Last Updated on 14/05/2022 by Edy Ragnoli
How to get free flights, hotel rooms, vacation, cash, discount, and perks when you travel and pay for your everyday needs with a travel reward credit card.
We all love to travel and always will. But travelling can be expensive unless you know some tricks and how to get something back every time you spend money. Welcome to the wonderful world of travel rewards credit cards. You’ll discover the best ones in 2021, how they work, their benefits and how to choose the right ones.
Would you like to travel more and save money? Go through this guide and list of the best travel credit cards. You'll find the one for your needs.
Quick Overview: The Best Travel Rewards Credit Cards of 2021
- Chase Sapphire Preferred® Card: Best starter travel credit card
- American Express® Gold Card: Best for worldwide dining
- United℠ Explorer® Card: Best airline rewards cards
- Chase Sapphire Reserve®: Best Premium travel rewards card
- Marriott Bonvoy Boundless Credit Card: Best mid-tier hotel card
- The Platinum Card® from American Express: Best for lounge access
- Ink Business Preferred® Credit Card: Best for small business travel rewards
- Discover it® Miles Card: Best for no annual fee
- Capital One® Venture® Rewards Credit Card: Best for earning miles at a flat rate
- Chase Freedom Flex℠ Card: Best for Cash back for travel bookings
How Travel Rewards Credit Cards Work
Travel rewards credit cards pay you back with a welcome offer, points or miles, bonuses, cashback, and discounts every time you use them for your purchase. The more you spend, the more you earn. Some cards also reward you with more points for certain purchases. Why do they do that? To gain and retain customers. So card issuers partner with travel companies to offer a variety of perks.
What can you do with the points and miles you earn? You can redeem them to get free flights, hotel rooms, vacation and more. But you have to distinguish between general-purpose travel rewards credit cards and branded airline/hotel-specific credit cards. We’ll see them in more details later.
What’s the best card depends on your specific needs and travel habits. For a sneak peek of the overall value of every card I examined, here’s a quick overview of the airline miles and hotel points they give.
AIRLINE MILE VALUES
HOTEL POINT VALUES
|Best Western||0.7 cent|
How To Choose a Travel Credit Card
I must tell you: there’s no perfect card. Everything depends on how you travel and what’s more important for you. Every travel credit card offers its advantages. That’s why I prefer to use many of them, depending on the situation. To discover which one is best, you must learn how to evaluate them and know the benefits they offer.
General-purpose travel credit cards reward you with points (or miles) you can use to pay for travel with several airlines or hotels. They have their own flexible reward programmes and you can transfer the points to multiple travel companies. Therefore, they are the best choice if you love (or need) to change them continuously.
Conversely, branded airline or hotel cards give you points you can use just with them (some cards allow you to transfer hotel points to airlines, but you get a poor value). So if you are a loyal traveller and like sticking with a specific company, regardless of the reason, this is the best choice for you.
Evaluating general travel credit cards
This kind of cards is issued by a bank and you earn 1 to 2 points per dollar spent on every purchase (even more in some categories). As a new customer, you usually benefit from big sign-up bonuses that converts in thousands of miles you earn by spending a given amount of money within a certain period.
These cards offer several perks and ways to redeem the points. So choose the card that offers the best combination for you.
Statement credit: you pay the travel (hotel, agency, etc.) with your card and then apply the credit to eliminate the costs.
Travel booking: you use your points as money to pay for your travel through the card issuer's website.
Point transfer: you can transfer your points to other loyalty programmes of partner airlines or hotels.
Cashback, merchandise or gift card: you can use the points to receive these rewards instead of travel.
Travel credit: you get reimbursed for travel-related expenses.
Airport lounge access: you can stay at special lounges you wouldn't otherwise have access to.
Trusted traveller reimbursement: they cover the application fee for TSA PreCheck™ and Global Entry programmes (you move through airport security and custom faster and free of charge).
Evaluating airline credit cards
Co-branded airline credit cards reward you with 1 or 2 points for each dollar spent with the same airline. You can buy a flight ticket or even spend them in other categories such as car rental or restaurants. They give you also welcome bonuses but the main benefits are the perks included.
Priority boarding: you get on board after the airline's elite-status frequent flyers, but before the general passengers.
