When Are Travel Credit Cards Worth It?

What Is a Travel Credit Card?

Travel credit cards are rewards cards that you can use to earn points or miles. There are three common types of travel credit cards, and the value of the rewards can depend on the card and the rewards program it's part of.

General Travel Credit Card

General travel rewards credit cards are part of a card issuer's rewards program. Some rewards programs call their rewards points—others call them miles. Either way, the programs often give you several options for redeeming your rewards:

• Use the rewards to book travel through the card issuer's travel portal
• Use the rewards to offset travel costs that you paid for with your card
• Transfer your rewards to partner airline and hotel loyalty programs and then book a rewards flight or stay

There could also be many non-travel redemption options, including getting cash back, but the cards are often advertised and geared toward people who want to use the rewards for travel.

Premium general travel credit cards have annual fees and come with travel-related perks, such as statement credits to offset the cost of a Global Entry or TSA PreCheck membership, access to airport lounges and status in select partner loyalty programs.

Find the best airline credit cards with Experian.

Airline Credit Card

Airline credit cards are specific to one airline. You earn miles or points in the airline's loyalty program when you use your card, and you can redeem them according to the frequent-flier program's rules.

Many airline credit cards also offer perks when you use the card to book your flight on the corresponding airline, such as:

• Priority boarding
• Free checked bags
• Discounts on in-flight purchases

Some airlines' premium cards may come with extra benefits, including access to the airline's airport lounges, discounted companion tickets and bonus rewards each year.

Hotel Credit Card

Hotel credit cards are specific to a hotel chain. You earn points in the loyalty program and can use them to book a hotel stay, upgrade your booking or any other options that the program allows.

Additionally, cardholders might receive status in the hotel's loyalty program, which could also give you access to early check-ins, late check-outs, free upgrades and free breakfast or dining credits. Some cards also offer additional perks, such as a voucher for a free night every year.

Pros and Cons of Travel Credit Cards

Although travel credit cards are a popular type of rewards card, they're not the right choice for everyone. Keep the following in mind when you're considering a new card:

Pros

• Could lower your travel costs: This is especially valuable if there's a benefit that you'll frequently use, such as checking bags for free every time you fly with your family. Travel cards also often don't have foreign transaction fees.
• Can make travel more pleasant: Access to airport lounges, getting through security without taking off your shoes, and airline and hotel loyalty status can make traveling nicer.
• Travel insurance benefits: Many travel credit cards (all three types) offer travel-related insurance benefits that can help cover your expenses if your trip is delayed or canceled, your bags get lost or if there's a medical emergency.

Cons

• There's often an annual fee: Many travel credit cards have annual fees, and the fees can be quite high for cards that offer lots of benefits.
• May require a high credit score: You may need a good to excellent credit score to qualify for the most popular premium travel cards.
• Could be restrictive: Airline and hotel travel cards are best when you regularly book with the same company, but that also means you might not shop around for the best deal. Companies also occasionally "devalue" their rewards programs—increasing how many points or miles you need to book a flight or hotel night.

Is a Travel Card's Annual Fee Worth It?

You'll often have to pay an annual fee when you open your card and on each cardholder anniversary. These fees can range from around $50 to over $500, and the cost often corresponds with how many benefits a card offers.

Paying an annual fee might be worthwhile, but it depends on whether you:

• Can afford to pay the fee each year
• Get a lot of value from the card's benefits
• Have the time and desire to track and manage the card's benefits

For example, a card that has a $300 annual fee and gives you $300 worth of travel statement credits each year might be relatively easy to use and justify. If it also comes with access to airport lounges and a statement credit for Global Entry or TSA PreCheck, then you might conclude the fee is worth paying.

However, a card with a $600 annual fee might be more difficult to justify. Even if you can afford it, if it offers many small benefits—for example, $20 toward monthly rideshares or a free food delivery membership—you might decide you don't want to spend your time managing the card.

Should You Get a Travel Credit Card?

Even if you're open to paying an annual fee in general, consider whether a travel credit card is a better fit than the alternatives.

For example, if you plan to use the rewards from a general rewards card to book travel or cover travel purchases, you'll often receive one cent per mile or point you redeem. It's similar to earning cash back that you only use for travel. So, if there's a cash back card that offers a higher rewards rate or lower annual fee, that might be a better option.

However, some general travel cards let you transfer your miles or points to partner loyalty programs, where they might be worth a lot more. For instance, you might be able to use 40,000 miles or points to book a first-class flight or night at a luxury hotel that costs over $1,000 rather than using them to pay for $400 worth of travel.

Airline and hotel cards can also be valuable if you frequently use a specific brand, even if you'll only use the card occasionally for free checked bags or a companion ticket. You might want to use a different card for your everyday purchases, but get the travel credit card for your trips.

How to Choose a Travel Card

Once you decide to get a travel card, you'll want to narrow down the options to a general purpose, airline or hotel card. And, from there, choose the specific card you want. There are often a handful of options from each card issuer, airline and hotel with varying annual fees and benefits. So, here's what to keep in mind:

• Intro offers: A large intro offer might help jumpstart your rewards account and pay for your next trip. But make sure you review the terms and can meet the spending requirement without overspending or carrying a balance.
• Rewards rates: Travel cards often have a tiered rewards program—you earn a different amount of miles or points per dollar depending on where you shop. Try to find a card with bonus categories that align with your usual spending habits.
• Redemption options: Review the redemption and transfer options to see if you'll likely get a good value from your rewards.
• Cardholder perks and benefits: Look over the various cardholder benefits, including travel protections and insurance. Consider which ones you'll regularly use and assess the card's value based on those perks.

Get Matched With Your Next Travel Card

Because your credit history and credit scores often impact which cards you can qualify for, checking your credit can be an important step before applying. You can get a free credit report and your FICO^® Score^☉ from Experian, and receive ongoing credit monitoring with real-time alerts for important changes. Experian can also show you credit card offers matched to your credit profile, and you can filter the results based on your preferences.