Depending on your credit score, how you plant to accept credit card fees and how you want to earn and use rewards, you need to choose the right travel card. In order to get more customers, credit card companies often join hands with various travel brands and give amazing offers to consumers such as sign up bonuses, special discounts, loyalty points and more. By taking advantage of these offers, you can easily get hotel rooms, free air tickets, vacations, and even cash back.
So how do you know which travel card is right for you? The truth is there is no right card because all of them offers different deals that are designed for different purposes. Here are the most important things you should know before applying for a travel card.
What to Look for in a Travel Rewards Card
The following are the features that you should look for in a travel rewards card:
• A big sign-up bonus – The most important thing to look for in a travel card is a big sign-up bonus, the bigger the better. A huge sign-up bonus helps jump-start your mileage account, which may earn you a free flight or sometimes a few free flights. In order to get these huge bonuses, you need to either meet a minimum spending threshold within a certain period of time or make a single purchase. From then onward, you earn points for every dollar you spend. Typical card bonuses range between 25,000 to 50,000 points, although it may sometimes go as high as 100,000. Do not sign up for a card if it don’t offer a big sign-up bonus.
• Added category spending bonus — While most credit cards offer you one point per dollar, there are credit cards that offer you more points for every dollar spent, when you make a purchase from specific retailers, or buy a particular brand. Using such credit cards will help you earn points very quickly. So make sure to get cards that that give you extra points per dollar.
• Cards with low spending minimum – In order to get great bonus offers, you are required to spend a minimum amount of money. A good idea would be to sign up for those cards that demand a minimum spending amount of $1,000–3,000 USD within a three to six month time frame. There are offers where you can get a huge bonus simply by making a single purchase. Although with high minimum cards you can earn huge rewards, its always better to start with the low minimum ones. Make sure not to spend more than you would normally, in order to get the points because if you do that, the points are no longer free.
• Get special perks – You can get special perks with all of these travel credit cards. Choose those cards that offer priority boarding, free checked baggage, free nights, and no foreign transaction fees. In addition to the extra miles, these perks are what makes your travel a way lot easier.
• Annual fees – If you are a frequent traveler, it is worth it to get a card with an annual fee. These cards offer you great reward offers, allowing you to gather points faster, get better travel protection and take better advantage of special offers and services. The annual fees of most company branded credit cards usually range from $50-$95.
Foreign transaction fees
You would have to pay a certain amount of foreign transaction fees whenever you are using your card overseas. One way to avoid paying foreign fees is to use the Capital One Venture Card, where there is no annual fee and also no rewards structure. For those who don’t care about points, this is the right card. However, if you want points and avoid overseas fees, you can go for the Starwood American Express, Chase Sapphire Preferred, Barclay’s Arrival Plus or any airline branded card.
Will your credit be affected?
Opening and closing many credit cards all at the same time can affect your credit score. Every time you face an inquiry about whether that is a credit card or car loan or home loan, there will be a slight dip in your credit score. However, applying for a few credit cards won’t hurt your credit score as long as you space out your applications and keep good credit. Maintaining good credit helps increase your credit rating over time.
What happens if you have poor credit?
Many travel cards are issued to only those having a high credit score. If you have a low score, not only will your options be limited but you may also be declined from getting a travel card. In order to fix your credit score, you need to build it up. The following are the ways you can improve your credit score:
• Get a free copy of your credit report from AnnualCreditReport.com.
• Any incorrect information on your credit report should be taken up with the credit reporting agencies.
• Get a secured credit card.
• Become an authorized user on the card of someone else with good credit.
• Pay all current bills on time.
Which Credit Card Should You Get?
The plethora of credit cards out there definitely makes it difficult to choose from. A good idea would be to get as many as you can, as it will help increase the number of points you can get.
What is your goal?
Before getting a card, first think about why you really want the card. If you are just looking for the points, go for the Chase or American Express cards because you can use their points and rewards with a many travel companies. If you want free hotel rooms, then sign up for hotel cards. Focus on a couple of travel rewards credit cards that help you reach your goal and then spread out from there.
Sites like CreditCards.com help people find the cards that are available to them. All you have to do is enter your personal information and based on your history, they will show you the cards available to you. While choosing a travel credit card, you need to think about what is most important to you. Every card comes with different offers and the key is choosing the ones that are best serve your purpose.