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The best advice is advice you can activate. When it comes to the credit cards we have in our pockets, we tend to keep the same cards for years. The number of cards with travel rewards, cashback offers and other benefits can be confusing. 

This article is all about practical advice that helps get you ahead with bonus cash and travel rewards. I live in HCOL, and when everything costs more, you need to be smart. You can find plenty of lists of the top 10 credit cards for travel. We encourage you to use the analysis methods in this article to decide on the best credit card for you. 

The most crucial aspect of all rewards from credit cards is that you can only earn rewards if you pay on time, in full.

Finding the Best Credit Cards for you

Woman looking at credit card and booking airfare on her laptop

Everyone's needs and wants are different when it comes to deciding on a travel credit card. Before you dive into any new credit card, take these steps. 

Set your goal 

For many people traveling for free or a terrific deal is the prime incentive for getting a new credit card. With travel currently restricting opportunities to use travel rewards, you may now have a different goal with your rewards points. Many cards, such as Chase Sapphire cards, will offer traveling, shopping and cashback rewards; some cards are better for different goals.

Assess your travel patterns

Signing up for an airline-branded credit card may be perfect if you regularly fly a particular route with a specific airline. While airline points are generally transferable among partner airlines, it can be a multi-step process that can become frustrating. Consider your regular travel routes and airline preference before any account opening.

Assess spending

Making decisions based on data allows you to assess the best card, depending on where you spend your money and how much overall. Getting the most value from credit card rewards will depend on your goals, lifestyle and spending patterns. 

An excellent place to start is with your spending patterns. Your bank or preferred budget management or investment app will generally offer a breakdown of spending by month or year. The retrospective breakdown of each category can help you see what you have done in the past and consider what the year ahead looks like. Perhaps you have changed jobs and have a longer or shorter commute, or you're about to start paying school fees for your children.

Practical application of your assessments

Once you work out the percentages of where you have or plan to spend your money for the next 12 months, compare that against each credit card's offers. For example, Chase Freedom Unlimited offers 5% back on groceries. It is important to consider how you make your purchases. 

Pull your expenses from your existing credit card, and your forecast will be reasonably accurate. If you are using budgeted numbers, keep in mind that your ability or practice of paying with a credit card will impact your ability to gain rewards. For example, if you shop at a supermarket that only takes debit cards for food purchases.

It may help to use a spreadsheet - Excel or Google sheets if you are comparing multiple cards. Or you can do an estimate on a piece of paper too! Within each category, use the dollar amount you usually spend or are budgeting to pay and multiply by the percentage in rewards. For example, a $10,000 grocery budget per year x 5% would equal 500 points using the Chase Freedom example card. 

Add up all of the reward points that you could collect annually. Make a note of the annual fee as well. This will give you a reward 'value' and under which eligible purchases will apply to your spending habits.

Analyzing your specific numbers will allow you to discover which credit card will suit you best and give you the most benefits. Whether it be travel miles, cashback, airport lounge access or a flexible card that offers both.

Spreadsheet of budget

Below are the 7 best credit cards for travel. 

Related: The 8 Best Zero Interest Credit Cards

Best Credit Cards for Travel Miles

Travel may feel like a non-event right now; however, many cards have either no expiry dates on points or three years before points expire. Even better, Chase Sapphire cards offer both travel, cashback or shopping rewards. 

Chase Sapphire Preferred Card

Chase Sapphire Preferred Card

Chase Sapphire Preferred card is regularly rated as the number one travel rewards card. There is a $95 annual fee that can make this card feel like a 'pay to play' card. To get the best rewards, you need to pay the upfront fee.

Rewards on this card include: 

  • 80,000 point signing bonus - this equates to $1,000 in travel spend
  • Double the points on travel and dining - 2 points for every dollar spent
  • When you redeem your points for travel rewards, you will receive 25% more value - if you had 100,000 points, you could spend up to 125,000 points on hotels, car rental and flights
  • No foreign transaction fees
  • Overseas charges can vary - generally, there is a dollar cost, $2.50, and an exchange rate conversion.
  • Lyft Pink membership for free - membership gives you 15% off all rides plus other benefits
  • Auto rental collision damage waiver. If you charge your car rental fee to your card, you are covered for insurance theft and collision damage. In some countries, this can be around $25 per day of car rental
              


Chase Sapphire Reserve Card 

Chase Sapphire Reserve Card 
Nicole Glass Photography / Shutterstock.com

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A popular card among frequent travelers, CSR as it is referred to among credit card hackers, gives big rewards if you frequently travel for business or pleasure. The entry fee to get those rewards is high in cost and bonus. 

