Are travel credit cards worth it?! If you can’t handle these 6 things, then the answer is a BIG NO! Learn what these things are BEFORE you apply for your next credit card. Click “Show More” to see Ad Disclosure.
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If you’re considering applying for a travel credit card, then there are a number of things you’ll have to deal with to ensure the card makes sense.
1 | Annual Fees
Many travel credit cards have annual fees of $95 and up. For instance, the Chase Sapphire Preferred has a $95 annual fee, the Chase Sapphire Reserve has a $550 annual fee, the Amex Platinum Card has a $695 annual fee, the Amex Gold Card has a $250 annual fee, the Citi Premier Card has a $95 annual fee, and the Capital One Venture X has a $395 annual fee. However, a lot of these premium travel credit cards come with benefits that can outweigh the cost (e.g. airport lounge access via a Priority Pass membership).
2 | Devaluations
Credit card points and miles tend to lose value over time. This is why the phrase “earn and burn” is so common in the industry. A hotel costing 60,000 points now might cost 80,000 points in the future. Once you have enough rewards to take a trip, it’s probably a good time to book it. To help hedge against this, it’s often best to focus on flexible and transferrable points as those tend to get devalued less often and less dramatically. Examples include Chase Ultimate Rewards points, Amex Membership Rewards points, Citi ThankYou points, Capital One Venture miles, and Bilt Rewards points.
3 | Expiration Dates
Here we’re referring to points and miles, credits, certificates, and other benefits. All of these typically have a lifespan (e.g. monthly, quarterly, annually, etc.) before they expire or renew, and many do not roll over.
4 | Managing Benefits
The credit card benefits you receive have terms, restrictions, availability constraints, and some work required in order to maximize them. Be sure you’re able to juggle them in order to more easily justify any annual fees.
5 | Learning Curve
Unlike cash back credit cards, travel credit cards are much more complex. Their rewards often require you to plan in advance because award availability for certain flights or hotels may not be open year-round. The value of points or miles from one program may also have entirely different values compared to another program, so you’ll want to learn the average values for Chase Ultimate Rewards points, Amex Membership Rewards points, etc., including the rewards values for airline and hotel programs. Additionally, you’ll want to understand transfer partners and airline alliances to take better advantage of your rewards (e.g. redeeming points for maximum value).
6 | Bigger Spend Requirements
In order to earn the credit card signup bonuses, you’ll find that the spend requirements are oftentimes higher on travel credit cards. Make sure your monthly budget allows for the required spend prior to applying (otherwise, you’ll likely want to avoid getting the card).
Disclosure: This site is part of an affiliate sales network and receives compensation for sending traffic to partner sites, such as CreditCards.com. This compensation may impact how and where links appear on this site. This site does not include all financial companies or all available financial offers. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. Mark Reese is not a financial advisor.
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