best travel rewards credit card

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From raking up free hotel stays and international flights, travel rewards credit cards can be fine outlets to travel for free or with a bit more luxury.

We all will find our mailboxes stuffed with these offers. Sifting through which one is the right one can be a big undertaking. If you want to take advantage of free flights, upgrades and other travel perks that come attached to these credit cards, you must select the best card for you in the first place. Being blinded by enticing sign up bonuses can have you forking over your personal information and applying for a travel rewards credit card that simply isn’t for you. Before you sign on the dotted line, we have mapped out a checklist to go through with each card you are considering to help ensure that you find the best plastic travel partner.

1. Figure Out Your Priorities and Goals First

Everyone and their travel needs is different. There isn’t a one size fits all travel rewards credit card. However, some cards might be more catered to your travel priorities and goals than others. First, figure out what your goals are for travel. If you want to accumulate free hotel nights, a hotel travel rewards credit card is for you. If you want to receive free flights and airline upgrades with a specific airline, you should look for an airline-based card. The card you pick should be focused on your travel priorities. More specifically, most travel rewards credit cards are airline focused, hotel centered or merely designed for general travel. Before you apply for a card, make sure it is going to give you the kind of travel you want.

2. Study Your Credit Report Before Applying

While it might seem tempting to just jump into signing up for the first travel rewards credit card you see, you need to spend some time with your credit report. Some travel rewards credit cards can be more difficult to obtain depending on your credit score. You don’t want to apply for a credit card, only to be turned down. While this won’t be devastating to your credit, it does add another inquiry to your credit report you can avoid. Before you apply for a card, be sure you can get approved. Find out what your credit score needs to be in order to determine the likelihood you will be approved. Most travel rewards credit cards require relatively high credit scores. While some travel rewards credit cards are more forgiving to average to low credit scores, most will require good credit.

3. Be Sure The Annual Fee Is Worth It

travel rewards credit cards

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With any credit card, you need to be certain that you can afford it each year. While annual fees can be a big pain, often the cards with the largest annual fee lend the most rewards. While you can find travel rewards credit cards without annual fees, these cards tend to be set up with a much slower point and mileage earning system. Before you sign up for a card, make sure you will gain enough out of the card that the annual fee pays for itself. For example, if you earn a free hotel stay in a year, one valued at $300 a night, and you pay a $95 annual fee, the fee has already paid for itself. The benefits must offset the fee.

Travel rewards credit cards can vary greatly in the annual fee department. For example, the Chase Sapphire Preferred offers a $95 annual fee after the first year while the Capital One Venture has a $59 annual fee after the first year. Some credit cards can have even larger annual fees like the Platinum Card for American Express with its $450 annual fee. However, don’t get sticker shock just yet. Such a high fee for a card lends a lot of perks. Bottom line, travelers just need to be certain that the annual fee will lend enough rewards and freebies that it pays for itself easily.

4. Don’t Neglect the APR Fine Print

Many shoppers can quickly get stars in their eyes by all of the rewards that they never read the fine print. One percentage you will want to find before you sign up is the APR, the annual percentage rate. Travel rewards credit cards can sometimes have much higher APRs than basic credit cards. An APR for a travel credit card tends to run from 15% to 25%. Why is this important to note? You can quickly rack up debt if you carry large balances each month if the card you go with has a high APR.

Many travel rewards credit cards might offer a 0% APR for the first year or first 18 months. Then they will hit you over the head with a hefty APR. If you have a balance after your 0% APR time period expires, you could face a great deal of interest coming your way. With more interest, you’ll have less room available to even use the card and acquire rewards. Shoppers should be sure the APR isn’t too high. To avoid extra debt, you will also want to keep balances low and make payments on time. If you can’t keep the balance low or pay on time, you shouldn’t be signing up for the card.

5. Find The Best Sign Up Bonus

Sign up bonuses for travel rewards credit cards are often one of the main reasons to even get the card. You can, in most cases, score anything from several hotel nights to a free international flight within the first few months of having the card. The sign-up bonus is generally the fastest and biggest reward you will acquire from the card. In other words, it’s important to pay attention to when shopping for a travel rewards credit card.

