Do you like to travel as much as possible, or are you hoping to travel more in the future? If so, you may be considering adding a travel rewards credit card to your wallet. You could earn rewards when you use your card to make travel purchases and can redeem them for more travel.
For many travelers, this strategy can help save money on travel costs. But is this the ideal rewards credit card for you? Let’s find out. Here are some questions to ask yourself.
What are my typical spending habits?
Before applying for a new card, it’s wise to consider your spending habits. What purchases are you making with your credit cards? Some cards earn flat-rate rewards, meaning every purchase earns rewards the same way. While this can simplify things, you may earn at a meager rate.
Other cards provide bonus rewards opportunities. If you make purchases in select spending categories, you may earn rewards at a higher bonus rate. Meanwhile, purchases outside of those categories earn at a lower rate. This is a common approach for many travel cards.
For example, you might earn 3 points per $1 on restaurant and travel purchases, but only 1 point per $1 on other purchases outside of these purchase categories. You want a rewards card that matches your typical spending patterns to maximize the rewards you earn.
How do I want to use my rewards?
When deciding whether a travel rewards credit card is right for you, it’s also a good idea to determine how you plan to use your rewards. Having a plan before you get a new card is the best strategy because it can help you choose the right card for your goals.
Many people redeem their rewards for travel purchases to save money on vacation costs. But it’s not unusual for travel credit cards to provide multiple redemption choices.
Some travel cards let cardholders use their rewards to book travel through an online travel portal. Others allow rewards to be transferred to select travel partners — allowing cardholders to book flights and hotels with their favorite travel brands. Another option may be to redeem rewards for a statement credit to your account, which could help “erase” travel purchases you’ve made with your card.
Keep in mind that redemption options vary from card to card — and redemption values can vary. Make sure you choose a credit card that allows you to redeem your rewards the way you want.
Are there any benefits included?
In addition to earning rewards, some travel rewards cards include useful benefits. These may include trip cancellation and trip interruption insurance, baggage delay coverage, or airport lounge access.
Research the benefits provided for each card you’re considering and decide whether you’ll get use from the perks provided. Just because a card is feature-packed doesn’t mean it will be valuable to you.
What are the fees associated with the card?
Finally, don’t forget to review all the fees associated with the card you’re considering. While some travel rewards credit cards have no annual fees, others have yearly fees. If you’re looking for a card that is feature-packed and has generous rewards, it will likely have an annual fee.
You should also research other costs like foreign transaction fees, late payment fees, and interest rates. Even if a card has fees like this, you can take steps to avoid them.
Using credit cards with no foreign transaction fees when traveling abroad is wise. Paying your entire statement balance is a good strategy to avoid paying interest charges. Do your research so you’re not caught off guard by extra fees.
Keep your finances top of mind
When deciding whether to apply for a new credit card, consider your finances. Your credit card usage habits impact your credit and credit score. You need to make sure you’re making a decision that will positively impact your finances.
If you’re confident you’ll charge only what you can afford, can benefit from the perks provided, and want to earn rewards, a travel credit card may be an ideal card option for you to explore. Review our list of the best travel rewards credit cards to learn more.