How do travel credit cards work?

Travel credit cards turn purchases into points or miles that can be redeemed for travel purchases, like flights and hotel stays. Sometimes you can redeem those points for cash or a gift card, but you typically get the best rate when using them to book travel. The top cards have their own travel booking portals through which you can find flights, hotels and rental cars. Sometimes, points are worth more when used in credit card company portals. Airline credit cards and hotel credit cards operate like loyalty programs in that you stay in a closed-loop rewards system. You earn rewards when you purchase flights or book hotels through your chosen companies, and you can use those points for perks or future bookings through the same airline or hotel group.

How do you choose the best travel credit card?

The points and travel benefits that you accrue through a travel rewards program are often redeemed through your credit card issuer's website (or app), or they appear as a statement credit reimbursing you for past purchases you made with your credit card. Points or miles can also be transferred to travel partners -- mostly hotels and airlines -- at a fluctuating conversion rate, where they can then be used to book a flight or hotel room. In choosing the best travel credit card, there are a few key factors to consider: Annual fees : Most travel rewards programs have annual fees, with some climbing as high as $695, but those fees are usually mitigated by monthly or annual credits. Exclusive perks : Some travel rewards card options also grant access to exclusive travel perks, like airline lounges, priority boarding or VIP welcomes at hotels. The value of those perks is subjective and something you'll have to evaluate based on your needs and wants. Foreign transaction fees : The best travel cards don't make users pay a foreign transaction fee, so that's not something you have to worry about.

What extra benefits do travel credit cards usually offer?

Most travel credit cards, some of which carry hefty annual fees, include benefits that add value to those cards, such as travel accident insurance, trip cancellation insurance, trip delay reimbursement or protection, lost luggage reimbursement and rental car collision insurance.

Table of Contents

Pros and cons of the Chase Sapphire Preferred
Who should choose this card?
Who should skip it?
A closer look at the Chase Sapphire Preferred
Chase Sapphire Reserve®
FAQs
Our approach

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Article updated on Nov 18, 2024

The Chase Sapphire Preferred Should Be Your Next Travel Credit Card -- Here’s Why

The Chase Sapphire Preferred® Card is an affordable and rewarding option with many attractive features that put it at the head of the pack.

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Article updated on Nov 18, 2024

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Table of Contents

Pros and cons of the Chase Sapphire Preferred
Who should choose this card?
Who should skip it?
A closer look at the Chase Sapphire Preferred
Chase Sapphire Reserve®
FAQs
Our approach

Written by

Joe Van Brussel

Contributor