Travel rewards · continued
Best Travel Rewards Credit Cards
Who Should Skip a Travel Card
Travel cards are not for everyone. If you travel infrequently, an annual fee can easily exceed the value you extract, and even a no-fee travel card may earn less on everyday spending than a straightforward cash-back card. For many people who rarely fly or stay in hotels, a simple cash-back card delivers more usable value with less complexity and no need to manage points and transfers.
The most important rule applies to every rewards card: the value of any rewards program is erased if you carry a balance and pay interest. Travel perks and points are only worthwhile when you pay your statement in full each month. If carrying a balance is a risk, prioritize a low-cost card and paying it off over chasing travel rewards you will not truly benefit from.
Frequently asked questions
- What is the difference between flexible points and co-branded travel cards?
- Flexible points cards earn a currency you can redeem through an issuer portal or transfer to partner airlines and hotels, giving you options across brands. Co-branded cards are tied to a single airline or hotel and reward loyalty with brand-specific perks like free checked bags or free-night certificates. Flexible cards suit travelers who spread spending across brands, while co-branded cards suit those loyal to one airline or hotel group.
- How do I know how much a point or mile is worth?
- A point's value depends on how you redeem it. Redeeming through a travel portal usually gives a fixed value per point, while transferring to partners can be worth more or less depending on the specific award. To compare cards, translate points into cents per point for the redemptions you would actually use, then multiply by the earning rate to find your effective return on spending.
- Is a travel card with an annual fee worth it?
- It can be, but only if you use enough of the benefits to exceed the fee. Add up the concrete value of perks you will realistically use, such as travel credits you would spend anyway or lounge access you will actually visit, and compare that total to the fee. If the value you use is higher than the fee, the card is worth it; if not, a lower-fee or no-fee card is a better fit.
- Do travel cards charge foreign transaction fees?
- Many travel cards waive foreign transaction fees, which makes them good companions for international trips, but not all do. Because this fee is charged on purchases made abroad and can add up quickly, confirm that a card has no foreign transaction fee before relying on it overseas. Some non-travel cards charge this fee, so it is worth checking any card you plan to use internationally.
- Should I get a travel card if I rarely travel?
- Probably not. If you travel infrequently, an annual fee can exceed the value you earn, and even a no-fee travel card may earn less on everyday spending than a simple cash-back card. Many occasional travelers get more usable value from a straightforward cash-back card, which avoids the complexity of managing points and transfers you would rarely use.
- Do I lose the value of travel rewards if I carry a balance?
- Effectively, yes. Interest charged on a carried balance typically costs far more than the rewards you earn, so paying interest cancels out and often exceeds the value of your points or miles. Travel rewards only make sense when you pay your statement balance in full each month. If carrying a balance is a risk, focus on a low-cost card and paying it off rather than chasing rewards.
Advertiser disclosure: general information only, not financial advice. Confirm current terms on the issuer's official site before applying.