Getting and using a travel credit card is one of the easiest ways to save money to allow you to travel longer and more often. These cards offer great rewards and savings that don’t exist anywhere else; if you don’t have one, you’re missing out on a huge opportunity.
Credit cards can be daunting to lots of Americans. Many of us don’t know much about credit cards, how they work, or how to take advantage of them. When you combine that with the mounting credit card debt that exists across the nation, the apprehension is understandable. In this article, I’m going to tell you why you should be using these cards, how to do it in a way that saves you money, and which cards you should consider starting with.
Contents
What is a Travel Credit Card?
While it is fairly self-explanatory, it is worth quickly covering what I mean when I say “travel credit card”. To know this you must first know: what is a credit card? I’m sure many of you already know this, but for those that don’t I’ll give you a brief overview of what credit cards are, before diving into what differentiates a travel credit card from other cards.
What is a Credit Card?
A credit card is similar to a debit card in that it allows you to spend money electronically, without exchanging physical currency. The key difference is that debit cards are directly linked to your bank account and pull money out of that account immediately upon use. Credit cards, on the other hand, allow you to borrow money from the bank that provided you the card. This means that when you purchase something with a credit card, money does not automatically get deducted from your bank account.
Instead of directly taking money from your bank account, the purchase is made using money from the bank you got the card from. Then, you pay back the money spent with the credit card to that bank. If you pay it back in full every month, that that’s the end of it. However, credit cards do offer the ability to make a minimum monthly payment instead of paying in full. In this case interest is charged on the amount not paid, which compounds monthly. This can result in rapidly increasing debt so I recommend always paying your balance in full every month.
One huge benefit to credit cards is that they offer security from scams. This is possible because the money is not drawn directly from your bank account when you make a purchase. With a credit card, if you get scammed you can actually dispute the charge and avoid paying for something you didn’t get, whereas with a debit card you would already be out the money.
Credit cards also often have a rewards program associated with them that can provide a variety of benefits. These benefits can include cash-back, travel perks, no foreign transaction fees, and purchase protection among many other things.
Travel Credit Cards
Travel credit cards are different from generic credit cards because their rewards programs are heavily focused on travel-based rewards. This manifests in different ways for different cards, but some common perks specific to travel credit cards are points transfers to airlines and hotels, and extra points on travel-related purchases.
Here is a good way to look at it: a generic credit card sacrifices high rewards to gain high flexibility, but a travel credit card sacrifices high flexibility to gain high rewards. Basically, with a generic credit card you can expect to get less value per dollar spent than you would with a travel credit card. However, you’ll have the flexibility to spend those rewards on whatever you want. On the flip side, travel credit cards can have higher value rewards, but you can only use them for travel purchases. So, if travel is a high priority thing for you, travel credit cards are awesome; if you’d rather spend that money on other things, you should consider a different type of card.
Why You Need a Travel Credit Card
Many Americans grow up with a perception that credit cards are bad or scary, that they’re a one-way ticket to ever-expanding debt. This is far from the reality. As a credit card user you are in complete control when it comes to going into debt and as long as you don’t spend more than you can afford to, you’ll have nothing to worry about.
I like to view these cards as a way to get at least 1-2% off every single purchase I make. For single purchases this isn’t a lot, but when you use them for everything you spend money on, it adds up quickly.
Even better, that 1-2% off is a low-ball estimate. In reality, if you play your cards right, you can get even more value from your travel credit cards. There are a few ways to do this: sign-up bonuses, transfer partners, and card-specific benefits.
Most travel credit cards offer sign-up bonuses. These are a special offer for new card users that offer huge point bonuses when you spend a certain amount of money within the first 3-6 months of having the card. Typically these bonuses give you about 20,000 – 75,000 bonus points/miles with a spending minimum of $3,000 – $6,000 in those first few months. That is several hundred dollars worth of a value, just for getting the card!
Additionally, you have the ability to transfer your points to various transfer partners. Travel credit cards partner with various airline and hotel brands to allow you to connect your memberships and transfer credit card points to the airline and hotel rewards programs. Sometimes there will even be transfer bonuses where 1 credit card point can be worth 1.5 or 2 airline or hotel points.