CSR has one of the highest annual fees of any card, at a hefty $550 annual fee, plus $75 additional card member fees. The reward is 50,000 points as a signing bonus, which converts to $750 in hotel, car rental or cruise reward points. Once you get past the high fee and signing bonus, there are many benefits to big travelers. 

Rewards on this card include: 

  • Earn $300 of travel expenses reimbursed
  • Collect 50% more in points when redeeming for travel. If you earn 100 points, you can redeem your points for $1.50 in travel credit
  • Almost free TSA pre-check or global entry fee (renewed every 5 years but reimbursed every 4 years)¬†
  • Free airport lounge entry - usually $99, and two guests can join you for free
  • Lyft Pink membership for free - Membership gives you 15% off all rides plus other benefits
  • Free GrubHub delivery and up to $150 in DoorDash credits
  • No foreign transaction fees
  • Auto rental collision damage waiver

Related: The 5 Best Credit Cards for People with Bad Credit

Alaska Airlines Credit Card

Alaska Airlines Credit Card

Alaska Airlines' frequent flyer membership card has always had generous benefits. Coupled with their branded credit card, you could be flying to Hawaii for free in no time at all. I've heard talk for years of friends saving their free Companion Fare coupons to have girls or guys weekends away for virtually no cost. 

Signing bonuses with the Alaska Airlines card currently include a first year annual fee waiver - $75 and 40,000 bonus miles, on top of your anniversary companion fare. 

Rewards on this card include: 

  • Buy one get one companion fare to the value of $121, with no need to worry about blackout dates
  • Free checked bag. This also extends to the people you are traveling with on your ticket. For example, if you are the cardholder, your family can also have free checked bags. Typically charged at $30, this could save $180 for the 'up to 6 people' limit.¬†
  • 50% off Alaska lounge membership, usually a $450 annual fee and includes complimentary food and drink, plus you can bring two guests.
  • Alaska Air has a wide range of partners, including American Airlines, British Airways, LATAM Airlines, and Qantas. Basically, you can travel the world on Alaska points
  • Beyond these perks, you will earn 1 mile for $1 of card spend.
  • Since 2016 there are no foreign transaction fees

 

Best Cashback Credit Cards

Cashback comes in a few different ways, and reading the fine print will determine which each card offers. The cards reviewed here give different types of cashback; Amex offer statement credits, Costco (and other store-branded cards also offer this) give cashback to spend in-store, and Chase cards offer both cash in your bank account or credit to spend on travel. 

What will you do with the cash that will make a difference to you?

Blue Cash Preferred Card 

Blue Cash Preferred Card 

This American Express card has an annual fee of $95 and is waived the first year as a signing bonus. This card is attractive because it offers cashback on cell phone and streaming services. Cell phone providers include the major four; AT&T, Sprint, T-Mobile, and Verizon. Streaming services include Apple Music and TV, Spotify, YouTube Premium, HBO, Hulu, Stitcher, Kindle Unlimited and even more big name streaming subscriptions. Even Netflix and Prime Video are included in the 6% cashback offer. 

If you've recently cut the cable cord, this may be an excellent card for you. Another unusual merchant included in their additional rewards program is Trader Joes! 

Downside - note that the cashback is a statement credit, not actual cash. Instead of paying your bill, you can then use your own cash elsewhere. This could be a sound card if you are a family and are looking for an uncomplicated good deal.

Rewards on this card include: 

  • 6% cashback at supermarkets for up to $6,000 and then 1%
  • 6% on streaming services
  • 3% on transport - gas, rideshares, parking, tolls, trains, buses, and more
  • 1% on other purchase

Related: 9 Best Passport Holders for International Travel

Costco Citi Card 

Costco Citi Card 

If you spend a lot of time and money at Costco, this may be the right choice for you. Not only can you collect points on an Executive cashback membership, but you can also double-dip and get points on your Citi card too. 

When you factor in a 2% cashback reward (less annual fee of $120) and 2% from your credit card, you can cover the cost of your card and receive $120 back just by spending $6,000 per year on groceries. Plus, you earn 4% on gas - and we all know buying gas at Costco is already a great deal. 

