Travel credit card (1)

It is a card that provides rewards to a client on travel-related spending.It is in the form of reward points or miles given to the client that he used for making purchases related to travelings, such as hotel rooms, flights, and planes. The rewards can be profitable, but they can also come with annual fees. A Card Holder can enjoy many perks related to traveling such as elite hotels, free traveling, and using expensive airlines.

How do travel credit cards function?

The person who travels a lot also spends a lot on travel-related expenses such as hotel stays, airfare, restaurants, and transport rents. The use of a travel credit card helps the consumer to save money on such expenses. A Co-branded card includes the consumer into the brand’s membership club and rewards for all kinds of spending. For example, if a consumer uses a Delta credit card, it rewards him with SkyMiles that can be used in future traveling. Many Co-branded cards provide membership tiers that facilitate a cardholder with a variety of benefits. But the redemption options are limited to the specific brand only. Whereas, general travel cards reward all kinds of spending and have more redemption alternatives. Comparative to other reward cards travel reward credit card offers elevated earning rates.

Why use a travel credit card? (2)

COVID-19 has fiercely altered the way of living and traveling. A travel credit card offers a reward on routine purchases as well, so a person can enjoy its perks whether he is traveling in this pandemic or not. Furthermore, many card issuers have added the options of redemption which allows the consumer to redeem his rewards for everyday purchases such as home improvement, grocery store, and food delivery. Whether traveling or not, the redemption option makes it easy for the consumer to earn rewards, which are equally important and incredibly valuable.

Who should have a travel credit card?

  • Globe-trotter; If a person travels all the time for pleasure or business purpose
  • s, plans for big vacations once a month or even a year, and spends so much on traveling then travel credit cards is a good choice.
  • If the candidate lives far away from the family and wants to see his sibling or parents then a travel credit card is a ticket to meet them more often.

Types of travel credit cards

  • Airline credit cards

Credit card issuers partner with airlines and offer co-branded travel rewards credit cards. Typically a cardholder earns 2 miles against each dollar when he uses the card for flights with the partner airlines. He generally earns 1 mile per dollar when using it for purposes other than traveling.

Airline cards deliver a more comfortable and economical flying experience.It offers a variety of benefits including priority boarding, free checked bags,discounted access to lounges, and discounted in-flight purchases.

  • United Explorer card is the best choice for airlines as it offers the highest reward per mile among other airline credit cards.
  • Hotel credit cards

These are the most valuable choice when used to make a reservation in apartments with participating hotels. Like airline cards, a consumer gets high rates of earning when use to book accommodations and fewer rewards rate for other types of purchases.It provides bonus rewards if a cardholder spends a certain amount within the first few months. Points are redeemed either through the hotel brand itself or by its partners.

  • Marriott Bonvoy Brilliant American Express Card: Due to its large one-time bonus it is considered the best card for hotels.
  • General travel credit cards

If a consumer uses a general travel credit card then his rewards are not bound to a specific travel brand. He can redeem rewards for many purchases including booking trips via the travel portal of the issuer, purchasing gift cards, statement credits, or transferring rewards to others. In comparison to hotel or airline credit cards, generally travel credit cards are more compliant. So it is a better choice for those who travel to their destination with fewer options for airports or hotels and who are not loyal to a specific brand.A consumer can travel more and worry less about travel restrictions or blackout dates because he is not bound to a sole provider.

Pros

  • When a consumer uses a travel credit card for travel-related expenses, then it arises miles and points faster than other General rewards credit cards. It gives the best redemption values such as statement credits, or cashback.
  • When a person makes a transaction in foreign countries through a general credit card, then a 3% fee is typically charged on every purchase. Travel credit card waives this transaction fee.

Cons

  • A cardholder has to pay an annual fee to keep his card active.
  • Travel credit cards also consume customer’s time in working with cardholder’s service.
  • Limited available seats and blackout dates are the restrictions of using a travel credit card.

Best overall travel credit card.

  • Chase sapphire reserve; Best overall travel credit card due to its highest one-time point bonus, high rate of earning rewards, and annual travel credit. The annual travel credit of a passionate traveler can justify the annual fee of this card.
  • Capital One venture rewards credit card; Best choice when to fly with any airline, to stay at any accommodation, at any time and no distress about blackout dates

No annual fee travel credit card

Some card issuers charge an annual fee from the cardholder to keep the card working. This might sometimes overweigh the total earnings of the cardholder. But many issuers offer no annual fee travel credit card

  • Capital One venture one rewards credit card; Person using this card can earn unlimited rewards with no annual fee. It provides a decent one-time offer and flexible redemption alternatives.

Best flat-rate travel credit card.

These cards offer the same amount of rewards on every travel-related purchase a client makes. A client can get rewards for a variety of travel-related purchases.

  • Wells Fargo propel American Express card; it earns 3x reward points on travel ( Hotels flights ride-hailing taxis car rentals), gas stations, and dining.

References

  1. https://www.investopedia.com/best-travel-credit-cards-4801017
  2. https://www.cardratings.com/best-travel-rewards-credit-cards.html