Free checked bags: you often have the first bag free for you and one companion. Some cards may include up to two bags apiece.
In-flight discounts: you get discounted food and drinks plus free Wi-Fi.
Discounted ticket for a companion: you can travel with a friend or partner saving money.
Airport lounge: depending on the card, you can get completely free or discounted access.
Upgrade of your frequent flyer tier: high-end airline cards may help you advance within the programme and eventually gain the elite status.
In your evaluation, consider the place you live in, your destinations and the airlines covering your routes. The choice will be consequential.
Evaluating hotel credit cards
Like airline cards, hotel credit cards earn points with each purchase and reward more for dollars spent with the co-branded partner. The points earned go to the hotel loyalty account and you can redeem them for a free stay. In addition to sign-up bonuses, hotel cards offer several attractive perks.
Free nights: periodically (for ex. once a year) you earn a free stay at the hotel. You may unlock this perk also after spending a certain amount of money.
Early check-in or late check-out: you can have much more flexibility and zero waiting time.
Freebies and upgrades: you can upgrade your room or get discounted or even free amenities.
Loyalty program level booster: holding a hotel card may accelerate your status advancement so the elite level is closer.
In choosing your hotel card consider your destination and how many hotel companies may be part of the same group. This will definitely widen the opportunities of using your card.
Comparing The Best Travel Credit Cards
Best for Flexibility + point transfers + big sign-up bonus
Best for Big rewards on everyday spending
Best for Airline credit card
$0 intro for the first year, then $95
Best for Bonus travel rewards + high-end perks
Best for Hotel credit card
Best for Business travelers — perks
Best for Business travelers — bonus rewards + big sign-up offer
Best for Flat-rate travel rewards + no annual fee
Discover Match® Miles
Best for earning miles at a flat rate
Best for Cash back for travel bookings
How To Compare Travel Credit Card
I’ve already said there’s no perfect card. You won’t find anything offering the best in every aspect. Therefore, you have to find a balanced combination of advantages that best fits your needs. In general, I look at the following features when I have to choose the best travel credit card for me.
Although there are cards without a fee, they all offer lower bonuses and perks. So if you would like to earn a lot, get the highest rewards and special offers and services, you must choose a card with annual fees. Most of the fees range between $50 and $100 and can go up to over $450. Consider how much you travel and spend in a year. You can then evaluate what's more convenient for you. If you travel a lot, you'll surely get more than you spend.
You can distinguish between earn rate and burn rate that are equally important.
The earn rate is how many points (or miles) you earn per dollar spent.
The burn rate is the value of your points when you redeem them.
The higher the better, but remember to verify if the included categories meet your spending habits and needs.
You can also call it “welcome offer”. It can give you a huge amount of points to spend with your preferred airline or hotel (sometimes up to 50,000 or 100,000). Here's how it works. The more expensive the card, the higher the bonus usually is, but you need to spend a specif amount with the first few months to earn it. This threshold is commonly between $3,000 and $5,000. But if you know you can spend it, what you'll get back will repay you.
Are you not sure if you can reach this amount? Ask some family members or friends if you can pay their purchases with your card. Alternatively, apply for the card when you plan to do a big purchase. Reaching that threshold will be much easier.
Foreign transaction fees
When you travel abroad, using another currency is inevitable and with it the currency exchange. Using a credit card can save you a lot of time and trouble but you must pay attention to the foreign transaction fees.
If you are charged (on average 3%) on every purchase, you can say goodbye to your points because their value will be literally wiped out by those fees. So in your quest to choosing the best travel credit card, pick the one with zero foreign transaction fees.
If you are a nomad and long-term traveller, you probably like visiting the world. So, make sure your card is accepted internationally. For example, American Express can have some limits abroad. This doesn't mean you have to give up on those cards and their perks. Just remember to have at least a backup card to stay out of troubles.
When you work abroad or go on holiday, you usually purchase travel insurance. But keep in mind your travel credit card may also give you some coverage for lost baggage, trip cancellation, car insurance, just to mention a few. The coverage can be good enough to even give up on some options for your travel insurance so that you can save money along the year.
Points are just part of the package. You need to spend money in order to collect them. But perks are something you earn just for holding the card. As I explained before, there are several kinds of perks that can repay you for what you've spent.
