Dreaming of jet-setting to exotic destinations without breaking the bank? A travel credit card might just be your ticket (literally!) In this guide, we’ll break down why a travel credit card is essential to travel like a rich girl and how to pick the perfect one for your lifestyle.
- Why You Need a Travel Credit Card
- Understanding Credit Score Requirements for Travel Credit Cards
- How to Pick the Best Travel Credit Card
- Comparing 6 Travel Credit Cards
Why You Need a Travel Credit Card
Earn Points and Miles: Imagine turning your daily Starbucks run into a free flight to Paris. Travel credit cards help you accumulate points and miles for every dollar spent, making your dream vacations more attainable. If you’re not earning points on purchases (travel and non-travel), you’re leaving so much on the table!
Travel Perks and Protections: From travel insurance to purchase protection, these cards come packed with perks that make your trips smoother and more luxurious. Enjoy access to exclusive airport lounges, priority boarding, and more, depending on the card you pick.
Sign-Up Bonuses: Many travel credit cards offer lucrative sign-up bonuses that give you a head start on your travel goals. Earn tens of thousands of points just for meeting a minimum spending requirement – that’s like getting rewarded for shopping!
No Foreign Transaction Fees: Say goodbye to those pesky foreign transaction fees that add up during your international trips. Many travel credit cards waive these fees, saving you money on every purchase abroad.
Cash Back and Discounts: Some travel cards offer cash back or discounts on travel-related expenses, stretching your travel budget further.
Building Credit: When used responsibly, a travel credit card can help you build a strong credit history, opening doors to better financial opportunities in the future.
Understanding Credit Score Requirements for Travel Credit Cards
Minimum Credit Score Needed for Travel Credit Cards
Most travel credit cards require a minimum credit score of 700, with premium cards often needing a score of 740 or higher. A good credit score reflects your creditworthiness and increases your chances of approval.
How to Check the Requirements and Your Credit Score
1. Research Card Requirements: Visit the card issuer’s website or check customer reviews to find out specific credit score requirements.
2. Check Your Credit Score: Use free services like AnnualCreditReport.com or credit monitoring platforms like Credit Karma to review your score. Some banks and credit card issuers also provide free access to your credit score through your account.
Before applying for a travel credit card, ensure you meet the credit score requirements and understand your own credit standing. This preparation can significantly enhance your chances of approval and help you maximize the travel benefits these cards offer.
How to Pick the Best Travel Credit Card for You
One of the first ways to evaluate what card is best for you is to assess your travel habits and goals. Are you a frequent flyer or an occasional adventurer? Your travel frequency can influence which card is best for you. For frequent travelers, cards with higher rewards rates on travel spending are ideal.
You’ll also want to determine what benefits matter most to you – lounge access, travel insurance, concierge services, etc. Your priorities will guide your choice.
Evaluate the Costs and Fees
Annual Fees: Weigh the annual fee against the card’s benefits. Sometimes a high fee is worth it if the perks outweigh the cost. For example, The Platinum Card® from American Express has a hefty annual fee but offers extensive benefits. As long as you’re actually using those benefits, it can be worth it!
Interest Rates: Understand the APR if you plan to carry a balance. Paying off your card monthly is always ideal, but knowing the interest rates can help you avoid surprises.
Other Fees: Consider other potential fees such as balance transfer fees, late payment fees, and how they might impact you.
Compare Rewards and Earning Potential
Earning Rates: Compare how different cards reward spending in various categories like travel, dining, groceries, and everyday purchases. Cards like the Chase Sapphire Preferred® offer 2x points on travel and dining, which can add up quickly.
Redemption Flexibility: Look for flexible redemption options, whether through transfer partners, statement credits, or direct bookings. The Capital One Venture Rewards Credit Card allows you to redeem miles for travel purchases or transfer them to airline partners.
Sign-Up Bonuses and Promotions: Maximize your rewards by taking advantage of sign-up bonuses and promotional offers. These can significantly boost your points balance.
Consider Additional Perks and Benefits
Travel Insurance and Protections: Choose a card that offers comprehensive travel insurance and protections, such as trip cancellation, lost luggage reimbursement, and car rental insurance.
Airport Lounge Access: Lounge access can make a huge difference in your travel experience. Cards like The Platinum Card® from American Express offer access to Centurion Lounges, Priority Pass lounges, and more.
Customer Service and Support: Strong customer service is crucial, especially for resolving travel-related issues. Look for cards with high customer satisfaction ratings.
Travel Credit Cards
Chase Sapphire Preferred® Card
Annual Fee: $95
Minimum Credit Score: Good to Excellent (700+)
Key Benefits:
- Sign-Up Bonus: Earn a substantial sign-up bonus (typically 60,000 points) after meeting a minimum spending requirement.
- Earning Rates: 2x points on travel and dining, 1x points on all other purchases.
- Redemption Flexibility: Points are worth 25% more when redeemed for travel through Chase Ultimate Rewards. Points can also be transferred to various airline and hotel partners.
