Travel reward credit cards are awesome. Play your cards right, and you can save thousands of dollars in travel expenses simply by paying for your everyday purchases (and travel costs) with plastic. Savvy cardholders also score valuable perks, such as free passes to airport lounges, free checked baggage, hotel upgrades, and priority boarding, at no extra cost.
Travel Rewards Credit Card Strategy
You need a game plan to make the most of your travel rewards. Travel reward cards are a moving target. Signup bonuses expire. Annual fee waivers are reinstated, and rewards rates can change. It pays to keep up with developments and make sure you are maximizing your travel rewards. Don’t worry it’s not rocket science and I have already done all the heavy lifting for you. In the last 12 months, I have used every card in this list except the Citi Prestige Card. Citi Prestige is a great card but its luxury perks don’t match my frugal traveling style and I suck at golf.
When planning your deck of travel rewards credit cards:
- Choose cards that compliment each other. For instance, if you have a card that provides high reward rates on dining and travel, combine it with another card that has high rates on gas and groceries, or even better, on all purchases.
- Have one (maybe two) credit cards you stick with. Choose cards that offer 2x points (or higher) on all purchases, have flexible rewards programs and include generous travel benefits. The rest of the cards you can churn through and cancel before it’s time to pay the second annual fee. Notice three out of the five cards on this list waive the annual fee for the first year.
Consider these guidelines when using your travel credit cards
- Never spend money just to meet a signup bonus threshold. The moment you spend more just to get points you start working for your credit cards instead of having them work for you.
- Whenever possible, apply for two or three credit cards at the same time. For instance, if you know you are going to make some large purchases within a short period of time. Make it count and spread it over two or more cards. Every time you apply for a new credit card, you receive a credit pull, which will reduce your credit score a little (5 to 10 points). However, credit score algorithms often count credit pulls performed withing a short period of time as a single pull. The idea is to allow consumers to shop around for the best rates without worrying about their credit score.
If your household spends $1,000 to $1,400 a month on expenses that can be paid with a credit card, you can realistically work through 4 travel cards within a year. For most families this is not difficult. The average U.S. household spends $500 a month on food, $303 on health care, $250 on gas, $215 on entertainment, and $76 on car insurance: a total of $1,344. And that doesn’t include many other expenses you can charge to your card, such as utilities. If you use four of the cards in this list you can earn over $2,000+ just in signup bonuses. A great start toward your next vacation stash.
Before I jump into our Top 5 Travel Card list, there are some things you need to understand about my methodology when choosing these cards.
- These credit cards are only for consumers with excellent credit. If your current credit score is not above 720, you need to work on improving it before applying for these bad boys. These articles provide some great tips on how to boost your credit score.
- Travel rewards credit cards only make sense for people who pay off their balance every month. If you carry a balance on these cards, you will negate any benefits or savings they have to offer. Cardholders with credit card debt should go for the credit cards with the lowest APRs, preferably cards with a long 0% APR introductory offer, such as Citi Simplicity, Chase Slate or Discover it. Read “The 3 Best Credit Cards For People Who Carry A Balance” for more details on the best balance transfer credit cards available.
- Notice I have only included pure travel cards, not airline or hotel loyalty cards. If airline credit cards are what you’re looking for, consider United MileagePlus, Chase Southwest Rapids Rewards Premier Card, and Citi Platinum Select AAdvantage. If hotel credit cards are your thing, consider the Hilton HHonors Surpass Card or the Starwood Preferred Guest Credit (both from American Express).
Top 5 Travel Cards 2016
Without further ado, here are the best travel cards of 2016. See below for more details on each card and an explanation of why they made the cut.
Annual Fee: $95 (Waived the first year)
No foreign transaction fees
Signup Bonus: 50k Ultimate Reward points ($625 in travel purchases) after you spend $4,000 in the first 3 months and 5k for adding the first authorized user.
