How Do Travel Credit Cards Work?
Check out this guide to travel rewards credit cards and choosing one that’s right for you
If you’ve got travel in your future, good news. There’s a range of travel credit cards out there to help you earn rewards to use on things like airline tickets, nights at your favorite hotel and more.
But before you hit the open road, you may want to think about a couple of things. First, what’s your travel style? Second, what benefits and perks are you most interested in? With that in mind, let’s take a look at travel cards and how they work.
What Are the Types of Travel Credit Cards?
Let’s start with the basics. The most common types of travel cards are airline, hotel and general travel rewards credit cards. You can use them like you would any other credit card. And you can also earn rewards, usually in the form of points or miles.
Generally, you can earn rewards by making everyday purchases—think clothes, gas and electronics. Once they add up, you can redeem them for travel-related purchases. And some cards even offer additional ways to earn rewards.
One important thing to note is that airline, hotel and general travel cards may offer different rewards scenarios. For example, some may offer a flat rewards rate for all purchases. And others may offer an enhanced rate on travel-related purchases.
What’s the best travel rewards card for you? That depends on what you’re looking for. Each may have its own combination of benefits, special perks and rewards structure.
If you fly with the same airline most of the time, an airline travel card might be a good option for you.
With an airline card, you’ll earn rewards to use with your favorite airline. And since many large airlines have partnerships with other carriers, you may earn rewards with other brands too. Depending on the card, your miles could be redeemed for everything from plane tickets to perks like free checked bags and early boarding.
Like airline cards, hotel cards reward loyalty—in this case, to a specific hotel or chain.
With a hotel card, you may earn rewards to redeem for rooms. You may also get benefits just for cardholders, like complimentary breakfasts, room upgrades and concierge service.
General Travel Rewards Credit Cards
With a general travel rewards credit card, you’re likely not tied to a single travel provider. That can give you more choices. You can use your rewards on a range of airlines and hotels, for example. Or for other travel purchases like car rentals, vacation rentals and train tickets.
That flexibility may also mean you can book flights and hotel rooms when you want them, without blackout dates and other restrictions.
Want extras that help make travel more convenient? General travel rewards credit cards may give you those too. Some offer a statement credit toward TSA PreCheck or Global Entry, programs that can help you skip long lines at airport security or customs. Some cards may also offer zero foreign transaction fees to help you save money when you make purchases outside the United States.
Are Travel Cards Worth It?
Now you know a little more about travel credit cards. Great! The next question is, is it worth applying for one?
Here are some things to think about when you’re making that decision:
- What’s your travel style? How you like to travel can play a big part in your decision. If you fly on several airlines rather than one favorite, a general travel rewards credit card may make more sense than an airline card. Or if you prefer vacation rental houses to hotels, a general travel rewards credit card may be a better choice than a hotel card.
- How do you feel about annual fees? While some travel cards don’t charge an annual fee, some do. You might find it helpful to estimate the rewards you’ll earn in a year and weigh them against the annual fee.
- What’s your credit score? To get some travel cards, you may need to have a credit score that’s good or even excellent. Checking your credit score before you apply for a travel card could help save time. With CreditWise from Capital One, you can access your TransUnion® credit report and weekly VantageScore 3.0 credit score for free without hurting your score. And you don’t even have to be a Capital One customer to use it.
Ways to Maximize Your Travel Card Rewards
As with any credit card, it’s important to use a travel credit card responsibly. If you do, it can be a great tool in your financial toolkit.
Here are three ways to maximize a travel card’s benefits and rewards:
- Know how to earn your sign-up bonus. Understanding the details and timing of your sign-up bonus could keep you from missing a good opportunity. That’s because some travel cards may offer a bonus for spending a certain amount during a set period of time.
- Make the most of your card’s benefits. Being familiar with your card’s benefits could help you get the most out of them. Benefits may include everything from savings on rideshare services to exclusive access to airport lounges.
- Use your full range of redemption options. Your options for redeeming your points or miles may vary from card to card. Some may allow you to redeem points or miles for cash, for instance. Others may allow you to transfer your miles to hotel and airline loyalty programs. And some have even added new or limited-time redemption options for the COVID-19 era, like restaurant delivery, takeout and streaming services. Just keep in mind that, depending on the redemption option, the value of your points or miles may vary.
Pick the Best Travel Rewards Card for You
Which travel rewards card should you choose? That depends on what you’re looking for. Each has its own combination of benefits, special perks and rewards structure.
The more you learn about general travel rewards credit cards, airline cards and hotel cards, the better equipped you’ll be to make the best choice.
So keep learning. And happy traveling.
Government and private relief efforts vary by location and may have changed since this article was published. Consult a financial adviser or the relevant government agencies and private lenders for the most current information.
We hope you found this helpful. Our content is not intended to provide legal, investment or financial advice or to indicate that a particular Capital One product or service is available or right for you. For specific advice about your unique circumstances, consider talking with a qualified professional.
Your CreditWise score is calculated using the TransUnion® VantageScore® 3.0 model, which is one of many scoring models used by lenders. It likely won’t be the same model your lender uses, but it is an accurate measure of your credit health. The availability of the CreditWise tool depends on our ability to obtain your credit history from TransUnion. Alerts are based on changes to your TransUnion and Experian® credit reports and information we find on the dark web. The tool is not guaranteed to detect all identity theft.