You might be scrupulously staying at home now but, with a little luck, in a few months’ time you will be able to take the adventure vacation you’ve been anticipating. The sanitation protocols we follow in the future when we board an airplane or check into a hotel will undoubtedly be stricter. But one thing won’t change. We’ll still be interested in saving on travel expenses once we’re back in the air and on the path to new, exciting destinations.
Using plastic to pay for travel is all but essential nowadays. Using a debit card is one payment option if you have the cash on hand to finance your vacation. If not, in addition to finding the lowest airfare and hotel rates, choosing the best travel credit card to pay for travel expenses should a top-of-mind financial consideration for you. The right credit card can save you money on both travel and everyday expenses, enhance your travel experience, and even deliver credit card combination deals that make the travel points you earn more rewarding.
So how do you determine which credit card is the most advantageous for you? Here’s a quick guide to what to look for when you compare offers.
APRs: Keep an eye on all of yours.
We’re all accustomed to shopping for the best deal on everything, from mortgage interest rates to potatoes by the pound. And travel credit cards are no different. But the interest rate you’re likely to pay on travel credit card balances is often much higher than the rates associated with the general-purpose credit cards we use for daily purchases. Some travel credit card rates exceed 25% APR. It’s a smart move to choose to use a travel credit card to make your initial travel purchase in order to reap the many rewards the card may offer. But the rewards you get may hardly seem worth the price if you maintain a high balance on your card. The best strategy for using a travel credit card is to make large purchases only when you can afford to pay off your balance immediately. If you can’t, a low-interest card that you already have in your wallet or one that offers you a 0% introductory rate might be a better choice for paying for your vacation. You may also be able to save on interest charges by transferring an existing travel credit card balance when you apply for a new general-purpose credit card.
Make sure the rewards you get are the rewards you want.
Travel credit cards offer a dizzying array of rewards. The complicated point systems and reward structures offered by many companies may be difficult to understand. And that may prevent you getting everything you have coming to you under your card agreement. Your first step when comparing travel credit cards should be to understand what you get rewarded for. Some cards reward you exclusively for air travel and hotel expenses—and sometimes restrict you to a single airline or hotel chain. Those cards amount to glorified frequent flyer programs. If you travel a great deal, you may have more miles already than you know what to do with. A better option is to find a card that rewards you for every dollar you spend and lets you take those rewards as cash back, not just as services.
Get a bonus from the get-go.
Travel credit cards want to earn your business and compete with one another by offering some compelling introductory offers. Look for the card that offers you the best sign-on bonus. But read the fine print. Sometimes those bonuses are only awarded when you meet steep minimum purchase amounts over a short period of time. Unless you are sure you will meet those minimums, don’t let a bright and shiny bonus offer blind you in your decision-making.
Get an objective opinion.
Many travel credit card companies promise great customer service, including the offer of emergency travel assistance. That can be reassuring, particularly when the destinations you visit are off-the-beaten-path. But before choosing a card, do some research into whether the company actually delivers on what it promises. Find a company that gets high customer service marks from JD Powers or a similarly professional, objective reviewer.
Annual fees can cut both ways.
With many all-purpose credit cards advertising low- or no-annual-fee offers, why would you consider a card that comes with an annual fee of a few hundred dollars? Because sometimes the card’s benefits make its high annual fee worthwhile. Some cards offer immediate credits toward travel while others give you an allowance to spend towards gaining Global Entry or TSA pre-check status. Others reimburse you $100 or more for airline add-on purchases like luggage fees and in-flight services. Before dismissing a card due to its high annual fee, consider what you might gain down the road by paying a little more upfront.
Sometimes it’s the perks.
If you travel frequently—particularly for business—the time you spend in airports can be lengthy, uncomfortable, and unproductive. Miles and discounts may not excite you, but a quiet place to have a cocktail or a short snooze might be just the ticket for you. Some travel credit cards offer membership privileges in private airport clubs and hotel upgrades, for example. All other things being equal, find a card that offers the kind of perks that make every trip you take more pleasurable.