Points: Cardholders earn 2x points on travel and dining and 1 point for every dollar spent on other purchases. Points are worth $0.012 when redeemed for travel purchases through Chase Ultimate Rewards. To illustrate, 55,000 points will give you $660 if you redeem them for travel purchases. Points can also be transferred to Chase’s travel programs, such as British Airways Executive Club, Korean Air SKYPASS, Singapore Airlines KrisFlyer, Southwest Airlines Rapid Rewards, Unite MileagePlus, Virgin Atlantic Flying Club, Hyatt Gold Passport, IHG Rewards Club, Marriot Rewards, and The Ritz-Carlton Rewards.
- A classy metal card design
- Premium travel protection benefits, such as trip cancellation insurance, auto rental collision damage waiver
- Trip delay reimbursement.
Why Did It Make It to the Top 5 Travel Cards? Chase’s Sapphire Card made it to the top 5 for its killer signup bonus, flexible rewards program, 0% foreign transaction fees, travel perks, and 2x points on dining and travel.
How to Use It: Add an authorized user (you don’t have to actually give him the card) and put everything on this card until you meet the $4,000 threshold in the first 3 months. Once you receive the signup bonus use it to pay for dining and travel expenses as a compliment to the Capital One Venture card.
Annual Fee: $59 (Waived the first year)
No foreign transaction fees
Signup Bonus: 40,000 bonus miles ($400 in travel statement credit) after you spend $3,000 within the first three months. Venture (as with Barclaycard Arrival Plus) allows you to make travel purchases with any company or website you choose. Once you make a travel purchase, just redeem your miles as a statement credit toward the cost. I love this feature because it allows you to use discount travel websites and doesn’t tie you to an airline or hotel chain.
Points: Venture cardholders earn 2x points on all purchases. Simple. No games. In effect, you are getting a 2% cash back on all purchases, which you can put toward your travel expenses.
- Complimentary upgrades and special savings at hotels and resorts
- Complimentary 24-hour concierge service, special access to sporting events and concerts
- Extended warranty on purchases
- 24-hour travel assistance services
Why Did It Make It to the Top 5 Travel Cards? Where do I start? Although it has a low annual fee, it has a generous signup bonus, 2x miles on all purchases, and the most flexible rewards program around. It also manages to include prime travel and shopping benefits, and a 24-hour concierge service.
How to Use It? Get the signup bonus and then use it as your everyday credit card. With a $59 annual fee and prime travel (and shopping) benefits, this is a card you are going to want to keep.
Annual Fee: $89
No foreign transaction fees
Signup Bonus: 40,000 bonus miles (equivalent of $400 in travel statement credit) when you spend $3,000 on purchases within three months. The best thing about the Barclaycard Arrival+ is you can use your “miles” to pay for any travel purchases made with your card. This allows you to find the best deal without being limited by the hotels, airlines, or rental cars used by a specific rewards program.
Points: 2x miles on all purchases. Cardholders earn 2 miles for every dollar spent. Period. As a bonus, cardholders receive 5% of the miles they redeem. For example, if you redeem 30,000 miles ($300), you receive 1,500 miles back ($15).
- 0% introductory APR
- 24/7 concierge service
- Travel accident and trip cancellation insurance
- Baggage delay insurance
- Complimentary FICO credit score access
Why Did It Make It to the Top 5 Travel Cards? The Barclaycard Arrival+ combines a generous signup bonus with 2x points on all purchases and the ability to use miles as a statement credit for all travel purchases. This gives you complete freedom to shop around for the best deals, including discount airlines, hotels and B&Bs that are not part of a chain, and low cost rental companies.
How To Use It? Make sure you get the signup bonus by spending $3,000 within the first three months. The Barclaycard Arrival+ has generous travel insurance (baggage delay, trip cancellation, and travel accident) so try to use it to book your flights. If you have a Capital One Venture card, and you can’t justify two annual fees a year, consider keeping it and cancel the Arrival+ before you trigger the second year’s annual fee. Remember you can usually re-apply (with sign-up bonus benefits) for prime travel cards every 24 months. You can cut that to 12 months if you have a traveling buddy you can partner up with and take turns being the primary user and additional authorized user.
