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What You Need to Know About Travel Credit Cards

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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 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $750 toward travel when you redeem through Chase Ultimate Rewards®. This card lets you earn 2X points on travel and dining at restaurants & 1 point per dollar spent on all other purchases worldwide.

Points can be transferred 1:1 to leading frequent travel programs including airline transfer partners. The card has no foreign transaction fees. 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 $95 annual fee.

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.

Capital One® Venture® Rewards Credit Card offers a one-time bonus of 50,000 miles if you spend $3,000 on purchases within three months of account opening. 50,000 miles is equal to $500 in travel. This card earns 2x miles per dollar on all purchases. You can redeem miles toward travel purchases on any airline, hotel, or car rental. There are no foreign transaction fees. You get up to $100 credit for Global Entry or TSA Pre✓®. There is a $95 annual fee ($0 intro annual fee for the first year).

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.

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.

Disclaimer: The information for the Capital One® Venture® Rewards Credit Card has been collected independently by CreditDonkey. The card details on this page have not been reviewed or provided by the card issuer.

Travel Cards

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