For consumers who enjoy traveling by car or by plane, there are several options for travel rewards credit cards that offer an extra bang for your buck. Rewards credit cards that focus on travel offers several perks that traditional cash-back credit cards don’t. These range from extra savings on travel purchases and freebies like in-flight services or upgrades, to no foreign transaction fees on spending done outside the United States.
With millions of adults traveling each year, it is no surprise that the number of travel rewards credit cards is substantial. However, there are two specific categories of rewards credit cards that consumers may find difficult to choose between: general travel credit cards and airline-specific credit cards. Here are a few things to consider when making your decision.
Should You Consider a Travel Credit Card?
A travel rewards credit card is one of the options for those who plan to take trips, either for work or for pleasure, on a regular basis. Travel rewards cards are offered by several different card issuers, with a wide range of perks and benefits.
Some travel rewards cards offer the ability to earn points on travel-related purchases, including flights, rental cars, and hotel stays. Others may also provide points for purchases made with the card for other expenditures, such as dining out, grocery runs, or gas station fill-ups. The most impressive travel credit cards, however, reward cardholders the most when they redeem their accumulated points for travel purchases through the card issuer’s online portal.
Travel rewards credit cards have comparable interest ratesto other cash-back credit cards, but they differ in a few other areas. For instance, most travel rewards cards do not have foreign transaction fees, making it easier and more cost-effective to use the card for purchases made overseas. There are some travel rewards cards that do not have annual fees, but most do charge a fee for the added benefits they offer. This fee can range from $95 per year up to $550, depending on the card issuer.
What’s the Deal With Airline Credit Cards?
Similar to a travel rewards credit card, airline-specific credit cards allow card holders to earn miles on purchases. The difference is that airline credit card holders earn more miles on airfare purchases. Also, these cards are specific to one airline, like American Airlines or United, and onlyoffer added miles or rewards for purchases made with these airlines.
One of the benefits of having an airline credit card instead of a travel rewards credit card is the ability to save significantly on airline purchases. The miles that accumulate can be redeemed for award airfare, seat upgrades, or in-flight purchases.
Additionally, airline credit cards often come with extra perks like free checked bags up to a limit, free in-flight entertainment, and discounts on rental cars, hotel stays, and vacation packages when booked through the credit card’s online portal. Interest rates for airline credit cards are, like travel credit cards, comparable to other cash-back and rewards cards. However, most airline cards do not have foreign transactions fees. Card holders are likely to pay an annual fee for an airline credit card, ranging from $95 to a few hundred dollars per year.
Making the Call
Making the decision between a travel rewards or an airline credit card really comes down to your personal preferences and travel habits.
If you do not utilize the same airline for travel each trip, or you don’t often use the benefits offered by a specific airline credit card, a more broad travel rewards credit card may be a better fit. Similarly, a general travel credit card is a smart fit for frequent travelers, given cardholders may earn rewards for all purchases not necessarily limited to airfares, rental cards, or hotel stays.
Alternatively, if you are loyal to a certain airline and can stand to reap substantial savings through the benefits a card offers, that kind of card may be the best choice for you. Airline credit cards that offer free checked bags, discounts on flight or seat upgrades, access to airport lounges, and other perks can be valuable.
Finally, think about the annual fee for your travel or airline rewards credit card to ensure its cost can be overcome by benefits and rewards. Be sure to consider these factors when making your choice for your next travel or airline rewards credit card.