Getting Started with Travel Credit Cards
March 2023
Kelly Brennan
Imagine this: you’re flying first class to an adult’s only resort somewhere tropical and you’re drinking champagne thinking about the massage you're going to get at the beachside when you get there. Sounds amazing, right? Well, as we know, first class isn’t exactly affordable, so how do you make that dream become reality? Three words: travel credit cards.
Travel credit cards give you rewards like most credit cards, but they give rewards in the form of points or miles which can be redeemed for travel expenses like flights and hotels. A lot of travel credit cards will offer introductory offers. For example, if you spend $4,000 in the first three months, you’ll get a certain amount of points that’s very large. A general rule of thumb is any introductory offer of 55,000 points or more is a good offer, anything lower isn’t worth your time. The higher the introductory offer rewards usually means the more that you have to spend.
You can redeem these points at the card’s transfer partners to get your travel expenses paid for with money that you already spent. Transfer partners are specific airline or hotel rewards programs that are compatible with the card’s rewards program. NerdWallet gives a great example: “Booking two nights at a Wyndham hotel in Newport, Rhode Island, for October 2022 costs $700.45 or 70,045 miles through the Capital One travel portal (as of May 2022). But in this case, transferring the miles to Wyndham rather than booking through Capital One could be a better move. By transferring Capital One Miles to Wyndham (1 Capital One Mile = 1 Wyndham point), you could book that same hotel for the same two nights for a total of just 30,000 points. That boosts the value of your miles to 2.3 cents each.”
Travel credit cards usually come with an annual fee which is a con in the grand scheme of things, but travel credit cards also usually come with extra perks. The extra perks include things like TSA PreCheck, airport lounge access, and elite status at certain hotels and rental car companies (of course depending on the card).
One of the most important things to know about yourself before opening up a card is your credit score. Oftentimes travel credit cards are only available to those with excellent credit scores. The most important thing to understand once you’ve opened the card is that you should be paying the card fully off each month. NerdWallet puts it perfectly: “Paying interest to earn travel rewards negates the value you’d derive from earning points. Remember, this is supposed to be a fun way to save money and travel the world for nearly free — it should not put you in debt.”
The other thing you should practice with your new travel credit card is using it for everything. To maximize your rewards on the card, you want to stop using any method of payment that’s not going to earn you rewards. You should take your travel credit card with you everywhere you go and use it for everything… even small things like a hamburger at McDonalds. This is the fastest and most efficient way to earn your travel rewards.
There’s also shopping portals that you can shop through to maximize your rewards. For example, if you want to buy something from Sephora, you can shop through the United shopping portal and earn 600 points towards your United miles. But if you pay for your purchase with your travel credit card, you also earn your rewards points on the card as well. It’s a double whammy of points!
Another way to earn points is through dining! A lot of credit cards will offer dining rewards at participating restaurants. All you have to do is sign up for the rewards program, add a credit card, and then when you dine and use the card on file, your frequent flier miles will be posted to your account! This is a great way to earn bonus points! You’re already out eating, you might as well earn extra points for it!
Some helpful tips to get started: don’t try to learn everything before you get started. The travel world is filled with words and phrases that you’re not going to understand right away and that is OKAY! Just get started! Take advantage of the introductory offers and use the tips in this article to get you started.
Remember that you shouldn’t hoard your points! Unlike money, travel points don’t gain value over time, they actually decrease in value. Don’t just earn your points, make sure you’re using them too! And lastly, don’t chase value. Just because something has an amazing value doesn’t mean you need to jump on the opportunity. Keep in mind your travel goals and wishes and start there.
Happy traveling!
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