Finally, all cards have their own card-specific benefits. These vary from card to card and give you even more ways to save money. Most cards will give you at least 1 point per dollar spend on any purchase, but many will offer extra points per dollars in certain categories such as restaurants or groceries. Additionally, you may get benefits such as rental car insurance, TSA Pre-Check or Global Entry reimbursement, or airport lounge access.
At the end of the day, you need a travel credit card because they save you tons of money. The money you save with these cards help you travel longer and more frequently. If you do it right, there are really no downsides.
How to Use Your Travel Credit Card
Credit Card Safety
When using a credit card there’s really only one rule you have to follow: don’t spend money you don’t have. Follow this rule and there will never be a downside to using or having a credit card. The reason people get into credit card debt is because they don’t follow this rule.
Since credit cards aren’t directly linked to your bank account, it is technically possible to spend up to the card limit regardless of whether or not you actually have that much money. By rule, you are not required to pay off everything you spend using your credit card when you spend it. Instead, you are technically only required to make a minimum monthly payment, and the money you don’t pay off is charged interest. This is how people get into debt and how credit card companies make their money.
Do not do this.
Instead, you should pay off your credit card in full every month. Don’t buy things with your credit card that you wouldn’t buy without it. Pay attention to how much you’re spending and how much you have. Do this and you will never need to worry about going into debt.
Maximizing Value
While simply getting a travel credit card is an important step to saving money for travel, you can level up your benefits by operating strategically to maximize the value you get from your cards. You can do this by leveraging the three benefits I mentioned earlier: sign-up bonuses, transfer partners, and card-specific benefits.
Sign-Up Bonuses
The best way to quickly rack up a lot of points is by taking advantage of sign-up bonuses. When choosing a card you should pay close attention to what the sign-up bonus is and make sure you will be able to take advantage of it with your normal spending. By doing this you will earn yourself hundreds of dollars worth of points in addition to the normal points you earn for purchasing with the card.
If you don’t normally spend enough to meet the minimum requirement for the sign-up bonus, consider acquiring the card before making a large (but necessary) purchase that you don’t make on a regular basis. For example, I signed up for a new card shortly before buying a new mattress. I was going to buy the mattress anyways, so I didn’t spend more money that I would have without the new card, but by purchasing the mattress with the new card I was able to easily reach the limit to receive my sign-up bonus. I then used the points from the bonus to book a weekend in New York City for my first wedding anniversary!
Another way to maximize what you earn from sign-up bonuses is to regularly get new travel credit cards. You can only earn the sign-up bonus once, which means that once you’ve earned it the amount of money you can save with the card goes down dramatically. Typically, you can’t earn the bonus again unless you get rid of the card for 2 years.
Instead of just sticking with a card that isn’t getting you a bonus, you should periodically switch things up and get new cards to keep racking up those bonuses. Some people may be apprehensive about adding a lot of cards, but you don’t need to be. While new credit inquiries do ding your credit score by a couple points in the short term, in the long term having more lines of good credit can actually help your score. Overall, the short term drawback of a few points off your credit score is overshadowed by the savings from the new card as well as the positive credit established by having multiple cards that don’t carry a balance.
Since some cards have annual fees, you should evaluate whether or not the card is worth the annual fee without the sign-up bonus based on your own personal spending. If you’re not getting enough out of the card, you should cancel it. Then in a couple years you can apply for it again and get another sign-up bonus! If you have a no-fee credit card there’s no harm in keeping it even if you don’t use it, and having older lines of credit can actually help your credit score.
Transfer Partners
Another key aspect of maximizing your travel credit card is taking advantage of its airline and hotel transfer partners. By doing so you can land yourself “free” flights and stays using only your credit card points.
Maximizing these rewards starts when you’re choosing a card. Different cards have different reward partners and it’s important that you pick a card with partners you think you will use. For example, there are airline-specific cards from brands such as United and Delta. If you love one of those airlines then that could be a good option for you, but if you don’t they could be a waste of time. You should also consider what alliances reward partners are a part of. For example, if your card has a partnership with United, you can have access to flights on all Star Alliance partners, which gives you a lot more options than an airline that doesn’t have those connections. Regardless, the bottom line here is to make sure the card you choose has rewards partners that are attractive to you.