Annual fee: $450 and an additional $50 (a year) for every authorized user.
No foreign transaction fees.
Signup Bonus: 50,000 bonus ThankYou Points when you spend $3,000 in purchases within the first three months. The 50,000 ThankYou Points can be worth up to $800 when used toward a flight on American Airlines or $665 when used with any other airline. Cardholders can also redeem for gift cards with many popular merchants for a 1:1 point to cent value.
Points: Cardholders earn 3x for every dollar spent on air travel and hotels, and 2x on dining and entertainment. All other purchases earn 1 point per dollar spent. Citi Prestige cardholders can transfer their points to major airline and hotel loyalty programs and use them to pay for purchases on Amazon.com. They can also redeem points for gift cards or travel and merchandise purchases through the ThankYou rewards program.
- Annual $250 Air Travel Credit you can use on airline tickets, baggage fees or upgrades
- A free 4th night at any hotel you choose when you book it through your complimentary Citi Prestige Concierge. There is no limit to the number of times you can use this benefit
- Free access to American Airlines Admirals Club lounges and hundreds of Priority Pass Select VIP lounges
- Complimentary green fees at over 2,400 golf courses around the world. Cardholders who also have a Citigold checking account receive up to 25% more in points for their purchases
- Worldwide car rental insurance
- Medical evacuation
- Trip cancellation, delay, and interruption protection. Baggage loss and delay protection
- Roadside assistance, travel accident and emergency assistance
- Damage and theft purchase protection
- Citi Price Rewind
- Extended warranty on purchases and 90-day return protection
- Missed event ticket protection.
Why Did It Make It to the Top 5 Travel Cards? It has a 50k signup bonus, a $250 annual airline travel credit, luxury perks, generous travel and purchase benefits, and a rewards program that allows you to redeem ThankYou points for up to 1.6 cents for every point.
How to Use It? This card only makes sense for high-end consumers who enjoy traveling in style and who travel by air on a regular basis. The luxury perks alone (such as the 4th free hotel night, airport lounges, and complimentary golf club green fees) will quickly pay for the $450 annual fee if you travel often and hit the golf course a few times a year. Take advantage of the Citi Prestige Card’s high-end insurance benefits and 3x points by using it to purchase all your flights and hotels.
Annual fee: $95 (The fee is NOT waived the first year)
No foreign transaction fees
Signup Bonus: 60,000 bonus points (the equivalent of $750 in travel purchases) when you spend $5,000 within the first three months. The points can be redeemed through Chase’s award-winning Ultimate Rewards program.
Points: Cardholders earn 5x points on the first $50,000 spent on office supply stores, telephone, internet, cable, and internet expenses. 2x on the first $50,000 spent on gas and hotels (when purchased directly with the hotel), and 1 point for every dollar spent on other purchases. When you use your points to purchase travel on Chase Ultimate Rewards you enjoy a 20% discount on airfare, car rentals, and cruises.
- Trip cancellation and trip interruption insurance (up to $5,000 per trip)
- Purchase protection
- Extended warranty protection
- Return protection.
Why Did It Make It to the Top 5 Travel Cards? It has one of the highest signup bonuses available, 5x points on office supplies and telecommunications expenses, and prime travel and shopping benefits. The big caveat is the card is only available to business owners. However, you don´t have to own a big company to qualify. Even freelancers are eligible for a Chase Ink Plus Business Card.
How To Use It? First, focus on getting the sign-up bonus. Then put all your office supplies and telephone/internet invoices on auto-pay. Just $1,900 a year in 5x purchases will cover the cost of the annual fee. If your other main card is the Chase Sapphire Card, use Ink to pay for gas to maximize the points you can use on Chase’s Ultimate Rewards Program.
For more information on the best credit cards available check these articles:
SuperMoney’s credit card search engine is a useful tool to filter through the hundreds of credit cards available and find the one that best fits your priorities and preferences. Yes, it’s free.