Travel is expensive — when you’re paying for everything in cash. While that’s how many travelers do it, some use travel rewards cards. These cards earn rewards, in the form of points or miles, that you can put toward travel expenses. You could potentially book business-class airfare, a five-star hotel stay, or your next rental car in points instead of cash.
It’s probably no surprise that travel cards are popular with consumers. Nearly one-third (32%) of Americans have them, according to credit card research by The Motley Fool Ascent. They won’t be a match for everyone, though. Here are the signs that a travel card is worth getting in 2024.
You plan to take at least one trip this year
As you’d expect, travel cards are best suited for frequent travelers. The more you travel, the more value you’ll get out of their rewards and other travel perks.
That doesn’t mean you need to travel all the time (although you’ll get a lot out of a travel card if you do). If you know you’ll go on at least one trip this year, a travel card could help you spend less on it.
One of the ways a travel card could help you save big is with a sign-up bonus. Many travel cards have valuable sign-up bonuses, including some that are worth $500 to $750 in travel. You could apply for a travel card, earn the sign-up bonus, and use that bonus to help cover the cost of your next vacation.
Do you always fly with Delta because you live near one of its hubs? Or do you normally stay in Hilton hotels because you like its properties and loyalty program? If you’re loyal to a specific brand and you choose it often, you could get special benefits by opening one of its credit cards.
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Airline credit cards normally include perks like free checked bags, priority check-in and boarding, and discounts on in-flight purchases. Some of the higher-end options even include airport lounge access through a membership to the airline’s lounge program. You’ll also earn frequent flyer miles on the purchases you make with your airline card.
Hotel credit cards often get you elite status in the hotel’s loyalty program. This could be complimentary silver, gold, or platinum status, to give you a few examples. Many include free night certificates that you can use at expensive properties. And just like with airline cards, when you use your hotel card, it will earn points with that hotel that you can later redeem for free stays.
You don’t mind a learning curve
Travel credit cards can be a bit complicated. They often have lots of benefits, which is usually a good thing. But it also means you need to keep track of those benefits to get the most value from your card. That can be challenging, especially with cards that have spending credits for specific types of travel purchases, or perks that you need to activate to use.
It also takes time to learn how to use your card’s travel rewards. Redemption options vary depending on the card you have. Some cards give you a variety of options, including transferring points to airlines and hotels or redeeming them directly for travel purchases. And the value you get often depends on how you use your points.
If you don’t mind learning about a travel card’s benefits and rewards program, you could save quite a bit on travel. But if you’d rather keep it simple, and save yourself some time, cash back credit cards are better for that.
You’re OK with paying an annual fee
Most travel cards charge an annual fee. The amount depends on the card. Some have fees in the sub-$100 range. Others are much more expensive, ranging from $250 to $695, and have more benefits. As a general rule, if you can use most of a travel card’s features, you’ll come out ahead on the cost of the annual fee.
However, if you’re only interested in no annual fee cards, then you’ll probably want a cash back card. Some no annual fee travel cards exist, but they don’t have many perks, which means they don’t offer much value. To get a quality travel card, expect to pay at least $70 to $100 a year for it. Remember that you’ll likely save far more than that on travel.
Travel cards can be an amazing deal for the right cardholder. If you travel often and don’t mind a learning curve or an annual fee, this type of credit card could pay off for you.
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