When you’re in the market for a new travel credit card, you don’t want to apply to the first one you find. If you google “best travel credit cards” you’re likely to come across articles selling you on why XYZ credit card is the best. Ultimately, you need to find the right card for you. So what factors do you need to consider?
Spending Habits and Travel Goals
Take time to consider what your spending habits and travel goals are. For example, are you brand loyal when it comes to airlines? If the answer is no and you just fly the cheapest options, then it wouldn’t make sense to get an airline-specific credit card. If you spend a majority of your money on restaurants, then you’ll want to find a credit card with high earnings on dining purchases. Bottom line: consider what you’ll mainly be using your card for, think about your personal preferences and how you’ll want to redeem points/earnings.
Foreign Transaction Fees
Regardless if you frequently fly internationally or not, it’s crucial to get a card with zero foreign transaction fees. Just one trip abroad could cost you an extra couple hundred dollars or more! Most travel credit cards will have zero foreign transaction fees so just double check and make sure.
Sign-Up/Welcome Bonus
This is a non-negotiable because every good travel credit card will offer some sort of welcome/sign-up bonus. If there aren’t any at the time you are looking, I recommend waiting for them to be released. Sign-up/welcome bonuses are an easy way to get free rewards from the credit card for purchases you are going to make in the first few months anyways. Free rewards that you can redeem for free and travel for free. Free.
Rewards Structure
Many travel credit cards will have their own rewards structure outlining how you can earn points/miles and what you can redeem them for. Going back to the first point of knowing spending habits and travel goals – you want to make sure that the credit card you go with checks all your boxes.
Additionally, check to see if the credit card offers temporary rewards like statement credits for purchases or seasonal deals. For example, a credit card may regularly update deals for their cardmembers where you can add the offer to the card, make a purchase at Starbucks (for example) and get 5% back in the form of a statement credit. Another example would be a credit card company offering 2x more points on gas purchases for a 3 month period.
Special Perks and Added Benefits
In addition to earning points/miles and sign up bonuses, great travel credit cards will offer additional perks. Some of these could include free airport lounge access, free trip insurance, complimentary subscriptions, reimbursement for TSA PreCheck and Global Entry, and so much more. You definitely want to look into added rewards and see what else you may be getting for free with your credit card. Which brings me to my last point…
Annual Fees
Personally, I think annual fees get a bad rap. I get it – a $250 or $550 annual fee can seem very daunting while a card with a low or zero annual fee can look very desirable. It honestly depends on the benefits and what you get with the card. Don’t judge a credit card too harshly by its annual fee! Here is why:
Let’s say your card has annual fee of $550. With it, you get reimbursed up to $300 worth of travel – think Ubers, train tickets, and more. This now balances out the annual fee to $250. Prior to having the card, you might spend $30 on food/drinks/snacks each way at the airport. So if you fly at least 3 times in a year, you’re looking at spending around $180 at the airport. With your card you get free airport lounge access, which provides free unlimited food/drinks/snacks. Now you’re saving $180. That balances out the cost of the annual fee to $70. If you apply for Global Entry and TSA PreCheck (which costs $100) the card also covers that. You’ve just made all your money back on the annual fee, and then some.
Now this is an extreme and very specific example, but I’m sure you get the point. The benefits that come with premium cards and annual fees can easily pay for itself.
Now that we’ve covered the main things to consider when getting a new travel credit card, I have no doubt you’ll find the perfect match for you. Happy Traveling!
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