Should You Get A Travel Credit Card?

Travel1 year ago
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If you want to lower your travel costs in 2023 and enjoy discounts and offers along the way, then applying for a travel credit card can be extremely beneficial. Depending on whether you want to travel by plane train, ship, or bus - you can start saving money by using cards offering points and miles on your everyday spending.

These points can then be spent with associated airlines, hotels, car rentals, and other partners to lower your costs and score freebies on your vacations for years to come. Some cards even come with premium global assistance when you travel and insurance on lost, damaged, or stolen baggage!

However, before you start applying for all of the credit cards offers listed on this page, you need to consider a few factors:

  • Are the bonuses on travel credit cards worth the annual fee?
  • What types of travel cards are available?
  • How do you pick the right travel credit card for your current spending and lifestyle?

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What are Travel Credit Cards?

Before we get started, we should take a look at what exactly travel credit cards are and the different types of cards for you to consider. Roughly speaking, these cards fall under three main categories:

  • Travel rewards cards from banks and credit providers.
  • Bank and hotel co-branded cards.
  • Co-branded cards from a bank and partner airline.

The rewards and bonuses available with each card will depend on the type of card you choose.


Travel Credit Cards

There is a wide range of travel reward cards that allow you to earn points and miles for spending with partner airlines, hotels, and car rental purchases. You can also enjoy associated benefits varying from secondary coverage for car rentals, trip cancellation and interruption insurance, and premium global assist hotlines.

Travel cards for you to consider from Amex include the Blue Cash Everyday Card from American Express, the American Express Gold card, and the Amex Everyday preferred credit card.

You should also check the Chase Sapphire Preferred Card, the Capital One Venture X Rewards card, and the Chase Sapphire Reserve credit card.

If you are going to get the absolute best benefits from your spending, you need to make sure you are familiar with each card option and pick the option which will give you the most rewards for your current spending habits.


Airline Travel Credit Cards

There are a variety of different airline travel cards available from major credit card providers and big-name carriers. These include the Delta SkyMiles Platinum card from American Express, the United Explorer Card from Chase, and the Citi AAdvantage Premium Select World Elite Mastercard.

If your work or vacations involve traveling on a common carrier regularly, then it may be worth looking into these cards. By using these cards on your travel and everyday spending, you can build up points with the airline loyalty program which you can redeem against flights once you have built up a decent number.


Branded Hotel Credit Cards

Similarly, to airline credit cards, hotel cards are offered in partnership with big-name chains and allow you to earn points to spend on your future stays. Some very big hotel chains have issued travel cards that can help you to save money on your accommodation costs.

Options for you to consider include the Marriott Bonvoy Brilliant American Express Card, the IHG Rewards Premier Card, and the Hilton Honors Platinum Credit Card from American Express.


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Is a Travel Credit Card worth the Annual Fee?

In exchange for being able to build up air miles and enjoy benefits such as car rental loss and damage insurance covered trips, you will usually be asked to pay an annual fee.

This can vary from as little as $95 per year to $600+ each year. Whether the annual fee is worth it for you will depend upon how much savings you will be deriving from using them.

For example, if you choose to go for a $95 annual fee card, you may find that the initial bonus points offer when you meet the minimum spend requirement is worth much more when redeemed with partners. So, if you are confident that you will hit the limit with your ordinary spending habits, you will still be saving quite a bit while paying the fee for the first year.

Premium cards have higher annual fees, but the perks and benefits can be worth hundreds of dollars each year to offset this. For example, the Chase Sapphire Reserve has an annual fee of $550. But, you will benefit from a $300 travel credit, complimentary Priority Pass membership worth $99 a year, and credit towards your Global Entry, NEXUS, or TSA Precheck membership.

These savings are also supplemented by trip delay insurance, baggage delay coverage, and car rental collision insurance. Spending on the cards will also result in building up points and miles for further discounts. If these perks and benefits are utilized, Sapphire Reserve cardholders could find that they save money after paying the annual fee.


How to Decide if a Travel Credit Card Annual Fee is Worth It

When deciding whether an annual fee is worth it for you, you need to make sure that the savings you will be making are more than the annual fee you will be paying out.

However, when making this decision it is important that you only include the value of the benefits which you will actually make use of. For example:

If you don't use Doordash and don't plan on doing so in the future, then statement credit on offer from some cards will have a value for you of $0.

Do you regularly travel for business with only carry-on luggage? If so, how valuable is a free checked bag to you?

If your travel regularly requires booking in non-chain hotels, or Airbnb, then elite status at Hilton Hotels won't be of much benefit.

When considering any card, you need to look at the rundown of the benefits and assess the value of each benefit to you. The value of the benefits and discounts you will use should outweigh the annual fee you will be paying.


Takeaway - Should You Get a Travel Credit Card?

It may take some time and research but it is essential if you are going to derive the best benefits and discounts for your future travel. The right choice could save you hundreds of dollars a year in travel spending and allow you access to hotel rooms and trips you wouldn't be able to afford otherwise.