Most cards will give you a few months to make a purchase or purchases of a certain amount in order to collect the sign-up bonus. For example, you might get 50,000 points if you spend $3,000 on the credit card in three months. If you don’t think you will make $3,000 worth of purchases in 3 months, the card might not be for you. If you can’t acquire the sign-up bonus, you are missing a lot of the card’s benefits. While you might not think you could spend that amount of money in three months, think about your monthly living expenses. Rather than having all your bills paid through a checking account, you can use the card instead and pay it from your bank account. By going this route, you can often acquire the sign-up bonus easily with purchases you already have to make.

Sign up bonuses can range from 25,000 to 100,000 points or miles. Also, it is important to note that sign up bonuses can change. Special offer periods are often the best time to sign up for maximum sign up bonuses. Shoppers should also be sure they understand what their points equal. If you get 50,000 miles for a sign-up bonus, what does that equal in terms of a flight?

6. Do The Math on the Cost Per Mile/Point

best travel rewards credit cards

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The foundations of a travel rewards credit card are the cost per mile or per point. It is essential to calculate how much you will spend and how many miles you will get from that purchase. First, look at the card you are considering. Look for what the cost per point or per mile maybe. For example, the Chase Explorer card lends 2 miles for each $1 spent on United and 1 mile per $1 spend on other purchases. If you book a United flight for $300, you will earn 600 miles for that purchase. If you book an American Airlines flight for $300 on that same card, you acquire 300 miles. Clearly, if you don’t plan on ever flying United, this card would be difficult to acquire a lot of miles. Make sure you are acquiring enough miles per $ spent on the card to be worth it in the long run.

7. Determine If Your Can Maximize Your Rewards Through Shopping + Dining

While you can acquire rewards based on your everyday spending, many travel rewards credit cards also have online shopping portals where you can shop for everyday items that you might need. These portals can help you acquire even more points than the basic cost per mile/point. For example, a certain retailer might be offering 5x the points for every $ spent. You can boost your rewards a great deal by taking advantage of these kinds of offers. However, you should make sure that the offered shops are ones you actually frequent.

In addition to just shopping online and earning extra rewards, many of these cards also have partnered dining programs where if you eat at certain restaurants you can earn X# of miles per dollar more than your standard reward. The key here is you must sign up for these offers and you must shop through your credit card’s portal. If you just buy from a store on your own and not through the portal, you often won’t get the bonus in most cases.

8. Uncover The Card With Special Perks For You

travel rewards credit card tips

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A travel rewards credit card isn’t just about earning miles through spending. The card should also come with its own set of perks that are catered to you. Every card is somewhat different in the perks it offers. Some added bonuses to going with a card can include Global Entry memberships, lounge passes, free checked baggage or priority boarding. You need to examine what else comes with the card to make it worth it. The special perks are also where you tend to get back your annual fee.

If you generally check a bag for $50 round trip and fly every three months, you are spending, at least, $200 a year on checked baggage. A card with the free checked bag perk might be for you just to save that $200 a year. If you fly internationally constantly, the Global Entry membership perk can save you time and money spent coming and going abroad. Find the card with the perks you know will save you time, money and lend a little extra luxury to your travels.

9. Frequent International Travelers Must Be Weary of Foreign Transaction Fees

In addition to an annual fee, many travel rewards credit cards have a foreign transaction fee. What this entails is quite simple. If you buy something abroad and you use your card, the purchase will face a certain percentage of a fee. For quite some time, Capital One was one of the few travel rewards credit cards that offered no foreign transaction fees. Luckily there has been a shift with more and more travel credit cards offering no foreign transaction fees. One of the main areas where you can acquire the most points and miles comes while you actually travel. If you are being hit with a fee every time you take out your plastic, the punishment can’t match the reward. If you frequently travel internationally and are shopping for a travel rewards credit card, consider cards with low or no foreign transaction fees.

10. Are The Rewards Easy To Collect?

best travel rewards credit cards tips

Travel rewards credit card shoppers will need to do a bit of digging for our final tip. Are the rewards easy to collect? While it sounds like a simple question, some cards can make the rewards collection process a bit difficult. If you acquire all of these points and rewards, you need to make sure they can be transferred to your airline mileage program or hotel reward program easily and seamlessly. You don’t want to have to wait weeks on end to use the points you have already acquired.

Also, shoppers should be aware than some perks attached to the card have their strings attached. You might think you will just automatically get that free checked bag with your airline on every flight. However, that perk is only available if you purchase your ticket on that card. Credit cards can be crafty and attach their strings to their rewards cards. Understand the collection process for your rewards before you sign up.

Your Turn…

Do you have experience shopping for travel rewards credit cards? Share your tips for finding the right card with us in the comments below.