Everyone should have a credit card that garners some sort of reward. If you’re just using cash or debit cards then you aren’t cashing in on the many free offers and rewards that are offered to you as a traveler.
It may be tough to pick the right travel credit card. There are many things to understand in the travel credit card world. However with knowledge comes power, and free travel! Some of the best travel credit cards offer over $1000 worth of free rewards just by signing up!
A responsible traveler should have a great travel credit card. And anyone with great credit should have a travel credit card. But why should you get a travel credit card – what is the big deal? We are about to answer that for you and include information on our favorite credit cards.
After years of travel and plenty of money spent on travel, we’ve tried just about every travel credit card available, here’s our advice to you.
Why Do You Need a Travel Credit Card?
So you can earn points that are redeemable for free travel. Who Doesn’t Love FREE TRAVEL?
We love to earn a welcome offer or signup bonus when we get a new travel rewards credit card. These introductory offers provide a large mileage or points bonus once you meet a minimum spending requirement. This can often mean free flights, hotels, or even cash in your pocket.
To receive a signup bonus or welcome offer you need to make either a single purchase or meet a spending threshold in a certain timeframe. This may vary from $500 to $8,000 in the first 90 days. The most common we find is around the $3,000 in the first three months mark for premium travel rewards credit cards. Welcome offers often change so always verify the offer before submitting your card application.
No need to be afraid of high-minimum spending cards as they often offer the largest rewards. However, it always best to look at your average spending or future purchase and verify that you will be able to meet the minimum spend requirements. Of course, you could go out and apply for a ton of cards, but if you miss the meet the minimum spends you could miss out on the welcome offers. So take it easy and be realistic with your credit card goals, it’s always best to take a smart and cautious financial approach to rewards credit cards. You don’t want to put yourself into debt applying for credit cards an buying needless items.
When we know we have a big purchase to make. Like a new camera or laptop, we will apply for a new credit card with a sign up bonus and put the new purchase on that card. If the credit card has a $2000 minimum spend in the first three months and I buy a $1500 laptop, all I have to do is put a few grocery store trips on that card moving forward.
It Costs You Nothing
I don’t pay for anything in cash unless credit cards are not accepted. We’ve put things like an entire car purchase on our credit card down to a piece of candy for $1. Why? For every dollar I spend I earn points or miles.
I’m going to spend the money anyway, so I may as well get rewarded for spending the money and paying for it with a credit card. If I paid for my $6000 car purchase in cash I would get the car, but I wouldn’t have gotten 12,000 points (2x points per dollar spend). 12,000 points is equal to $120 of travel credit with my Capital One Venture Card. It cost me nothing to earn that $120!
No Foreign Transaction Fees
One of the most important features we look for in a travel rewards credit card is no foreign transaction fees. It’s become so ubiquitous with many travel credit cards we take it for granted. If I see a travel credit card that charges foreign transaction fees I am actually surprised.
However, many other debit cards or basic credit cards often come with a 1-3% surcharge on any transactions that happen in a foreign currency, and that can really hurt when traveling abroad.
If the majority of your spending is done at home you can still use a credit card with foreign transaction fees to earn rewards, but you may want something better for when you travel internationally. No travel credit card should come without the feature these days!
Zero Fraud Liability
Many travel credit cards come with something called Zero Fraud Liability. This essentially means that if your card is lost or stolen and someone goes on a shopping spree with it you are not responsible for those charges. This came extremely useful for us when we were in Mexico and our waiter swapped our Chase card out for someone else’s expired one.
We didn’t realize it until the next day. When I checked our online statement someone had went to an electronic store in Tulum to go shopping. I called Chase, reported it as fraud, and was not liable for those charges.
Rental Car Insurance
The best travel credit cards provide some sort of rental car insurance. For instance with the Chase Sapphire Reserve card, if you pay for your entire rental car reservation with your card. You are then covered with their primary insurance. That means the coverage from your card will pay out before your personal insurance does.
The Chase card covers up to $75,000 for car rentals that are 31 days or less. That means you will not be held responsible for loss, theft, or damage to the rental car.
This is a huge benefit. Car rental companies up-sell and scare customers into buying their very expensive auto insurance (usually an extra $20-$30 per day of the vehicle rental). We save thousands by having the Chase Reserve card and declining rental car coverage around the world.
Remember that to get this benefit you need to pay for your car rental with the Chase card and decline any collision damage and loss damage waiver coverages from the rental car company.
The Chase Sapphire Reserve Card is one of the only travel credit cards that offers such lucrative coverage, but many other travel credit cards will also cover some portion of rental car insurance as well.
Because of this, we rarely, and I mean rarely in the 50+ rental cars we’ve had ever accept a car hire companies insurance.
Lost Luggage Insurance
A good travel credit card will cover certain aspects of your trip should you need it. Things like baggage delay, trip delay, and lost luggage insurance.
This one just helped us as United Airlines lost Cameron’s bag last month. Not just delayed – they actually lost it. The Chase Sapphire Reserve Cards covers you for $3000 per person per trip as long as the airfare was purchased with the Chase card.
Baggage Delay Insurance
As mentioned many travel credit cards will also cover you (to some degree) for baggage delay. That means if your bag is delayed for more than six hours your card will cover you for $100 per day for emergency supplies. Of course, you have to purchase the airfare, bus, cruise, or train ticket with the said travel credit card.
Travel credit cards often come with plenty of great perks. This means loyalty status, upgrades, free nights, priority boarding, travel credit, free checked bags, TSA precheck, Global Entry, and a lot more. Premium cards are often loaded with special perks like our favorite, a Priority Pass card (airport lounge access around the world) with the Chase Sapphire Reserve.
