If you want to explore the world or save on your family’s next vacation, a travel card could help you do it. These cards earn points you can use for travel expenses. Many of the best travel rewards cards have other perks, too, such as elite status with hotels or access to airport lounges.
But travel cards aren’t right for everyone. Before you apply for one, ask yourself these important questions.
1. How often do I travel?
First, decide if you travel enough to make a travel card worth it. As a rule of thumb, if you take at least two or three trips per year, then you could benefit from a travel card. If you only travel once a year, you’re probably better off with cash back credit cards.
Opening a travel card when you don’t travel much is one of the most common credit card mistakes. The people who do this often end up with a huge balance of travel rewards points they don’t end up using.
2. Which travel perks are most important to me?
There are all kinds of benefits you can get from travel credit cards. Here are some examples:
- Free checked baggage with an airline
- A yearly free night certificate with a hotel chain
- Airport lounge access
- A fee credit for a Global Entry, TSA PreCheck, or CLEAR® membership
- Elite hotel status
Think about which features you want in a travel card. If you’d like to check bags for free with your favorite airline, then getting one of its airline cards could be the best choice. If you want hotel perks, look for a hotel card from your favorite chain. And if you want more flexible benefits, you could go with a general travel card that’s not tied to an airline or hotel.
3. Do I know how to use travel rewards?
When you’ve found a travel card you like, learn about how its rewards program works. Make sure you’ll be able to use those rewards to book the travel you want.
Some people make the mistake of getting a travel card just because it’s popular. Then, they realize that it’s harder to redeem their points than they expected.
Travel rewards programs have a learning curve. It’s best to see if a card’s redemption options will work for you before you apply.
4. Will I get my money’s worth from the annual fee?
Most travel cards charge an annual fee. There are a couple of no annual fee travel cards, but they’re light on benefits. The most popular cards charge anywhere from $95 to $695.
It only makes sense to open a travel card if you’ll get more value from the benefits than you pay for its annual fee. If a card costs $250 per year, it should ideally save you much more than that.
Go over the benefits the card offers. Some of these may not have a fixed dollar value, but you can put an estimate on them. For example, I personally value airport lounge access at about $100 per year based on my own travel habits. Don’t forget to account for the rewards you’ll earn with a card, as they also have value.
5. Can I spend enough to earn the welcome offer?
Travel cards tend to have the largest welcome offers — introductory bonuses for new cardholders. But their welcome offers also normally have higher spending requirements. A card may offer 60,000 to 80,000 points if you spend $4,000 on purchases in the first three months.
A welcome offer is an all-or-nothing deal. You either meet the spend requirement and earn it, or you don’t. Only apply for a card if you’re 100% confident you can spend enough to earn its welcome offer and still pay off your monthly balance.
A travel card could save you a lot of money and make every trip more enjoyable. After asking yourself those questions, you’ll know if this type of card is right for you and what to look for in a card.
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