- Travel Protections: Includes trip cancellation insurance, primary car rental insurance, and baggage delay insurance.
- Lounge Access: Does not offer airport lounge access.
Chase Sapphire Reserve®
Annual Fee: $550
Minimum Credit Score: Excellent (740+)
Key Benefits:
- Sign-Up Bonus: Enjoy a generous sign-up bonus (typically 50,000 to 60,000 points) after meeting a minimum spending requirement.
- Earning Rates: Earn 3x points on travel and dining worldwide, 1x points on all other purchases.
- Redemption Flexibility: Points are worth 50% more when redeemed for travel through Chase Ultimate Rewards. They can also be transferred to various airline and hotel partners.
- Travel Protections: Comprehensive travel insurance including trip cancellation/interruption insurance, primary car rental insurance, and baggage delay insurance.
- Lounge Access: Access to Priority Pass Select lounges
The Platinum Card® from American Express
Annual Fee: $695
Minimum Credit Score: Excellent (740+)
Key Benefits:
- Sign-Up Bonus: Large sign-up bonus (typically 100,000 points or more) after meeting a minimum spending requirement.
- Earning Rates: 5x points on flights booked directly with airlines or through Amex Travel and 5x points on prepaid hotels booked through Amex Travel.
- Travel Credits: Up to $200 airline fee credit and $200 Uber credit annually.
- Travel Protections: Comprehensive travel insurance and purchase protections.
- Lounge Access: Access to Centurion Lounges, Priority Pass lounges, and other partner lounges.
Drawbacks:
- High Spending Threshold for Bonus: Significant spending is required to earn the sign-up bonus.
- Complex Reward Redemption: The value of points can vary based on redemption options.
Capital One Venture Rewards Credit Card
Annual Fee: $95
Minimum Credit Score: Good to Excellent (700+)
Key Benefits:
- Sign-Up Bonus: Generous sign-up bonus (typically 60,000 miles) after meeting a minimum spending requirement.
- Earning Rates: 2x miles on every purchase.
- Redemption Flexibility: Miles can be redeemed for travel purchases at a rate of 1 cent per mile or transferred to various airline partners.
- Travel Protections: Includes travel accident insurance, rental car insurance, and extended warranty protection.
- Lounge Access: Access to Capital One Lounges, Priority Pass lounges, and other partner lounges.
Drawbacks:
Capital One Venture X Card:
Annual Fee: $395, which is competitive given the extensive travel benefits.
Minimum Credit Score: Excellent (740+)
Key Benefits:
- Sign-Up Bonus: Earn a substantial bonus (typically 75,000 miles) after meeting the minimum spending requirement.
- Earning Rates: 10x miles on hotels and rental cars booked through Capital One Travel, 5x miles on flights booked through Capital One Travel, and 2x miles on all other purchases.
- Travel Credits: $300 annual travel credit for bookings made through Capital One Travel, up to $100 credit for Global Entry or TSA PreCheck application fee, and 10,000 bonus miles every year on your account anniversary.
- Travel Protections: Includes travel accident insurance, rental car insurance, and extended warranty protection.
- Lounge Access: Unlimited access to Capital One Lounges and Priority Pass lounges for the cardholder and up to two guests.
Citi Premier® Card
Annual Fee: $95
Minimum Credit Score: Good to Excellent (700+)
Key Benefits:
- Sign-Up Bonus: Attractive sign-up bonus (typically 80,000 points) after meeting a minimum spending requirement.
- Earning Rates: 3x points on air travel, hotels, and restaurants, 2x points on entertainment, and 1x point on other purchases.
- Redemption Flexibility: Points can be transferred to various airline partners or redeemed for travel through the Citi ThankYou Travel Center.
- Travel Protections: Includes trip cancellation and interruption protection, worldwide travel accident insurance, and car rental insurance.
- Lounge Access: Does not offer airport lounge access.
Discover it® Miles
Annual Fee: $0
Minimum Credit Score: Good to Excellent (700+)
Key Benefits:
- No annual fee makes it an attractive option for budget-conscious travelers.
- Earning Rates: 1.5x miles on every purchase.
- First-Year Match: Discover matches all the miles earned in the first year, effectively doubling the miles earned.
- Redemption Flexibility: Miles can be redeemed as a statement credit for travel purchases or as cash back.
Drawbacks:
- Limited Travel Perks: Fewer travel protections and perks compared to premium travel cards.
- No Transfer Partners: Miles cannot be transferred to airline or hotel partners.
Choosing the right travel credit card depends on your travel habits, spending patterns, and desired benefits. Premium cards like The Platinum Card® from American Express offer many perks and protections, including more luxury perks, but come with high annual fees, while cards like the Discover it® Miles provide more basic rewards with no annual fee. Evaluate each card’s benefits and drawbacks to find the one that best suits your travel and financial needs.
With the right travel credit card, your dream life of adventure and exploration is just a swipe away. Evaluate your travel goals, spending habits, and desired benefits to select the travel credit card that best suits your needs. Get ready to take off on your next big adventure!