Once you have a card, something to keep an eye out for are bonus transfers. Sometimes specific transfer partners will have temporary bonuses that allow you to exchange 1 credit card point for multiple airline points. For example, over New Year’s, one of my cards ran a special deal with FlyingBlue (Air France & KLM membership program), where every credit card point moved over was worth 2 FlyingBlue points. This enabled me to book a one-way ticket to Europe for just 12,000 credit card points!
You should also pay attention to reward prices before booking flights. These prices aren’t available on search aggregators such as Google Flights and Skyscanner, so you’ll need to visit each airline’s website individually to check. Sometimes you can get flights for cheap with points even if the price is more expensive if you were paying in normal currency.
Card-Specific Benefits
There are a variety of card-specific benefits out there and it’s important to know what your card offers in order to get the most out of it. Some things may require you to be proactive in order to take advantage of them and others may require you to be aware of them in order to know when you can use them. Here I’ll cover a few common benefits, what they mean, and how to use them.
Auto Rental Collision Insurance
Many cards provide some form of auto rental insurance, which comes in handy if you need to rent a car. Many rental car providers require you to have some form of insurance in order to rent the car, which can cost extra money on top of the rental price. If your card has auto rental insurance as a perk, you can use that insurance without paying extra.
Lounge Access
Some travel credit cards provide you with access to airport lounges. This is a great perk if you ever need to spend a long time at an airport before, during, or after your travels. Typically, lounges are only accessible via a high fee or an exclusive membership with an airline. However, some cards are able to get you these memberships as part of the card, without spending any extra money.
No Foreign Transaction Fees
I’m honestly not sure if this counts as a benefit because, really, it should be the standard for travel credit cards. In that sense, I would not recommend getting a travel credit card if it doesn’t include this perk.
Many generic credit cards will charge you a fee every time you make a purchase from outside of the country. If you’re taking a foreign vacation, those fees can add up really quick. With your travel credit card, you should not expect to be paying these fees, which will help you save money on your travels.
Trip Cancellation Insurance
Another potential perk of your travel credit card is trip cancellation insurance. This is insurance that can help you get refunded if your trip is cancelled or cut short due to a variety of factors. Some eligible situations include sickness and severe weather. Be sure to check the details for your card to see how much you can get reimbursed for and what the conditions are to receive that reimbursement.
TSA Pre-Check and Global Entry
Some travel credit cards offer to reimburse you once a year when you apply for TSA Pre-Check or Global Entry. Typically they will only reimburse you once a year, so you can’t do both in the same year. This is a great benefit, however, because the cost to apply for these is sometimes about the same as the annual fee of the credit card, meaning that the card can pay for itself with this feature alone.
The mechanism for taking advantage of this is typically to apply and pay for Pre-Check or Global Entry online, and then request reimbursement through your mobile banking app.
What are TSA Pre-Check and Global Entry?
TSA Pre-Check – Pre-Check allows you to go through an expedited security line at the airport with fewer requirements during the screening. Some perks include not removing shoes or laptops, and typically getting through security in 10 minutes or less. Costs start at $78 and you can apply online.
Global-Entry – Global Entry allows you to go through customs more quickly upon returning to the United States. It costs $100 to apply and takes about 4-6 months to get approved; you can apply online.
Which Cards to Get
While there are tons of options and any card is better than no card at all, some travel credit cards stand out above the pack. My three favorites that are great for people new to the game are: Bilt, Chase Sapphire Preferred, and Capital One Venture. These are all cards that I have had in my wallet and can confidently say that they are excellent options. I’ll give you a brief head-to-head comparison of the three, then dive into the details of each card individually.
Comparison
| BILT | Chase Sapphire Preferred | Capital One Venture | |
|---|---|---|---|
| Annual Fee | None | $95 | $95 |
| Points on Rent? | Yes | No | No |
| Earning Points | 3x Dining 2x Travel 1x Everything else | 3x Dining, Online Groceries 2x Travel 1x Everything else | 2x Everything |
| No Foreign Transaction Fees? | Yes | Yes | Yes |
| Trip cancellation coverage | Up to $5,000 | Up to $20,000 | None |
| Trip delay coverage | Expenses | Up to $500/ticket | None |
| Lost Bag Coverage | None | Up to $100/day for 5 days | None |
| Auto Rental Collision Coverage? | Yes | Yes | Yes |
| New Cardmember Offer | None | 60,000 points (Requires $4,000 spend in first 3 months) | 75,000 miles (Requires $4,000 spent in first 3 months) |
1. BILT
This is a new card on the market and it is an absolute MUST HAVE for anyone paying rent. That’s because BILT is the only card out there that allows you to pay your rent with your credit card without any additional fees. Whether paying by bank transfer, check, or even Venmo, BILT has a way to integrate their card for paying rent, allowing you to earn points on what is likely your biggest expense every month. The only ding on it is that there’s not a huge sign-up bonus like the other cards, but the ability to earn points on rent makes up for that in my book.
