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How to Pick a Travel Rewards Credit Card

Blog, Credit Cards, Guides and How To September 7, 2016

#1 Tip: Don't pay too many fees

#1 Tip: Don’t pay too many fees

Not all travel reward cards are built the same, and what may be a good option for someone else isn’t always the best deal for you. Here are six important questions you should ask when picking a travel rewards credit card:

1. How much is the foreign transaction fee?

Most cards charge foreign transaction fees of roughly 2.5-3.5% on every purchase made outside the United States. If you plan to spend money on international purchases — either when you shop online or when you travel overseas — get a credit card that doesn’t charge you foreign transaction fees.

 

2. How much does the card cost?

Yes, travel rewards cards earn you points and miles, but often not without a cost. Fee-based travel credit cards cost cardholders an average of $163 in 2014 — that was a significant increase from the average $87 fee the same cards charged in 2013. Before you choose a credit card, make sure that you know the current annual fees and terms, and whether they are being waived for the first year – don’t get roped into high fees in year two!

Seriously consider the total cost of using the card compared to the benefits you stand to earn for your purchases. And be realistic – if you’ll likely carry a balance, include interest charges. As appealing as travel rewards cards can be, you may fare better (no pun intended!) with a card that has fewer rewards but costs you less.

 

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3. What safety features does the card have?

Safety features of your card can reduce the amount of hassle you experience if the unexpected happens during your trips. Ask the issuers how quickly they can provide a replacement card if yours is stolen or lost, how that works internationally, and along with the amount of liability protection offered in case the worst happens and you lose your cash.

Card issuers vary in how much they’re willing to assist in resolving unauthorized or fraudulent charges, and whether they’ll contact the merchants involved on your behalf.

4. What are the limits on how and where you earn rewards?

Some travel reward programs have purchase maximums for certain categories, like restaurants, gas stations, or grocery stores. Some cards may not offer rewards for purchases made with virtual wallets. It’s a pain, but read the fine print about the card(s) you’re applying for before you apply.

5. What is redeeming miles/points REALLY like?

Redemption of rewards can vary as much as card rewards programs (side note: check out our guide to redeeming miles and points). Some issuers require you to earn a minimum amount of miles/points before they can be redeemed. Others take a few weeks to credit earned rewards to your account.

6. What travel perks are included?

There are some credit card perks that come in handy as you travel.

For example, some credit card issuers offer rental car coverage, travel delay, and accident insurance, lost luggage insurance, concierge services and emergency assistance.

Many cards especially branded airline and hotel cards have cool perks such as free checked bags, discounts, priority boarding, and various travel-related perks.

Decide which travel perks are non-negotiables for you and ensure the credit card you choose has them.

What do you look for in a travel rewards credit card? Let me know in the comments section below.

 

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