A Beginner’s Guide to Travel Credit Cards
The Best Travel Credit Card for Beginners
Traveling can quickly become complicated business. Passports and planning, guides and itineraries, luggage and lodgings — a successful trip involves a lot of effort. However, many travelers do not put much thought into the particulars of paying for their escapes. Money is money whether or not you use debit cards, credit cards, travelers checks, or cash, right? When it comes to credit cards, there are better ones to use than others, and here we explore what the best travel credit card for beginners is.
Travel-focused credit cards can make a big difference in planning and paying for your trip. Also, if things go wrong, a travel credit card can protect you from fraud, cover some medical expenses, and help get you safely home.
How Are Travel Cards Different From Regular Credit Cards?
Even if you have never had a credit card, you likely understand the basics of how one works. Credit cards allow you to delay paying for goods and services immediately in exchange for paying interest on any amount that you do not pay off within a roughly 20-day time frame. Additionally, most credit cards have reward programs that reward you for making travel-related purchases.
How? You typically get a number of points for every dollar of balance you pay off. You can then redeem those points for various kinds of rewards. What exactly those rewards are depends on the program your card has in place and you can probably already guess how travel credit cards differ from normal ones.
Travel credit cards usually allow you to use your points to purchase things like plane tickets, hotel rooms, credits for ride-sharing services, train or subway tickets, and the like. While regular credit-card reward programs may include some of these perks, travel credit cards specialize in exactly the things you would want to get if you want to travel.
Additionally, many travel credit cards offer some form of travel insurance, a kind of coverage that can provide reimbursement if your flight gets delayed, your bags get lost or you need evacuation due to personal injury. While the rewards provided by travel credit cards sound wonderful, you can often bump up against a surprise restriction that keeps you from getting the deals you want.
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Things To Know About Travel Credit Cards
First, while all travel credit cards work on a points system, not all points are created equal. Indeed, some are not even called points. You may find them referred to as miles, and (ironically) these miles may not have anything to do with flights. They’re simply points by another name.
An important thing you have to remember about points is that you cannot necessarily redeem them for whatever you want. Many credit card companies partner with specific hotels chains, airlines and the like, allowing you to pay for things from those particular companies, and those companies only. Though you may not like the restrictions, these types of programs are often the most simple offered by travel credit cards both in terms of earning and redeeming. Each dollar spent usually earns you a point, and dollars redeemed typically do so at less than a one-to-one ratio.
Others allow you to cash in those points, crediting you money back for travel-related purchases. Such cards have a number of advantages. Because they focus on monetary amounts, they do not require you to worry about availability when making reservations. You simply complete your transaction and receive part of your purchase back. (Experian states that it is typically 1 cent per point.)
Still, more travel credit cards let you transfer points over to reward programs run my travel-related third parties (Hilton Honors, Delta Skymiles). These kinds of arrangements can get tricky since you are essentially dealing with two programs rather than one. Additionally, you may not always find that you are getting the best value with these programs.
When considering a travel credit card, reward program simplicity is always better. Decide first what you value the most in terms of rewards. Then, select a card whose program will get you what you want in a matter that you can clearly comprehend. Also, know that some cards may combine various aspects of the above options.
Finally, know that you might not qualify for the exact card you want. Because travel credit cards typically offer perks, they also usually require applicants to have pretty healthy credit histories. “How healthy?” you may ask. Well, it is notoriously difficult to get credit card issuers to provide specifics about what kind of borrowers they will approve. But a 2019 study by the Bureau of Consumer Protection, which is an official agency of the U.S. government, showed that credit card applicants with FICO scores of 720 and higher received approvals about 80% of the time. Those whose scores ranged from 660 to 719 had approval rates of roughly 60%. Below that, acceptances sunk precipitously.
Great Travel Credit Cards for Beginners
Following you will find a list of travel credit cards for people who are just getting started and do not want complicated reward programs. Note a few things in the following summaries. While we provide credit scores for approval, they are rough estimates, and interest rates are always subject to change, so read each card’s terms and conditions to verify the following information before applying.
Chase Sapphire Preferred
A perennial favorite, this Chase card has a simple points reward system, lots to spend them on and a reasonable annual fee. You need a credit score of 670 and up. You can receive 60,000 bonus points if you spend $4,000 during the first three months of card ownership, earn double points on dining and travel purchases and receive 25% extra point value when redeeming for travel-related items. There is an annual fee of $95.
Wells Fargo Propel American Express
TheWells Fargo Propel card is a somewhat scaled down travel card, but it offers a lot of benefits for first-time appliers. It requires a lower credit score, has no annual fees, and allow for direct, simple point redemptions through the Wells Fargo Go Far Rewards portal. You can earn three times points for activities like ridesharing, gas, flights, hotels, car rentals and streaming services. In order to a credit score of 650 and up, and there is no annual fee.
This Citi card offers similar value to the Chase Sapphire Preferred and partners with numerous international airlines. However, take note that the only U.S. airline partner is JetBlue and you need a credit score of 740 and up. You’re able to receive 60,000 bonus points if you spend $4,000 during the first three months of card ownership. Earn three times points at hotels, gas stations, restaurants, supermarkets, cruises, rail travel, taxis, and more. You can also receive a $100 annual hotel savings benefit when booking a single hotel stay of $500 or more and transfer points to Jet Blue, Virgin Atlantic and Singapore Airlines.
Capital One Venture Rewards
This is a great card for international travelers that does not feature any foreign transaction fees and offers travel accident insurance and automatic extended warranties for eligible items, and automatic auto rental insurance. More than a score of flight and hotel travel partners allow you to transfer points. You need a credit score of 720 and up and you can earn 50,000 points once you spend $3,000 on purchases within the first three months of ownership.
One final tip: When picking a card, prioritize your goals over big point-related promotional offers. A card you can easily get, use, and redeem will take you far — perhaps even all over the world!