Getting points from your rent is an absolute game changer in the credit card game and is made even better by the great perks and transfer partners offered by BILT. Every month you can play a game in their app that will enter you into a pool for a chance to get that month’s rent paid for by BILT. Additionally, there’s a monthly trivia game that gives you free BILT points for every question you answer correctly.
BILT also has one of the best collections of transfer partners out there. For airlines you can transfer your points to:
- Aer Lingus
- Air France/KLM
- Avianca
- Cathay Pacific
- Hawaiin
- United
- Air Canada
- American Airlines
- British Airways
- Emirates
- Turkish Airlines
- Virgin Atlantic
That is an elite lineup. It’s also great for hotels, having partnerships with IGH, Hyatt, and Marriott.
The perks don’t even stop there with BILT. They’ve also got partnerships with tons of restaurants allowing you to earn extra points when visiting them. If you ride with Lyft you can earn 5 points for every dollar spent on the ridesharing service. There are also occasional transfer bonuses. For example, in January 2024 I was able to do a 2:1 transfer with FlyingBlue, the loyalty program for Air France and KLM. This meant I was able to transfer 10,000 BILT points to gain 20,000 Flying Blue miles, which was enough for a 1-way ticket to Europe.
In addition to the point transfer benefits, BILT also has travel insurance benefits. The card offers up to $5,000 in reimbursement for non-refundable passenger fare when your trip is interrupted or cancelled. You can also get reimbursed for any expenses incurred when your trip is delayed for more than 6 hours. BILT also gives you auto rental collision damage coverage.
If there’s one card to get right now it’s the BILT Mastercard. There’s no annual fee, tons of travel partners, and best of all, a way to earn points on your rent. There is simply no comparison on the market.
2. Chase Sapphire Preferred
The Chase Sapphire Preferred is another top tier travel credit card. With this card you’ll earn a minimum of 1 point per dollar spent, but there are also lots of bonuses for different types of purchases. With this card you can earn:
- 3x points on dining
- 3x points on online grocery purchases
- 3x on select streaming services
- 2x on travel purchases
As you might expect, Chase has a great selection of airline transfer partners which includes:
- Aer Lingus
- Air France/KLM
- Emirates
- JetBlue
- Southwest
- Virgin Atlantic
- Air Canada
- British Airways
- Iberia
- Singapore Airlines
- United
In addition to the airline transfer partners, you can also transfer points for hotels through IHG, Marriott, and Hyatt.
Another great benefit you get with this card is travel insurance included with the card. For no extra fees you’re covered up to $10,000 per person and $20,000 per trip for cancellations caused by sickness, severe weather, and other covered situations. You also get auto rental collision damage coverage which means you don’t have to buy separate insurance when you rent a car. Chase will also reimburse up to $100 a day for 5 days if your bags are delayed and up to $500 per ticket if you flight is delayed by more than 12 hours or the delay requires an overnight stay.
If you sign up for this card right now you’re also eligible for their great sign up bonus! With this card you can earn 60,000 bonus points if you spend $4,000 on purchases within the first 3 months of having the card. That’s an estimated $750 in value just for signing up, I used my signup bonus to book a weekend in New York for my first wedding anniversary!
3. Capital One Venture
The Capital One Venture card was actually my very first travel credit card! It’s a really great option and one of the things I love about it is its simplicity. There’s no need to try and game the system to maximize your points with this card because you simply get 2 miles for every dollar spent on every purchase you make with this card. The one exception to this is the 5 miles per dollar you can earn if you book travel through Capital One’s travel portal.
Like the other cards we’ve discussed, Capital One has a solid selection of airline transfer partners which includes:
- Aeromexico
- Air France/KLM
- British Airways
- Emirates
- EVA Air
- Qantas
- TAP
- Virgin Atlantic
- Air Canada
- Avianca
- Cathay Pacific
- Etihad
- Finnair
- Singapore Airlines
- Turkish Airlines
Additionally, you can transfer points for hotels through Choice, Wyndham, and Accor Live Limitless.
