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
The following credit cards feature some of the most lucrative travel rewards programs on the market. Be sure to read the terms and conditions, as these programs frequently change.
Our Overall Top Pick – The Platinum Card® from American Express
American Express offers one of the best money-saving perks to military servicemembers – it waives the annual fees for its credit cards, including on The Platinum Card® and the American Express® Gold Card.
With an annual fee of $695 and $250 respectively, it’s easy to see how this under-the-radar perk can be a huge money saver for American Express cardholders, especially if you’re a service member who wants to enjoy the lucrative luxury perks that accompany The Platinum Card® from American Express, or the everyday practicality of the American Express® Gold Card.
Now that you know you can get your American Express annual fee waived as an active service member or spouse of a service member, what are some American Express cards to check out?
Learn more about our favorite below:
Southwest Rapid Rewards® Priority Credit Card
With its no-fuss attitude, family-friendly seating policy, and strong route network, Southwest Airlines is one of the most loved airline companies by travelers around the U.S. The takes the experience with this already great company to the next level, giving you a number of perks every year including a $75 Southwest travel credit, four upgraded boardings, and 7,500 points on your cardmember anniversary. Additionally, for every $10,000 spent on this card, you’ll earn 1,500 Tier Qualifying Points, fast-tracking your way to A-List Status.
- 7,500 anniversary points each year
- Earn 3X points on Southwest® purchases
- Earn 2X points on local transit and commuting, including rideshare
- Earn 2X points on internet, cable, phone services, and select streaming
- $75 Southwest® travel credit each year
- 4 Upgraded Boardings per year when available
- No foreign transaction fees
- annual fee
Capital One Venture X Rewards Credit Card
The features one of the biggest sign-up bonuses of all travel cards, allowing you to . The bonus miles are worth roughly $750 in travel, plus you can receive up to $300 back annually as statement credits for bookings through Capital One Travel.
- Get 10,000 bonus miles (equal to $100 towards travel) every year, starting on your first anniversary
- Earn unlimited 10X miles on hotels and rental cars booked through Capital One Travel and 5X miles on flights booked through Capital One Travel
- Earn unlimited 2X miles on all other purchases
- Unlimited complimentary access for you and two guests to 1,400+ lounges, including Capital One Lounges and our Partner Lounge Network
- Receive up to a $100 credit for Global Entry or TSA PreCheck®
- Use your Venture X miles to easily cover travel expenses, including flights, hotels, rental cars and more—you can even transfer your miles to your choice of 15+ travel loyalty programs
- annual fee
How to Select a Credit Card with Travel Rewards
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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