Traveling can be expensive if you allow it to be. However, there are ways to save on your hotels, flights, rental cars, and more, just by understanding a bit about what credit card(s) you should be using. Here are some things you should know when looking for that perfect travel card.
1. What are you getting points for?
Travel credit cards let you earn points or miles on your spending. While most let you earn at least a nominal amount of points on every dollar you spend, there are a few that limit your earning power to specific spending categories, so you’ll want to be aware of that. Also, most cards let you earn bonus points on certain categories, for example, a hotel card like the American Express Hilton HHonors card gives you 7x points for every dollar spent at one of their hotels or resorts, while an airline card like Southwest Rapid Rewards, enables you to earn 2x points per dollar spent on their flights.
2. Are there any kind of “signup” bonuses?
Many travel cards will offer new cardholders an enticement to signup in the form of a bonus. Typically this point bonus is earned once the card is opened and you hit a certain spending threshold within a set number of days, usually 90. Let’s look at an example. As of publishing time, the Marriott Rewards credit card was offering a signup bonus of 30,000 points once you’ve spent $1,000 in the first 90 days. This particular bonus is worth roughly $300 towards Marriott hotels stays! It definitely pays to compare signup bonuses in advance of signing up for your card as that’s where the best deals are to be had.
3. What’s the APR?
The APR on your credit card shows the range of interest rates the bank can charge you on any balances you don’t pay off in full each month. Issuers will sometimes offer a special introductory APR as well to rope in new cardholders. The most popular intro APR deal is 0% for the first 12 months. This can be beneficial for folks who are looking to make a large purchase and need some time to payoff the entire balance.
4. Are you limited on what your points can be redeemed for?
Rewards flexibility is always good. Many travel credit cards will allow its cardholders to use points towards a variety of rewards while others offer less flexibility and are, as such, less desirable. When you’re looking at airline cards in particular, you’ll want to be aware that certain airlines allow you to fly with their partner carriers at the same redemption rate as if you were flying on their airline. Other airlines are more stingy and forbid you from redeeming your points with any other airline but theirs.
Additionally, some travel cards will offer better rates on redemptions towards hotels or airlines (depending on the card) but also offer the opportunity to use your points towards a “statement credit” which is effectively like receiving cash!
5. Can you use your points whenever you want?
Thinking about using your miles to fly over the Thanksgiving weekend, or your hotel points to secure that killer hotel in South Beach at Spring Break? Think again. While some cards do allow you to book your rewards travel whenever you want, many others have what are known as blackout dates. Blackout dates are days that travel companies realize are seasonally profitable and busy, and as such, they refuse to allow cardholders to redeem their travel points.
