If you love to get away, a travel rewards card can be your best friend. The right card can land you free flights, hotels, and more that add up to thousands in savings. All you have to do is know which travel card to use and how to rack up the points. We break down below what makes up the best travel cards, what to avoid and how you should choose one. Plus, we’ve got our picks for the top travel rewards cards of 2019.
What to look for in a travel card
The travel card market is filled with large sign-up bonuses, enticing reward structures and perks that can put your next trip over the top. So, how do you choose the right one for you?
- Make sure the sign-up bonus is attainable.
You can easily negate a sign-up bonus by outspending your income and getting charged interest as you pay the card off.
- Figure out what the annual fee is after the first year.
If your spending habits net you $200 in travel rewards each year, don’t get a card with a $200 annual fee.
- Make sure the rewards fit your lifestyle.
If you love to dine out, find a card that gives you extra points when you do, like the Chase Sapphire Reserve Card.
- Understand how you will use the rewards.
If you are loyal to certain airlines and hotel chains, consider a travel card from those brands. If you’re a traveler who doesn’t care about the brand as much, consider a general travel rewards card that gives you more places to redeem your points. The Capital One Venture Rewards Card lets you redeem your travel purchases as a statement refund, while the Citi Prestige Card lets you book on any airline through the Citi ThankYou Travel Center.
- The points should be easy to redeem.
According to AICPA, just 15 percent of all Americans have used points to pay for their trip. Meanwhile, 14 percent have gone into debt for a trip. Make your credit card work for you, not the other way around.
How to choose a card
According to the Bureau of Labor Statistics, the average American family spends (per month):
- $330.91 on groceries
- $232.25 eating out
- $205.67 on gas
- $227.33 on entertainment
Let’s say you spend $1000 per month and average 2 points per dollar spent. You’ll rack up 2,000 points per month or 24,000 points in a year. Pair that with the 50,000-point sign-up bonus of the Barclaycard Arrival Plus World Elite Mastercard, and you and a friend will be ziplining through the rainforests of Costa Rica by this summer.
Look back at 3-4 months of credit card statements and get an idea of how you’re spending your money.
- Add up what you typically spend (and pay off) on credit cards in a month.
This will help you determine what travel sign-up bonuses work best for you. Many require reaching a certain spending threshold within the first few months to get the bonus.
- Where do you spend your money?
Some of the best travel rewards cards give bonus points for categories like dining or entertainment. The Chase Sapphire Reserve offers triple points for dining out and entertainment, for those who like to go out on the town.
- Is there someone else in your household who could also be a cardholder?
Several credit card companies offer bonus points for adding extra cardholders. Plus, you’ll have someone else to boost you toward that sign-up bonus.
- What can you expect to spend on credit cards in a year?
This helps estimate your annual rewards. If a card’s annual fee is higher than your expected annual rewards, you’ll be losing money even if you pay off your bill on time.
According to Experian, the average balance for credit cards typically paid in full each month is just over $1,000. For our list, we’ll be looking at small spenders ($500 or less per month), moderate spenders (around $1000 per month) and big spenders ($2000 or more per month). Knowing your average monthly expenditures will help make sure you get the great sign-up bonuses. It will also help you earn more rewards than you might be paying in annual fees.
As a general rule, one point is equal to $0.01 in rewards. For some cards, consumers can get more value out of their points. We’ve noted those exceptions below.
Best For Small Spenders
Sign-up Bonus: 20,000 points after $1000 in first 90 days
Annual Fee: None
Points: 1.5 points/dollar on every purchase
Very few travel cards that offer no annual fee have such a great sign-up bonus, worth around $200 in travel expenses. Spending just $333 per month in the first three months is enough to net that bonus. What sets the BankAmericard Travel Rewards card apart is the 1.5 points on every single purchase, not just in specific categories. Plus, customers that have a Bank of America or Merrill Lynch account can earn anywhere from 10-75 percent more in points.
Sign-up Bonus: None (End of year rewards match)
Annual Fee: None
Points: 1.5 points/dollar on every purchase
The Discover IT Miles Card doesn’t have a sign-up bonus, but Discover will match all of your travel rewards at the end of the first year. At $500 spent per month, that adds up to 9,000 points. That’s nothing to sneeze at, especially with no annual fee. Plus, consumers earn points in every single category. The biggest downside of this card is that Discover isn’t as widely accepted as other card issuers.
Best For Moderate Spenders
Sign-up Bonus: 40,000 points after $3000 spent in 3 months
Points: 2 points per dollar on everything
Annual Fee: $59 (waived the first year)
The Capital One Venture Rewards Card is right in the sweet spot of affordability for the average travel spender. While there are a few cards that offer bigger sign-up bonuses, the Venture Rewards card gives you 2 points in every single category. Plus, many other cards with similar rewards structures have higher annual fees which can nullify larger sign-up bonuses.
Best For Big Spenders
Sign-up Bonus: 50,000 points after $4000 in first 3 months
Points: 3x on Dining and Entertainment
Annual Fee: $450
While the Chase Sapphire Reserve has a large annual fee, it also comes with a $300 annual travel credit. If you like to dine out, whether at home or on the road, the Chase Sapphire Reserve rewards you with triple points. Points are worth 50% more (1.5 cents per point) when redeemed through Chase Ultimate Rewards.
Sign-up Bonus: 40,000 after $4,000 in first 3 months
Points: 3 points/dollar on gas and travel, 2 points/dollar on dining and entertainment 1 point/dollar on everything else.
Annual Fee: $450
The Citi Prestige Card offers a great sign-up bonus and a $250 annual travel credit. Use the Citi Concierge and pay with your prestige travel card to get a free fourth hotel night. Heavy travelers will love complimentary Priority Pass access.
Best Airline Rewards Cards
Sign-up Bonus: 5,000 bonus points after $1000 spent in first 3 months
Points: 3 points/dollar on JetBlue purchases, 2 points/dollar at restaurants and grocery stores, 1 point/dollar on everything else
Annual Fee: $0
Most airline rewards cards will get you a free checked bag. You will also probably get priority boarding and extra points for airline purchases. However, the JetBlue card is one of the few to offer bonus points on restaurants and grocery stores. It is also one of the few without an annual fee.
Best Hotel Rewards Cards
Sign-up Bonus: 25,000 points after $3,000 in purchases in the first 3 months
Points: 2 points/dollar on Starwood purchases and 1 point/dollar spent everywhere else
Annual Fee: $95 (waived the first year)
The 25,000 point sign-up bonus may seem small, but Starwood points are worth between 3-4 cents per point. That’s 2-4x higher than most travel reward structures. What’s more, the points can be transferred to many airline rewards programs.
There are lots of great options for frequent travelers. Find a travel credit card with a sign-up bonus that you can attain and pay off. Going into debt for extra points will negate the perks of even the best card. Everyone spends differently, so choose a travel card that will maximize your points where you spend your money. Likewise, if you enjoy certain hotel chains or airlines, consider a travel card from those brands. You can see all of the great options and read reviews here.