilton Portfolio.*
- Earn 3 HHonors Bonus Points for each $1 spent on purchases at supermarkets, drugstores and gas stations.*
- Earn 2 HHonors Bonus Points for each $1 spent on all other purchases.*
- Enjoy the benefits of HHonors Silver status as long as you are a cardmember*
- No annual fee.*
Great For: Travel Rewards, Points, Miles, Cash Back, More
- American Express
- Bank of America
- Capital One
- US Bank
- and more...
How to Select a Card
Although there is no wrong way to pursue travel rewards, it’s much easier to maximize rewards if you start off with the right card. The first thing you need to consider is your individual travel goals. Do you hope to visit a particular destination or resort, or are you hoping to earn free airfare? Perhaps you don’t know exactly where you want to travel to, only that you want to go somewhere. Whatever the case, you should be able to find at least one card can that make your travel dreams come true.
Here are some of the most important factors you should consider when you’re trying to decide which travel card belongs in your wallet:
Figure out what type of travel you enjoy most – When you’re deciding which type of travel rewards card to pursue, it helps to have an idea of where you want to go – and when. If you aren’t ready to commit, having a list of two or three ideal itineraries will at least help you narrow down your choices.
Decide if you want some flexibility – If you’re having trouble deciding whether you want to earn free airfare or hotel stays, why not pick card that can help you earn both? Flexible travel cards and fixed-value cards make it easy to rack up rewards then decide how to redeem them later.
Get to know some rewards programs – If you’re picking a travel credit card in order to rack up hotel stays or earn free airfare, it helps to learn a little bit about each rewards program before you decide. Here’s a good place to start: If you’re considering a hotel card, find out whether the specific hotel chain has properties in destinations you actually want to visit. The same advice rings true if you’re considering an airline card; find out whether the affiliated airline offers miles that are easy to redeem from your home airport.
Look for the best sign-up bonus – Most of the best travel rewards cards offer a big sign-up bonus to customers who are able to meet a minimum spending requirement within a fairly short span of time. However, different bonuses are sometimes offered for the same card. Before you sign up, make sure you’re maximizing your sign-up bonus potential.
Consider your spending pattern – Many of the premier travel rewards cards offer bonus points when you spend in certain categories. This “bonus categories” can include expenses like dining out, travel, and groceries. If you spend a lot in a certain category, it might be wise to select a travel card that would let you capitalize on that.
Watch out for annual fees – Most of the top travel rewards cards charge an annual fee, although many waive this fee for the first year of card ownership. Before paying an annual fee blindly, make sure you’re getting something in return. Some travel cards offer an annual free night or point bonus that can more than make up for this fee, while others offer very little in exchange. It’s your job to figure out whether paying an annual fee makes sense.
Consolidate other cards – Many of the travel reward cards will allow you to transfer your balance from other credit cards. If you are currently paying 15-30% on a card switching to one of the zero percent interest credit cards will save you a good amount of money each month.
Pay attention to foreign exchange fees if you travel internationally – Most credit cards charge a 2% – 3% foreign exchange fee when your credit card is used with a foreign currency. However, this fee is waived on some credit cards. Most other countries also have Chip and PIN technology, which is just starting to catch on here in the US. You should be able to find a card with this technology. Finally, make sure your card network is available overseas (Visa and MasterCard are the most common US networks used overseas).
The Best Way to Earn Free Travel
Signing up for a travel rewards credit card with a sign-up bonus is one of the only tried and true methods to score free travel. In most cases, all you have to do to enjoy these perks is meet a minimum spending requirement and pay your card’s annual fee after the first year.
The points you earn can be redeemed in a number of ways, although your options depend largely on which type of card you choose. With the right combination of cards, your options can be nearly limitless – but only if you sign up and get started today.
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