Is it worth using travel credit cards? Learn how they work and what they offer
Travel credit cards are a powerful tool for those looking to maximize their travel experiences and save money while exploring the world.
These cards offer a range of exclusive benefits that can transform the way you travel, from foreign transaction fee waivers to access to luxurious airport VIP lounges.
In this article, we will explore in detail how travel credit cards work, the main types available, their benefits, and how to redeem points and miles.
Keep reading to find out if it’s worth including a travel credit card in your financial portfolio.
How do travel credit cards work?
Travel credit cards function similarly to traditional credit cards but with a greater focus on travel-related rewards.
When you use these cards for purchases, you accumulate points or miles that can be exchanged for airline tickets, hotel stays, car rentals, and other travel expenses.
Additionally, many of these cards offer additional benefits such as travel insurance, VIP lounge access, and waivers on international transaction fees.
When making a purchase with a travel credit card, the purchase amount is converted into points or miles, usually with a specific conversion rate.
For example, you might earn one point for every dollar spent on general purchases and two points for every dollar spent on travel expenses.
These points can be accumulated over time and, once you have enough, they can be redeemed for travel rewards.
Main types of travel credit cards
There are different types of travel credit cards, each offering unique advantages. The main types include airline cards, hotel cards, and general travel cards. Let’s explore each one:
Airline Cards
Airline cards are designed to benefit those who frequently fly with a specific airline.
They generally offer bonus miles for purchases made with the partner airline, along with additional perks such as priority boarding, free checked bags, and VIP lounge access.
Popular examples include the Delta SkyMiles American Express and the United Explorer Card.
Hotel Cards
Hotel cards are ideal for travelers who prefer to stay at specific hotel chains.
These cards offer points for spending at partner hotels, which can be redeemed for free nights, room upgrades, and other exclusive benefits.
The Marriott Bonvoy Boundless and Hilton Honors American Express Aspire are examples of hotel cards that offer significant rewards for frequent guests.
General Travel Cards
General travel cards are not tied to a specific airline or hotel chain, offering greater flexibility in how you can use your rewards.
They allow you to accumulate points or miles across a wide range of spending categories and then redeem them for various travel options.
The Chase Sapphire Preferred and American Express Gold Card are examples of versatile travel cards that offer ample opportunities for earning and redeeming points.
Discover the main benefits of a travel card
Travel credit cards offer a variety of benefits that can significantly enhance your travel experience. Let’s look at some of the most common benefits:
Foreign Transaction Fee Waiver
The foreign transaction fee waiver is an essential benefit for those who travel internationally.
Many credit cards charge a foreign transaction fee, which can range from 1% to 3% per purchase made outside the United States.
Travel credit cards, however, often offer a waiver of this fee, allowing you to save money on all your international purchases.
Trip Cancellation and Delay Insurance
Unexpected events can happen at any time, and that’s where trip cancellation and delay insurance come into play.
Many travel credit cards offer coverage for trip cancellations due to emergencies such as health issues or adverse weather conditions.
Additionally, if your flight is delayed for a significant period, you may be reimbursed for expenses like accommodations and meals.
Baggage Insurance
Losing luggage during a trip can be a stressful experience. Fortunately, many travel credit cards offer baggage insurance, which covers loss, damage, or delays in baggage.
This can provide additional peace of mind, knowing that you’ll be reimbursed for essential items if your luggage doesn’t arrive at the destination with you.
VIP Lounge Access
For a more comfortable travel experience, many travel credit cards offer access to VIP lounges at airports around the world.
These lounges provide a relaxing environment with amenities such as free Wi-Fi, drinks, and snacks, work areas, and even showers in some cases.
Access to these lounges can turn long layovers and waits into a pleasant part of the journey.
Travel and Hotel Credits
Some travel credit cards offer annual travel credits, which can be used to book hotels, flights, car rentals, and other travel activities.
These credits can significantly reduce the cost of your trips, providing an additional financial incentive to use the card.
How to redeem points and miles?
Redeeming points and miles accumulated on travel credit cards is generally a simple and straightforward process.
Most card issuers offer an online portal where you can access your account and view your points or miles balance.
From there, you can explore the available redemption options, which may include airline tickets, hotel stays, car rentals, and other travel experiences.
When redeeming points or miles, it’s important to consider the redemption value, which can vary depending on the reward chosen. For example, redeeming points for a business class airline ticket may offer a higher value per point than redeeming for an economy flight.
Additionally, some airlines and hotels offer special promotions and discounts for rewards program members, allowing you to get even more value from your points.
Travel credit cards offer a range of valuable benefits that can significantly enhance your travel experiences, from savings on foreign transaction fees to access to VIP lounges and comprehensive insurance.
By choosing the right card and using its benefits strategically, you can turn every trip into a more enjoyable and cost-effective experience.
Explore the options available and consider adding a travel credit card to your financial portfolio to maximize your future adventures.
For more detailed and up-to-date information on travel credit cards, be sure to visit our recommended websites and continue reading how to apply for a credit card.