Not all travel credit cards are alike. Here’s how the various types break down so you can choose which type of travel rewards card is best for your unique circumstances.
Transferable Rewards Credit Cards
These types of credit cards earn rewards that can be transferred to other programs, like airline or hotel loyalty programs. Transferable rewards include Capital One Miles, Bilt Rewards, Chase Ultimate Rewards, American Express Membership Rewards and Citi ThankYou Points.
Airline Credit Cards
Airline credit cards earn miles that can be used to redeem for future purchases with that airline. You can also use that airline’s miles to book flights on other carriers within the same airline alliance, which may yield greater value for your earnings.
Many airline credit cards offer perks beyond earning miles. Usually the higher the annual fee, the more benefits you’ll get. Some common airline credit card extras may include free checked baggage, priority boarding, a TSA PreCheck/Global Entry application fee credit and airport lounge access. If you’re able to max out these extras, the perks can often be worth more than the annual fee.
Hotel Credit Cards
Anyone who stays in hotels at least semi-regularly and who can pledge loyalty to one hotel brand may find that a hotel credit card is right for them. With hotel credit cards, you’ll earn rewards in the hotel’s currency, like Marriott Bonvoy points, Hilton Honors points or World of Hyatt points, which are redeemable towards any eligible hotel property under that brand’s umbrella.
Owning a hotel credit card can be a much faster path towards accruing points than earning them on stays alone. Some cards confer automatic elite status upon ownership, which comes with its own set of benefits that can range from late check-out to free breakfast to room upgrades. Some cards will also offer one night free annually every year you renew your card membership as well as other perks such as airport lounge access.
Fixed-Value Credit Cards
Credit card points may often have a fixed-value when redeemed for things like cash or travel where the issuer publishes the cash value per point. For example, a card may offer a value of a penny per point when redeemed for any valid travel purchase.
With some cards, fixed-value points currencies can also vary by redemption type. For example, points on a card might be worth 1.5 cents each when redeemed for travel rewards, but only be worth 1 cent each when redeemed for cash back.
Business Credit Cards for Travel
If you’re traveling for work and you want to keep your business expenses separate from your personal expenses, a travel business credit card may be worth considering. Business credit cards for travel function the same as consumer credit cards for travel, although the business versions often offer different earnings rates and perks as well as a different annual fee structure.
How To Choose a Travel Credit Card
With so many types of travel credit cards to choose from—before even considering the specific products within each category—selecting a travel credit card can feel like a complicated process. However, it should be relatively easy for you to prioritize which benefits you’ll actually use and determine what type of rewards best fit your lifestyle.
Evaluating General Travel Credit Cards
General travel cards can be great options for travelers who aren’t loyal to a single brand of airline or hotel. Despite not being branded, these cards can still come with a wide assortment of perks that travelers appreciate, including statement credits toward travel bookings, select trip insurance, airline lounge access, valuable rewards and generous welcome bonuses.
When evaluating general travel credit cards, consider:
- Annual Fees: Some travel cards may be available without an annual fee while others cost $500 or more per year.
- Redemption Options: Some cards have the ability to transfer to partner airlines or hotels while others may only be redeemable for travel through in-house portal bookings. Some may also offer the option to redeem for non-travel rewards, such as cash back.
- Luxe Benefits: Premium cards may come with statement credits, lounge access or trusted traveler application reimbursements. Determine if you’ll actually use these perks.
- Trip Protections: Travel insurance might not be glamorous, but cards that offer protection against trip cancellation, flight delays or lost baggage could save you money.
Evaluating Airline Credit Cards
Airline credit cards typically earn frequent flyer miles on every purchase which may lead to outsized value when booking award tickets. Airline credit cards also frequently come with perks while traveling, like free checked bags, enhanced award space or lounge access. They may also help you achieve elite status more easily.
When evaluating airline credit cards, think about:
- Earning Rates: Many airline credit cards don’t offer elevated earnings on categories other than airline spending, so you’ll need to choose carefully if that’s important to you.
- Perks While Flying: Typically, only cards with an annual fee include benefits while flying such as priority boarding or complimentary checked bags.
- Elite-Qualifying Bonuses: Some cards include bonus elite-qualifying miles when hitting spending thresholds, which can further enhance your flying experience.
- Companion Fares: Some airline cards offer the opportunity to earn a companion certificate, which allows you to bring a second traveler on your trip for a reduced price.
Evaluating Hotel Credit Cards
Hotel credit cards will earn points toward future free stays but this is one case where the benefits can often outshine rewards. More often than not, hotel cards come with automatic elite status as well as a fast track to even higher levels of status. Plus, annual free night certificates or statement credits add to their value proposition.
When evaluating hotel credit cards, consider:
- Elite Status Offers: Generally speaking, cards with higher annual fees may automatically bump you to higher elite status levels which can be invaluable on frequent stays.
- Free Night Certificates: Many, but not all, hotel cards offer free night certificates either upon renewal of your card or when hitting spending thresholds. Each certificate may come with restrictions on when or where you can redeem it, so compare fine print.
- Earning Rates: Hotel cards may offer huge multipliers on bonus categories, allowing you to earn 5x or 10x on certain purchases. However, keep expectations in check: hotel points may not be worth a full penny per point.
- Statement Credits: Some cards may include statement credits toward eligible purchases made at hotels and resorts or even on airline fees or restaurant purchases, which can be valuable, but you’ll need to actually use them.
Why Get A Travel Credit Card
Travel cards often include numerous membership benefits such as elite status when traveling with partner programs, free checked bags, lounge access or discounts on ancillary travel fees. These benefits can make your trips easier, more comfortable and more affordable. Additionally, travel credit cards offer the opportunity to earn valuable rewards and in some cases may provide higher yields than cash back or other types of rewards.
Pros and Cons of Travel Credit Cards
Pros of Travel Credit Cards
- Fast-track to free or discounted travel. You’ll earn rewards on your spending that can be used to reduce the cost of future travel.
- Elite perks and benefits. Many cards offer money-saving extras like free luggage or complimentary breakfast.
- Lack of foreign transaction fees. Some of the best travel credit cards won’t charge you extra for using your card abroad.
Cons of Travel Credit Cards
- Limited-use rewards. The best value in owning and using a travel rewards card comes from redeeming the rewards for more travel.
- Annual fees can be high. Cards with the most premium perks tend to also have the most premium price.
- Redemptions can be complicated. For some reward programs, squeezing the most outsized value out of your points or miles can require some work.
When Should You Use a Travel Credit Card?
- Business travel. If your work requires you to travel, having a dedicated travel card can make it easy to keep your business expenses separate from your personal expenses.
- International travel. If you’re planning to travel abroad, travel credit cards often come with perks like no foreign transaction fees, airport lounge access and application fee reimbursements for Global Entry or TSA Precheck that can make your journey more comfortable.
- Luxury travel. If you want an upscale experience like access to exclusive airport lounges, automatic hotel room upgrades and property credits, a travel credit card with these features can grant you access to these features.
