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Having a travel credit card in your wallet is like having a financial passport, opening the door to all sorts of travel benefits. A travel credit card might be worth it if you frequently travel or want a more high-end experience, or if you're saving for a big trip and can use the rewards for luxury bookings.
However, a travel card might not be worth it if you travel infrequently or don't tend to pay off your credit card balances each month.
What Is a Travel Credit Card?
A travel credit card lets you earn travel-related rewards when you make eligible purchases. This could give you miles for airfare, points for hotel stays or rewards for short-term rentals. Some travel cards may go even further by offering perks such as airport lounge access or travel insurance.
Types of Travel Credit Cards
There are three types of travel credit cards: general, airline and hotel. Here, we explore each kind of card.
General Travel Credit Card
A general travel credit card is not tied to an airline, a hotel chain or any other provider of travel services. Therefore, you enjoy the freedom of determining how you earn and redeem rewards.
This type of card typically provides rewards in the form of points, which you can earn by making everyday purchases. You may be able to earn even more points with transactions in certain spending categories, such as travel or dining.
On top of the rewards, a general travel credit card might supply travel perks such as a 0% foreign transaction fee or a statement credit for the cost of a TSA PreCheck or Global Entry membership.
You generally redeem rewards from general travel cards by:
- Reserving travel through the card issuer's travel portal.
- Applying the rewards to travel costs paid with your card.
- Moving rewards to affiliated airline or hotel loyalty programs, and then reserving flights or stays through those programs.
Learn more: How Do Travel Credit Cards Work?
Airline Credit Card
If you regularly fly on a certain airline, getting an airline credit card could be a smart move.
When you make purchases with an airline credit card, you can earn points or miles connected to the airline's loyalty program. The rewards normally are richer if you use an airline card to pay for airfare. For instance, you might score 5 miles per dollar when you make an airline purchase with the airline's card compared with the usual 2 miles.
Depending on the card, you can redeem rewards for things like plane tickets, seat upgrades, free checked bags and early boarding privileges. You must follow the rules of the airline's loyalty program to redeem rewards.
Hotel Credit Card
As with an airline credit card, a hotel credit card might let you pile up a generous amount of points when you use the card to book a room with an affiliated hotel. For instance, if you stay at hotels operated by Hilton when taking business trips, you'll likely collect more points if you charge your stays on a card connected to Hilton than if you use the same card for everyday purchases.
In addition, the hotel card might afford you some perks, such as room upgrades, free breakfast, early check-ins, late checkouts and elevated status in the hotel chain's loyalty program.
Remember that you must adhere to a hotel chain's rules about redeeming points.
Pros and Cons of Travel Credit Cards
Just like any credit card, a travel credit card comes with pros and cons.
Pros
Travel benefits: Among the potential benefits of travel credit cards are 0% foreign transaction fees, free checked bags, airline seat upgrades, hotel room upgrades, free checked bags and airport lounge access.
Card bonuses: When you sign up for a travel credit card, you might be able to take advantage of a bonus like 80,000 extra airline miles, 30,000 extra hotel points, free-stay awards or an appealing intro APR.
No annual fee: Some travel credit cards don't charge an annual fee.
Cons
Airline and hotel restrictions: If you have a travel credit card tied to a specific airline or hotel chain, you probably won't squeeze much value out of it unless you frequently fly with the associated airline or frequently book stays with the associated hotel chain.
Potentially high annual fee: Perk-loaded premium travel credit cards, also known as luxury travel credit cards, generally charge a high annual fee to offset the cost of all of a card's goodies.
Strict credit requirements: When you apply for a premium travel credit card, you normally need a good or excellent credit score to be approved. That's because the credit limits for these cards are typically higher than those for some other cards.
Are Travel Credit Cards Worth It?
Before applying for a travel card, think about whether it's worth it based on your travel and spending habits.
When a Travel Credit Card Could Be Worth It
- You travel frequently: On the road or in the air several times a year? A travel card might make sense.
- You can qualify for the card's signup bonus: If you're sure you can make enough purchases to secure the card's intro bonus, the card could pay off.
- You pay off your balance each month: If you reduce your balance to zero every month, the rewards of a travel credit card are that much more rewarding because you're not stuck with interest payments.
When a Travel Credit Card May Not Be Worth It
- You don't travel much: If you're not on the road or in the air several times a year, a travel credit card might be pointless.
- You carry a balance from month to month: When you carry a balance each month, you're hit with interest charges that water down the value of a travel credit card.
- You're paying a high annual fee: Let's say the benefits of a card might not offset its high annual fee. In this case, you're likely better off looking for a different kind of card.
How to Choose a Travel Card
So, you're taking the leap and getting a travel card. Now what? As you're trying to choose a travel card, pay attention to:
- Intro offers: A credit card with an intro bonus of miles or points can boost your rewards stash and help cover the cost of that Hawaiian getaway you've been eyeing. Before filling out an application, carefully read the terms and figure out whether you can handle the card's spending requirements without carrying a balance or busting your budget.
- Rewards rates: Many travel cards offer rewards in different tiers, meaning you earn higher or lower amounts of points or miles for each dollar spent based on where you use a card. Search for a card that closely matches your spending behavior.
- Redemption options: Sift through a card's redemption and transfer options to ensure you'd maximize the card's value.
- Card perks: Review the list of cardholder benefits, including travel protections and insurance. Assess which ones you'll frequently use and hunt for a card with those benefits.
Frequently Asked Questions
Where Can I Find the Best Travel Credit Cards?
Do some research online to find the best travel credit cards, focusing on the ones that are best for your situation. For starters, check out Experian's roundup of the best travel credit cards.
Are There Travel Credit Cards With No Annual Fee?
Several travel credit cards don't charge an annual fee. However, the rewards provided by no-fee cards might not be on the same level as cards that do charge an annual fee.
The Bottom Line
A travel credit card can help you earn points or miles for trips and gain perks like hotel room upgrades, airport lounge access and travel insurance. It's typically worth it for frequent travelers who pay off their balances monthly and can maximize rewards, while less-frequent travelers or those carrying month-to-month balances might not find a travel card so rewarding.
Choosing the right general, airline or hotel credit card comes down to your spending habits, desired perks and willingness to potentially pay an annual fee. Before applying for a travel credit card, check your credit report and FICO® Score☉ Θ for free with Experian to see your credit stands.