Rewards on this card include: 

  • 4% cashback on all gas purchases
  • 3%¬† on restaurants and travel
  • 2% on Costco purchases
  • 1% on all other purchases
  • Zero foreign transaction fee

Best Travel Credit Card with No Annual Fee

Travel rewards have become a pay to play game. You pay an annual fee and then can earn rewards. The more you charge to your card, the more you travel for free. It can be challenging to resist the urge to overspend on your credit card to chase reward points. Sign-on bonuses can be a great way to take advantage of a fee waiver and bonus travel reward points. However, it is a good idea to reassess each year if that annual fee is worthwhile. 

Be aware of what the annual fee gets you. The Chase Sapphire Reserve credit card has a yearly fee of $550, equivalent to spending $55,000 on a card with a 1% reward point per dollar spent. If you spend $55,000 with a zero annual fee card, you just might save money and not feel the need to continually chase points to make the credit card worthwhile.

Chase Freedom Flex 

Chase Freedom Flex 

This is a new card brought out by Chase and operates as both a travel reward and cashback card - you get to choose. If you aren't a big spender - most cards have minimum purchase levels in the first three months to earn the bonus points, this may be an option. The current signing bonus is $200 if you can spend $500 on purchases in the first three months. 

Each quarter there are bonus categories where you can earn a higher percentage of rewards. This quarter you can earn a 5% reward on Walmart and Paypal purchases. This seems like an easy, no fuss card that gives you rewards for everyday spending. Being tied into the Chase rewards system, you can spend your 'cashback' on travel, shopping or opt for cashback. You use the same platform that all of Chase's reward cards do. The difference is in the points earning capacity. Note that this card does have a 3% foreign transaction fee, so perhaps have a different card for traveling. 

Rewards on this card include:

  • 5% on travel purchase through Chase Ultimate Rewards - the same platform that Chase‚Äôs other credit cards use to book travel
  • 4% on Lyft rides
  • 3% on dining, including take out which is perfect for the times we are in
  • 3% on drugstore purchases
  • 1% on all other purchases
              

Capital One¬ģ Venture

Capital One¬ģ Venture

The Capital One Venture card has been around for years and is used by many travelers who are not particular about a specific airline. You can earn up to 100,000 bonus miles with an account opening as a welcome bonus. 

Any card issuer can redeem their points to book a vacation, cover other travel purchases, redeem for straight cash or get a gift card to one of their popular merchants. Your rewards never expire, so if you are planning a trip two years from now, you can cash them in for whatever calendar year you choose. The travel perks on this card are endless since it doesn't matter what gas station, hotel stay or airline you use. 

Rewards on this card include: 

  • 2 miles earn for every dollar spent¬†
  • $100 credit on TSA PreCheck or Global Entry
  • Rewards available to use on Amazon¬†
  • Redeemable rewards on ANY travel purchase (gas, restaurants, hotels, etc.)¬†
  • Flexible mileage transfer for airfare on multiple airlines¬†
  • Zero foreign transaction fees¬†

Paying your Credit Card Bill

Using your credit card is a buyer beware scenario. Always maintain a healthy fear of carrying a balance on your credit card because the interest rates are high - 14 - 24% in most cases. The penalty of not paying on time for rewards cards means that you don’t actually earn rewards. Rewards points are only given to those who pay the full balance each month. 

Double up on the reward of earning points by using your credit card to really boost your credit score. We go into more detail on raising credit scores here.

One trick to use a credit card to raise your credit score is to make payments twice a month (split the full amount into two) before the due date. On your credit report, these payments register as two on-time payments rather than a single bill payment.

Whether you opt for a Visa, Mastercard, Discover, AMEX or an airline credit card like United, American Airlines, Delta, etc. it is always important to understand what the credit card offers. Redemption options, travel benefits and annual fees vary from card to card. Some offer reimbursements for places like grocery stores, hotel chains and gas stations, while others allow you lounge access and priority passes and priority boarding on specific airlines. Figure out what membership rewards are the most important to you, how often you plan to travel and identify your spending habits before selecting any travel credit card. 

Most people sign up for a rewards type credit card, likely enticed by sign-up bonuses, and don't revisit the benefits and costs of having that particular card, like a high annual fee. As your lifestyle changes, try to reassess before you pay the annual fee each year and get the right card for your buying habits in the future.

You might also be interested in: The Definitive Guide to TSA Pre-Check

The 7 Best Travel Rewards Credit Cards:

  1. Chase Sapphire Preferred Card
  2. Chase Sapphire Reserve Card 
  3. Alaska Airlines Credit Card
  4. Blue Cash Preferred Card 
  5. Costco Citi Card 
  6. Chase Freedom Flex 
  7. Capital One¬ģ Venture
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Posted 
Oct 29, 2020
 in 
Money
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