How much does a night at the Hilton hotel in New York worth? How much can a Spa treatment cost you when you stay at your favourite five-star hotel? It's all a matter of habits and spending patterns. So get the cards that offer the perks you'll really use.
Full List of My Pick: The Best Travel Credit Cards
My pick for Flexibility + point transfers + big sign-up bonus
Chase Sapphire Preferred® Card
Why I Like It: the sign-up bonus is very high for an annual fee of just $95. You can transfer the points to many frequent flyer and hotel loyalty programmes or move them to other Chase Ultimate Rewards® cards that offer more perks. The points worth 1.25 more when you redeem them for travel through Chase Ultimate Rewards®.
The Bonus: 80,000 Chase Ultimate Rewards® points after spending $4,000 in the first three months. That's a $1,000 value in travel.
The Annual Fee: $95
The Rewards: 2X points on travel, dining and restaurants, takeout, dining out, and delivery services; 1 point per dollar spent worldwide on other purchases; 5X points on Lyft rides through March 2022; bonuses on parking garage fees, bus fares and other rideshare companies such as Uber.
Added Perks: zero foreign transaction fees; 25% more point redemption value for travel via Chase Ultimate Rewards®; unlimited $0 or reduced delivery fee on food purchased with DashPass, DoorDash's subscription service; no blackout dates; travel protection benefits.
My pick for big rewards on everyday spending
American Express® Gold Card
Why I Like It: American Express® Gold Card offers big rewards at restaurants worldwide, supermarkets in the USA, and some flights purchased directly or via amextravel.com plus hundreds of dollars per year in travel and dining credits. It's ideal for big spenders and travellers who also love dining.
The Bonus: 35,000 Membership Rewards® points after spending $4,000 in the first three months.
The Annual Fee: $250
The Rewards: 4X points on dining (takeout and delivery included); 4X points on groceries; 3X points on flights; 1 point on other eligible purchases.
Added Perks: no foreign transaction fees; $120 in credit for dining; $100 in credit for airline fee.
My pick for Airline credit card
United℠ Explorer Card
Why I Like It: you can enjoy a zero sign-up intro fee for the first year. This travel card offers a good list of perks for a relatively low annual fee and is perfect for United Airlines frequent flyers.
The Bonus: 40,000 bonus miles after spending $2,000 in the first three months.
The Annual Fee: $0 for the first year, then $95.
The Rewards: 2X miles at restaurants and hotels and on United; 2X miles on eligible delivery services such as DoorDash, GrubHub, Seamless, and Caviar; 1 mile per dollar spent on other purchases.
Added Perks: 1 free checked bag, $100 free credit for Global Entry or TSA PreCheck™; priority boarding; two United Club airport lounge one-time passes a year; no blackout dates; no foreign transaction fees; 25% back on United inflight purchases; primary rental car coverage; trip cancellation or interruption insurance.
My pick for Bonus travel rewards + high-end perks
Chase Sapphire Reserve®
Why I Like It: the card offers a generous sign-up bonus. In addition, you get rich rewards and perks and can transfer your points to many hotel and airlines partners.
The Bonus: 50,000 bonus miles after spending $4,000 in the first three months (a $750 value when you redeem through Chase Ultimate Rewards®).
The Annual Fee: $550
The Rewards: 3X points on dining and travel; 1 point per dollar spent on other purchases.
Added Perks: $300 annual travel reimbursement; $100 credits towards TSA PreCheck™ or Global Entry; $0 foreign transaction fees; access to 1000+ airport lounge worldwide; 50% more value for points when redeemed for travel booked via Chase Ultimate Rewards®; one year complimentary Lyft Pink membership; DashPass subscription from DoorDash after activation.
My pick for Hotel credit card
Marriott Bonvoy Boundless
Why I Like It: the welcome offer is the highest in the list. If you are a big spender and Marriott Hotel loyal customer, this card will offer great points and perks in addition to an amazing sign-up bonus.
The Bonus: 100,000 bonus points after spending $5,000 within the first three months (equals 5 free nights).
The Annual Fee: $95
The Rewards: 6X points for purchases at Marriott; 2X points for all other purchases.