There are other important perks that are travel-specific such as car rental insurance, baggage insurance, and trip delay insurance (see above). We love these features as they give us peace of mind when traveling. When shopping for a new travel credit card we like to look at any stand out special features.
Besides the initial welcome offer, many credit cards offer one point for every dollar spent. However, our favorite cards often provide a category spending bonus on particular purchase categories, retailers, airlines, or hotel chains. This is great with branded cards such as the airline or hotel rewards credit cards.
One of our favorite cards the Chase Sapphire Reserve offers amazing 3x points per dollar on travel or the Marriott Bonvoy Boundless that gives 6x per dollar on spent at participating Marriott hotels. If you use a particular company regularly it’s great to get a branded card to earn more points.
Our Number One Go To Travel Credit Card
Chase Sapphire Reserve
*Best Premium Travel Rewards Credit Card*
The Chase Sapphire Reserve is our daily driver when we’re traveling and the first card we’ve continued to carry despite a high annual fee, $550. This is due to the great perks and benefits that come with the card. Notable features such as a Priority Pass, $300 annual travel credit, primary CDW car rental insurance and credit up to $100 for TSA Precheck or Global Entry are awesome features. In particular, the Priority Pass has made flights much more enjoyable with easy lounge access around the globe. The card also provides primary car rental insurance a key feature for travelers who rent vehicles. We place over the Amex because of the lower annual fee and we find a better value with Chase Ultimate rewards. On top of all that earning is easy for frequent travelers as travel charges earn 3x the points.
- 3 x Points per dollar on travel (excludes $300 annual travel credit)
- 3 x Points per dollar on dining
- $300 Annual travel credit
- Complimentary Priority Pass giving worldwide lounge access
- Complimentary year of Lyft Pink
- Ability to transfer points
- Redeem points through Chase Ultimate Rewards at 1.25x multiplier for travel.
- No foreign transaction fees
- Trip interruption and baggage delay insurance
Sign Up Bonus
- 50,000 Ultimate Rewards after you spend $4,000 on purchases in the first three months.
- 3x miles per $1 on travel worldwide
- Lounge pass is an awesome benefit for travel
- Redeem points on Chase Ultimate rewards, and you get 20% off travel
- Primary insurance coverage on car rentals
- $550 annual fee not waived the first year
Our Second Favorite Travel Credit Card
Capital One® Venture® Rewards Credit Card
*Best All Around Travel Rewards Credit Card*
This is one of our favorite credit cards to recommend for travelers. It has a low annual fee, an easy rewards program, and a great early spend bonus. When combined with awesome perks such as 10x miles when booked and paid via Hotels.com/venture, annual credit up to $100 for TSA Precheck or Global Entry fee, and a wide range of points transfer partners it makes it a winning travel credit card. We personally love the 2 x miles on all purchases which makes this card a great all-around card.
- 2 x Miles on all purchases
- No foreign transaction fees
- Ability to transfer miles
- Extended warranty
- Travel accident insurance
Early Spend Bonus
- 50,000 miles after you spend $3,000 on purchases in the first three months.
- Waived First Year, $95 After The First Year
- Great early spend bonus 50,000 miles ($500) after $3,000 spend in 3 months.
- 2x miles per $1 spent on ANYTHING
- Update to $0 annual fee for the first year; then $95
- Easy reward redemption. You can redeem your miles for any travel expenses right on their website. This is a great feature since you can book with any airline, any car rental company, and any hotel and don’t have to stick to certain affiliates.
- No Foreign Transaction Fees
- Great Customer Support
- No brand perks
What If You Have Poor or No Credit?
Some of our favorite rewards cards are premium cards that are only available to people with a high credit score. If you have a low credit score of 650 or less you’ll likely find yourself declined by many rewards cards. Unfortunately, there is no quick fix for rebuilding a credit score. However, there are a number of ways to earn credit and a few points-earning credit cards that you can utilize along the way.
Credit scores can improve over time and it does not take years for the score to begin improving with some smart moves. You don’t need to be debt-free either with smart money management it’s possible to improve your score and end in a better financial place. Financial institutions and credit unions all have products for people with poor or no credit and can help you reach a strategy to improve. You just need to be proactive, we often make phones call to increase credit lines or move along a credit card application. Check out these cards for no credit and these ones for rebuilding credit.
Here are a few ways to improve your credit score:
- Make use of AnnualCreditReport.com to get a free copy of your credit report. This will allow you to see your credit score, any delinquent accounts, and give you information on how to improve your score.
- Apply for a secured credit card. This is great for those with no credit. A secured credit card requires you to place a cash deposit to guarantee your credit line but operates much the same as a normal credit card. Over time you can increase your credit line and help you on the application for a regular credit card.
- Dispute anything that appears incorrect on your credit score.
- Settle any delinquent accounts such as medical bills or old lines of credit. It’s also possible to consolidate your debt. This includes credit card debt, a great strategy is to open a new line of credit with a lower interest rate that allows for free credit transfers. This can help you get a handle on the debt.
- Operate as an authorized user (additional cardholder) on another’s credit card else with good credit such as family or a spouse. This allows you to inherit some of their good scores, they are in effect vouching for you. Make sure that they are responsible for how they use their credit cards and that you are as well because you both impact each other’s scores.
- Pay all of your bills on time and if possible always treat your credit card as a debit card. We never spend money we don’t have and pay off our credit cards in full every month with auto payments.
Before we left to travel around the world we had saved up over $50,000 in cash and over one million miles and points through credit cards. Since that time in 2015, we have earned even more miles and points through credit card hacking. It has allowed us to travel for free many times over.
With the right travel hacking strategy and credit card approach, you too can save tons of money on travel.
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