Capital One also offers two more great travel benefits. One is reimbursement for either TSA Pre-check or Global Entry, once per year you can get reimbursed up to $100 when you sign up for one of these services. You also get 2 complimentary lounge visits per year at Capital One lounges. Unfortunately the lounge benefit is only available through the end of 2024.
The Venture Card also has some travel insurance benefits although they’re not quite as good as the Sapphire Benefits. This card has auto rental collision damage protection and travel accident coverage but does not have trip cancellation or baggage delay coverage.
This card also offers a great new cardmember offer when you sign up now. New cardholders can earn 75,000(!) miles when they spend $4,000 in the first three months with the Venture Card.
Other Cards to Consider
If none of these cards suit your fancy, don’t worry because there are plenty of other options out there. Here are a few worth checking out.
No Fee Cards
Capital One VentureOne – This is a no-fee travel credit card through Capital One where you can earn 1.25 miles per dollar spent. For applicants with “Excellent” credit there is a new member bonus of 20,000 miles when you spend $500 in the first 3 months.
Chase Freedom Unlimited – A no-fee credit card through Chase that offers 1.5% cash-back on every purchase. There are also several categories with extra rewards. Right now there is a new member bonus of an additional 1.5% cash-back for your first year, up to $20,000 spent.
Wells Fargo Autograph Card – Another card with no annual fee, this time from Wells Fargo. This card offers 1 point per dollar spent on all purchases and 3 points per dollar spent on restaurants, travel, gas station, streaming services, and some phone plans. The current new member offer is 20,000 bonus points when you spend $1,000 in the first 3 months.
High-End Cards
American Express Platinum – This travel credit card from American Express has a very high annual fee of $695, but that is coupled with excellent benefits. You can earn 5 points per dollar spent on purchases through American Express travel and 1 point per dollar on all other purchases. There are also tons of perks such as TSA Pre-Check reimbursement, $200/year for uber, and $240/year for streaming services, among others. The current new member reward is 80,000 points after spending $8,000 in the first 6 months.
American Express Gold – Another high-end option from American Express, this card has an annual fee of $250. With this card you earn 4 points per dollar at restaurants and US supermarkets, 3 points per dollar on flights booked through American Express and 1 point per dollar on all other purchases. They also offer a great selection of transfer partners. The current new cardmember offer is 60,000 points after spending $6,000 in the first 6 months.
Capital One Venture X – The higher end version of the Capital One Venture Card, this travel credit card has an annual fee of $395. Like the normal venture card you earn 2 points for every dollar spend, with additional rewards if booking with Capital One Travel. With this card you get a variety of benefits included access to 1,300 airport lounges worldwide, and 10,000 bonus miles every account anniversary. The current sign-on bonus is 75,000 miles when you spend at least $4,000 in the first 3 months.
Chase Sapphire Reserve – Finally, we have the premium travel credit card from Chase, with an annual fee of $550. This card gives you a base of 1 point per dollar spent, with additional rewards for travel and dining booked through Chase. You can redeem up to $300 a year for travel purchases and can be reimbursed for TSA PreCheck and Global Entry. The current new member bonus is 60,000 points after spending $4,000 in the first 3 months.
At this point I hope I’ve eased any concerns you had about getting started with a travel credit card. This is the best way to save yourself the money you need to travel more frequently. I know I wouldn’t have had the chance to travel as much if I didn’t take advantage of these cards.
If you want to know more about any of the options listed above, check out the bank website for the card or go to NerdWallet; they have detailed analysis of basically every credit card on the market.
Book Your Trip
Flights
Use Google Flights to search for specific dates, or set up destination alerts on Going
Accomodation
Book a hostel stay at Hostelworld
Search for hotels with Booking.com or Google Maps
For more info on searching for hotels on Google Maps, check out this post
Helpful Resources
Looking for more companies that can help you plan your trip? Check out my resource page for a list of all my favorite brands that I use when planning my own travels.
Disclosure: Note that some of the links in this article may be affiliate links. At no additional cost to you, these links allow me to earn a commission if you make a purchase. I will only recommend products and companies I actually use and the income I earn helps me to keep this site up and running.
