So.. Do You Even Need a Travel Rewards Credit Card?
Though it may be tempting to rely solely on cash and debit, a credit card is far safer and provides much more benefit to you than simply forking over cash at the restaurant. The travel rewards you can earn are simply a bonus.
Not only is a travel card safer than cash, it can prevent theft & fraud, earn you bonus points and miles, provides travel insurance coverage, and even protects you from fees and scams associated with currency exchanges.
Travel Rewards Credit Cards Prevent Theft & Fraud
Let’s say your wallet gets stolen. (It happens.) If you were carrying cash or debit, you can kiss your money goodbye. If if you’re able to put a freeze on your debit account activity, any funds already deducted from your bank account are lost to you and debit fraud can take a lot longer to sort out. With a travel credit card, you can easily freeze your account and claim transactions as fraud – all without money ever being drawn from your account. This is because credit cards act as a barrier between your money and anyone trying to use it.
Debit cards, especially those without modern chip technology, can also be copied. Identity thieves are able to do this without your knowledge because it doesn’t even require them to have your card. Your bank account could be drained before you ever notice. A complete nightmare! All modern travel credit cards now come with EMV Chips that help prevent this type of theft. In fact, if your card does not have a chip, you may have a hard time using it abroad. Europe, for example, has completely adopted this technology and some ATMs even require card carriers to have it to withdraw money.
Travel Rewards Credit Cards Prevent Currency Exchange Schemes
If you’ve ever needed to exchange currency, you’re likely familiar with the varying rates and general seediness of the practice. If you only have cash or debit, you’ll be paying a high price for your money exchange.
Whenever you pay for something abroad by card, you’ll be asked if you want to pay in USD or the local currency. If you choose to pay in USD, you may be charged an additional exchange fee in addition to the exchange rate – and all on top of foreign transaction fees from your bank and your card company.
One of the biggest benefits to using credit cards with travel rewards is that most offer no foreign transaction fees and often have a better market exchange rate. Always choose to pay in the local currency and let the credit card handle the rest.
Travel Rewards Credit Cards Give You Free Money & Bonuses
Most travel cards have some amazing incentives for signing up and spending with them. Not only can you earn an incredible signup bonus, but they continue to serve you as you spend — some reward programs allow you to earn up to 5 points per dollar spent.
By using these cards to pay for every day purchases you would normally make anyway, you can even enjoy extra perks like free checked bags, access to exclusive lounges, and even discounts on flights.
And who doesn’t love a free flight? For more info on how to fly for free, check out my review of the Ultimate Guide to Travel Hacking.
The Best Travel Rewards Credit Cards
There are dozens of travel cards out there. Every airline has them and every big bank, too. Choosing the right travel rewards credit card is dependent on your spending habits, your travel plans, and your preferred vendors. My top criteria for a travel rewards card is simple:
- No Foreign Transaction Fees
- Mandatory EMV Chip
- High Signup Bonus
- No Annual Fee
- High Points per Dollar Rate
If your spending habits justify a card with an annual fee, look for card with a better signup offer or better points rate.
#1 – BankAmericard Travel Rewards Credit Card
- No Foreign Transaction Fees
- Includes EMV Chip
- 20,000 Signup Points
- No Annual Fee
- 1.5 Points per Dollar on Everything
The BankAmericard Travel Rewards credit card was the first credit card I ever applied for. Not only have I benefited greatly from the rewards (say “free flight to Finland” three times fast) but it has also protected me from fraud on more than one occasion.
All the key criteria are met: no ForEx fees, EMV chip, bonus points on signup, no annual fee, and it beats out the usual 1 point per dollar by 50%! If you’re new to travel rewards programs – or credit cards in general – this is a great one to start with.
#2 – Capital One Venture Rewards Credit Card
- No Foreign Transaction Fees
- Includes EMV Chip
- 40,000 Signup Points
- $59 Annual Fee (waived first year)
- 2 Miles per Dollar on Everything
The Capital One Venture Rewards credit card is the best card that balances its annual fee with mile earning potential. Though it sports a small annual fee that’s waived for the first year, the signup bonus and flat 2 miles per dollar easily makes up for it.
To make the card worthwhile, you’ll need to spend at least $3,000 per year to earn enough miles (6,000) to cover your annual fee, an easy feat for most modern spenders — especially over a 12-month period.
#3 – Chase Sapphire Preferred Credit Card
- No Foreign Transaction Fees
- Includes EMV Chip
- 55,000 Potential Signup Points (50,000 base)
- $95 Annual Fee (waived first year)
- 1 Point per Dollar on Everything, 2 Points per Dollar on Travel & Dining
The Chase Sapphire Preferred credit card is a big earner for travelers. The 50,000 signup bonus goes a long way towards paying for your flight while you earn 2 points for flights, trains, taxis, diners, fast food, and even hotels (aka 90% of your expenses abroad).
This card has the added benefit of giving you an extra 20% when you redeem your points on travel expenses. So, if you have 50,000 points, it can be redeemed for $625 of plane tickets and more!
There is a $95 annal fee, so you’ll need to spend at least $4,750 on travel and dining every year to break even. To find out if this card is for you, take a look at your general and travel spending habits over the past year.
#4 – United MileagePlus Explorer Credit Card
- No Foreign Transaction Fees
- Includes EMV Chip
- 45,000 Potential Signup Miles (30,000 base)
- $95 Annual Fee (waived first year)
- 1 Mile per Dollar on Everything, 2 Miles per Dollar on United Flights
The United MileagePlus Explorer credit card isn’t for everyone. This card, like most airline credit cards, are designed for brand loyalty. In short, to reap the maximum rewards from this card, you’ll need to fly with United.
Not only does this card include no ForEx fees and an EMV chip, but it puts you priority boarding, let’s you fly your first checked bag for free, and gives you 2 United Club passes every year.
But the real benefit of this card is that they let you earn a 10,000 mile bonus every year if you spend $25,000, leaving you with a potential 60,000 miles per year or more – essentially a free flight every year. If you’re a frequent flyer or a business traveler, this card is for you — you’ll need to spend $4,750 on United flights every year in order to make it worth the $95 annual fee.
Need more information on Credit Cards with Travel Rewards?
Check out these additional resources on travel credit cards:
- Nerdwallet: Best Travel Credit Cards 2016
- Nomadic Matt: How to Pick a Travel Credit Card
- The Points Guy: Top 10 Reasons to Get a Travel Credit Card