Added Perks: 1 night free on your sign-up anniversary; no foreign transaction fee; 15 elite night credits per year; automatic Silver Elite Status each account anniversary; access to Gold status after $35,000 in annual spending.
My pick for Business travelers – perks
The Business Platinum Card® from American Express
Why I Like It: the welcome offer is pretty high although the annual fee is substantial, but if you travel for work and spend a lot for your business, the points and perks worth the expense.
The Bonus: 75,000 Membership Rewards® after spending $15,000 in the first three months.
The Annual Fee: $95
The Rewards: 5X points on flights and prepaid hotels on amextravel.com; 1.5X points on each eligible purchase of $5,000 or more (up to 1 million additional points annually); 1 point for all other eligible purchases.
Added Perks: $200 credit for airline fees; $100 credit for Global Entry or TSA Pre✔®; zero foreign transaction fees; 35% points back when you spend them with eligible airlines; automatic Gold Status at Marriott and Hilton hotels; up to $100 in credits for U.S. purchases with Dell Technologies until December 31, 2020; $20 monthly credits on U.S. shipping purchases; $20 in credits per month on US wireless telephone services; trip delay, cancellation and interruption insurance, car rental loss and damage insurance; baggage insurance.
My pick for Flat-rate travel rewards + no annual fee
Discover it® Miles
Why I Like It: you get it with zero annual fees and can earn unlimited miles on all purchases, from travel to accommodation, groceries and shopping. No minimum spending and no maximum rewards limits make Discover it® Miles travel credit card one of the most accessible and affordable.
The Bonus: unlimited bonus (at the end of the first year, all the points earned will be automatically converted into miles).
The Annual Fee: $0
The Rewards: 1.5X miles for every dollar spent on everything.
Added Perks: miles never expire; no foreign transaction fee; no blackout dates; you can use rewards on Amazon.com; redemption for cash or travel purchases (airline tickets, hotel rooms, travel agents, online travel sites, car rentals, restaurants, transportation and gas stations).
My pick for Business travelers — bonus rewards + big sign-up offer
Ink Business Preferred® Credit Card
Why I Like It: you get an amazing sign-up bonus for a low annual fee. In addition, you can transfer your points to several hotels and airlines frequent travel programmes (United, Marriott, etc.). This travel card is ideal for digital workers and businesses.
The Bonus: 100,000 bonus points after you spend $15,000 in the first 3 months (a $1.250 value when you redeem through Chase Ultimate Rewards®).
The Annual Fee: $95
The Rewards: 3X points per dollar on the first $150,000 spent each year on travel, internet, cable and phone services, shipping, advertising on social media and search engines; 1 point per dollar on all other purchases (with unlimited points).
Added Perks: 25% more value for points redeemed via Chase Ultimate Rewards®; points are valid as long as your account is open, $0 foreign transaction fee; employee card with no additional cost; point redemption for either travel, gift cards or cash back; cell phone protection.
My pick for Earning miles at a flat rate
Capital One Venture
Why I Like It: here's is another card with a generous sign-up bonus. The threshold may be high but the period is quite long (12 month). It pays high rewards and you can earn and redeem in every category with no limitation on time and brand.
The Bonus: 100,000 bonus miles when you spend $20,000 in the first 12 months or 50,000 miles after spending $3,000 in the first three months.
The Annual Fee: $95
The Rewards: Unlimited 2X miles per dollar on all purchases; 5X miles with Uber Eats (until January 31, 2021).
Added Perks: zero foreign transaction fees; no blackout dates; miles transfer to several travel loyalty programmes; $100 credits for TSA Pre✓® or Global Entry; redemption for gift cards; travel accident insurance; auto rental collision damage waiver.
My pick for Cash back for travel bookings
Chase Freedom Flex℠
Why I Like It: this travel card is specialized in cashback rewards and cost nothing per year. With zero annual fees and a focus on cashback, Chase Freedom Unlimited is one of the most affordable travel cards in the list and ideal for those who prefer cash over travel as a redemption option. The 5% cashback rate available even on travel booking is a great deal for any travellers.
The Bonus: $200 after you spend $500 on purchases in the first three months plus 5% cashback on grocery store purchases on up to $12,000 spent in the first year.
