If you are a traveler, but presently do not use a travel reward credit card, It is time you get one. Owning a travel reward credit card as a traveler earns you amazing rewards from free flights to hotel accommodation. A rewards card can aid your travel budget thereby helping you widen your horizon.
As credit card issuers compete for customers, they make offers on all reward cards especially travel reward cards interesting; Says Bill Hardekopf, CEO of LowCards.com.
When you make purchases with your rewards card, credit issuers are earning from you. Thus, they work hard to have you spend with their card despite the competitive nature of the market. To gain your interest, they make the rewards interesting. Hardekopf told NBC News BETTER said.
NerdWallet analyzed nine popular travel rewards credit cards. Using their spending patterns, he discovered that an average American could earn up to $227 a year through travel bonus.
The Best Credit Cards for Travelers
Here’s how to choose the best credit cards for travelers & rewards card:
Most travel rewards card issuers offer initial sign up bonus. Plus additional points up to $1,000 when you spend $5,000 within the first 90 days of account opening. From the analysis made by NerdWallet, he was able to discover the average sign-up bonus was worth $450 in rewards after accounting for first-year annual fees.
presently, the sign-up point bonuses on two highly-rated cards are relatively high. The two cards are the Chase Sapphire Preferred: $625 value and the Capital One Venture Rewards: $500 value.
NerdWallet then suggests, that you make advance application for a travel reward card at least five months before your travel date. This allows you to earn benefits; such as the sign-up bonus and points that can take care of your flight ticket and hotel stays.
Do not overspend:
With a rewards card, a cardholder can easily overspend. According to a NerdWallet nationwide survey, about 34% of travel card holders overspend to earn travel points. As for millennials, it was 50%, Gen Xers, 34% and baby boomers, 19%.
A relative 10% also, choose not to have a travel rewards card just to minimize spending. But for those who can stick to their budget, a travel rewards card is best for them. With a travel rewards card, they can save big from rewards and cut down expenses on travel.NerdWallet report opt.
The travel rewards card is not for everyone:
To qualify for the bonuses that come from a credit card, be it cash back or travel, you need to maintain a good credit score. The suggested credit score ranges from 700 score and above.
Also, avoid carrying balances on your credit card. Endeavor to clear your balance in full each month. Balances wipe rewards through interest and fees you pay; NerdWallet’s credit card expert Kimberly Palmer told NBC News BETTER.
NerdWallet did the calculation and came up with the following- Outweigh the value of the sign-up bonus after five months and wipe out your total first-year value after seven months. These are what happens if you do not pay in full.
Some rewards card cut a months point if you do not make your payment. And to regain a lost point, you might pay $25 or more as reinstatement fee. It pays to pay on time.
Again, most travel rewards card come with an annual fee of $95 but not paid for the first year. After this very first offer, you have to make big purchases to earn good points. If you have a balance on your credit card, your bonuses are valueless when you consider the interest you pay.
The Bank of America Travel Rewards card has a low threshold.
The bank of America might be fitting for you if you spend moderately; because it has no fee; said, Palmer. To earn the sign-up bonus of $200 dollar, you only need to spend $1000 within the first three months of account opening.
The American Express Platinum Card has an annual fee of $550 and the Chase Sapphire Reserve $450 annual fee.They are designed specifically for road warriors. However, they come with many perks.
The platinum card offers an annual credit of $200 for airline fees and an Uber credit up to $200, plus access to more than a thousand airport lounges worldwide. Both cards reimburse the application fee for TSA PreCheck ($85) and Global Entry ($100).
If you choose a specific airline or hotel over another, get a co-branded credit card with that airline or hotel of your choice. According to Jill Gonzales, senior analyst at WalletHub, the co-branded cards have some money-saving perks than one of the general-use travel cards.
Another is the bonus earned during the anniversary of the airline or hotel. Most of them offer a sign-up bonus and vouchers. Typically they have two perks – the free luggage check and the priority boarding check. This perk worth up to $200 for a round trip made by a family of four.
To find the right card for you, compare the various segments of the market such as the annual fee, interest rate, sign up bonus, and other amazing perks. Consider specific segments of the market that suite you most. That is the areas where you spend the most. Remember a credit card cannot cover all your activities you can always apply for a new card.
By Herb Weisbau