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What You Need to Know About Travel Credit Cards

Read more about Travel Rewards
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Today, we're going to get more in detail about travel credit cards.

The main benefits of using the right travel reward cards are:

  • Bonus points in the form of airline miles (or hotel points)
  • More airline miles with everyday purchases
  • More flexibility in how you want to redeem them
  • Travel-specific protection and benefits

Ready to jump into signing up for those credit cards already?

Not so fast.

First, you need to think about your needs. There are a ton of travel rewards cards, but not all of them will be the right fit for you.

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How often do you travel? How much do you spend a month on your credit card? Do you want something simple to use? Do you have an airline loyalty?

Keep these questions in mind as we go over the different kinds of cards.

Airline rewards cards basically boil down to 3 types:

1. Transferrable credit card miles to airlines

Some credit cards allow you to transfer your points to the credit card's airline and hotel partners. This gives you flexibility to redeem with different airlines.

If you don't want to transfer the points, you can also use them toward credit to book travel on the credit card company's travel portal.

  • Pros: You can use your points for maximum value. For example, 50,000 Ultimate Rewards points can be worth a LOT more than just $500. You can use them to book 2 roundtrip award tickets from Los Angeles to Hawaii that otherwise cost over $1,000. We'll cover this more in detail in Day 7.

  • Cons: You have to do more homework to transfer your points the smartest way. And you usually would need travel flexibility to find available award seats.

Chase Sapphire Preferred lets you earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®. You can earn 5,000 bonus points if you add your first authorized user and make a purchase within the first three months from account opening. This card lets you earn 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide. The points can be transferred 1:1 to leading frequent travel programs including airline transfer partners. The card has a $0 foreign transaction fee. The card also comes with premium travel and purchase protection benefits (including trip cancellation/trip interruption insurance and auto rental collision damage waiver). There is a $0 intro annual fee for the first year, then $95.

2. General travel reward credit cards

These are also called "fixed value" cards. You can just book travel as normal and later apply your points toward statement credit for travel-related expenses. This kind of card cannot be simpler to use. You don't have to worry about seat availability or blackout dates.

These cards are also good if you travel, but may not necessarily fly. You can redeem for purchases such as hotels, trains, car rentals, and cruises.

  • Pros: Easy to use, almost total flexibility. You can start redeeming with a much lower number of points. And you can redeem for almost any travel-related purchase.

  • Cons: The redemption value will generally be fixed at 1 point = 1 cent. So 50,000 points will equal $500.

Barclaycard Arrival Plus offers 40,000 bonus miles if you spend $3,000 on purchases within the first 90 days of opening your new credit card account. 40,000 bonus miles is enough to redeem for a $400 travel statement credit. This card earns 2x miles on all purchases. And when you redeem, you get 5% miles back to use toward your next redemption, every time you redeem. There is no foreign transaction fee. There is a $89 annual fee (waived for the first year).

Plus, enjoy a 0% introductory APR for 12 months on balance transfers made within 45 days of account opening. After that, a variable APR will apply, 17.24%, 21.24% or 24.24%, based on your creditworthiness.

3. Airline co-branded credit cards

A third type of travel card is an airline co-branded card. You still earn miles on all purchases, but you can only redeem them on that particular airline and its partners. But you usually get airline-specific perks, such as free checked bags and priority boarding. These cards are good if you often fly with a certain airline.

  • Pros: Get cool little perks with your favorite airline to make your flight experience better.

  • Cons: You can only use the points for that airline (and its partners). You usually only get bonus points for purchases made with that airline, not on daily purchases.

JetBlue Plus Card offers 30,000 bonus points if you spend $1,000 on purchases within the first 90 days of opening your new credit card account. This card earns 6 points per $1 on JetBlue purchases, 2 points per $1 at restaurants and grocery stores and 1 point per $1 on all other purchases. There are no blackout dates on JetBlue-operated flights. The points awarded in your TrueBlue account do not expire. You earn 5,000 bonus points every year after your account anniversary. You'll enjoy 50% savings on eligible inflight purchases like cocktails and food & the primary cardmember's first checked bag is free on JetBlue-operated flights. There are no foreign transaction fees. There is a $99 annual fee.

Head over to this article to see our favorite airline miles cards.

Key Takeaways

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  • Transferrable cards will allow you to use your points for the best value, but they take a bit of work to use.
  • Fixed value cards are the easiest and most flexible to use, but the value will always be the same.
  • Airline co-branded cards are great if you often fly with the airline, as you will receive perks that may make your flight experience better.

Because transferrable cards are the hardest to understand, we will focus a more on them. Tomorrow, we will talk about the 4 major transferrable travel reward programs and how to best utilize them.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer. This site may be compensated through the Advertiser's affiliate programs.


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About CreditDonkey®
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Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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