Travel Tip Tuesday #3 - Why Invest In A Travel Rewards Card (2024)

FAQs

What does a travel rewards card do? ›

Travel rewards credit cards can help you earn miles or points that you can then redeem for free flights, hotels, and other travel expenses. Some travel rewards credit cards offer additional benefits and perks, including airport lounge access, introductory points or miles bonuses, and free checked bags.

Big spenders can benefit substantially from travel credit cards, especially ones that offer annual spending bonuses. Travel cards offer generous incentives for substantial spending. Rewards range from airline and hotel elite status to free hotel nights and even companion passes.

Don't be loyal. Just go on price. If you know you aren't going to meet the elite status threshold, why pay extra? Unless you have a real affinity for one airline, the benefits you get for your “loyalty” aren't worth the added price you're going to pay for your fare.

How travel credit cards work. Generally, travel credit cards allow you to earn rewards—usually in the form of points or miles—by making everyday purchases. And you can use them like you would any other credit card. One important thing to note is that each travel card may offer a different rewards program.

Travel cards offer several advantages that a credit card can't compete with, including the ability to load multiple foreign currencies, secure PIN protection, locked-in exchange rates, no foreign transaction fees, online account management, and the option for emergency assistance.

Potential to avoid currency conversion fees: If you use a credit or debit card while travelling, your institution may charge you currency conversion fees for each transaction. With a travel card, your funds will already be in the currency of the country in which you are travelling, so this may be avoided.

Simply put, travel credit cards aren't typically worth it if you don't travel much. You won't be able to take advantage of many of the perks and benefits — like statement credits for hotel stays, airline fees and other travel-related purchases — or earn bonus points or miles for travel purchases.

Credit cards are generally the recommended choice of payment method to use when traveling. First, credit cards offer convenience and unparalleled security.

Alaska, Hawaiian and JetBlue lead the way on cash value per mile. Sam Kemmis is a travel rewards expert at NerdWallet specializing in airline and hotel loyalty programs.

What airline is the best? ›

Delta Air Lines took the crown—again. It's Delta's third consecutive win and sixth in the past seven years. (Southwest dethroned Delta during the pandemic travel plunge of 2020.) The airline didn't fly away with the crown, but shined in a few areas and placed no worse than fifth in any category.

Foreign currency rate fluctuations

A credit card is susceptible to real-time currency exchange rates, leading to uncertainties in the final bill amount. A forex card, conversely, locks in the exchange rate at the time of loading, shielding users from fluctuations during their travel.

A travel money card is a card that you are able to load currencies onto and then use to make purchases and withdraw cash at ATMs. They work similarly to a debit card, in that you deposit a certain amount into the account, and you don't typically have a credit limit.

Chase travel credit cards are some of the most popular and beginner-friendly cards. Perhaps you've heard a friend or family member totaling up all the great rewards they're redeeming and you want in.

If you're heading overseas on holiday or on a business trip, getting a travel credit or debit card could be one of the cheapest ways to spend while abroad. Often, a regular bank account debit card will charge you hefty fees and a poor exchange rate if you use it abroad for a transaction or cash withdrawal.

While you typically need a FICO credit score of 700 or better to qualify for a travel card, several solid cards are within reach for consumers with limited credit histories.

To see how much value you can get out of your rewards on an individual flight or hotel stay, divide the cost of a booking in cash by its cost in points or miles. For example, a flight that costs $139 or 21,500 points will offer about 0.6 cents per point in value ($139 / 21,500 points = ~$0.006).