The Annual Fee: $0
The Rewards (cashback): 5% on travel purchased through Chase Ultimate Rewards®; 3% on dining at restaurants (takeout and delivery services included); 3% on drugstore purchases; 1.5% on all other purchases.
Added Perks: 5% cashback on Lyft rides through March 2022; a complimentary 3 months of DashPass; DoorDash's subscription service; 0% intro APR in the first 15 months; no expiration for cashback rewards; no minimum to redeem for cash back; trip cancellation/interruption insurance; auto rental collision damage waiver; purchase protection.
Does Opening A Lot of Credit Cards Hurt My Credit?
Opening and closing a lot of credit cards at once may hurt your credit. That's because every time you request a new loan or credit card, your score slightly drops. But there's a solution to keep your credit score good: applying for just a few credit cards over a medium to long period.
As long as you pay your monthly balance and keep good credit, nobody will knock on your door complaining about a poor credit score. On the contrary, owning more than one credit card can improve your overall debt-to-credit ratio (unless you spend all the credit available in every card you have). According to FICO®, a good debt-to-credit ratio percentage is below 30%.
What If You Have Poor Credit?
If you have a low score (below 650), you won't have access to most travel credit cards or the full list of options. But you can still win your fight and eventually get the high-end credit cards that can grant you bigger points and rewards. For that, just follow these steps.
- Check your credit score through dedicated services and websites (for the US, you can visit AnnualCreditReport.com and get your report).
- Dispute any mistake or incorrect information with your local credit reporting agency.
- Start improving your credit score over time getting a secured credit card. This card allows you to deposit some cash (like a pre-paid card) and spend it every month. But remember to pay off the amount monthly. This will make you trustworthy thanks to good credit reports that the secured card will automatically send to the credit bureaus.
- Become an additional cardholder (on someone else's card with good credit). That person will act as your voucher and your credit score will improve quickly. Keep in mind your missed payments will also appear in his/her account and vice versa.
- Reduce your current debts and pay your bills on time. Moving your debt to zero-interest cards such as Discover will give you additional help.
Pros and Cons of Getting a Rewards Travel Credit Card
- High sign-up bonus: the best travel credit cards usually give you high welcome bonuses, even over $1,000. That's a great deal, good enough to get your next flight ticket for free.
- Rewards earned on every purchase: people buy goods and services almost every day. When you pay with a travel rewards credit card, the more you spend the more you earn in points. This will bring you closer and closer to your next trip that you literally get free of charge.
- Perks: I've already talked about them and their importance in evaluating travel cards (freebies, support, privileges, etc.). They can really make your travel cheaper and more comfortable.
- Variable redemption value: unlike cash-back cards, points you earn with other travel credit cards can have different value based on how you decide to use them. So 1 cent may become 2 cents or more. I think this multiplier effect is very attractive and allows you to maximise your profit using a strategic approach.
- Additional points: when you pay a flight ticket or hotel room using your travel card, you earn double points, both with your card and your travel company's loyalty programme.
- No international transaction fees: you can travel and spend abroad saving money. The currency exchange rate will be the only expense for using your card.
- High annual fees: this is bad if you refuse to pay anything in any circumstances. But remember that if you use your card frequently, bonuses, points and perks will repay this expense.
- Not the best deal for occasional travellers: If you're not going to travel much, you lose most of the opportunities to earn and use your points and cover the annual fee.
- A high threshold to earn the welcome offer: spending money and accumulate debt – with the consequential negative interests to pay – just for the sake of gaining the sign-up bonus would do more harm than good. Fortunately, there are some solutions I've already given to you in the previous paragraphs.
- Higher interest rates: that's a bad deal if you think you'll carry a balance each month. In this case, your best option is a zero or low-interest card.
- Cashback gives poor value compared to redemption for travel: getting some cashback can be more simple and flexible because it lets you know exactly how much you get and you can spend your money on everything. But remember you'll get more value if you use your points to pay for travel. So it depends on your needs and the type of traveller you are.
There are many travel credit cards available and issuers compete with one another in offering the best options to get and retain more customers. There’s not a perfect travel card. They are all different and have pros and cons. But you can find the best one for your habits and lifestyle and I hope this guide helped you learn all you need to make your choice.
Which travel credit cards do you already use? How do they help you save and earn money? How do you prefer to redeem your points?