Choosing a Travel Rewards Credit Card

Every year we review our travel rewards cards and reevaluate them based on upcoming travel preferences, our travel habits, and the choice of newly available credit cards. In doing so, we have learned a lot.

Here are our tips on what to look for and how to evaluate the travel rewards credit card benefits and features that match your needs.

(We do not have affiliate links to any of the credit cards mentioned, we’re only sharing this for informational purposes.)

Over the years we have had our share of travel rewards cards. More and more this has become a very competitive arena where banks and loyalty programs try to entice you to use their product with sign-up bonuses and various perks and benefits.

Sometimes these cards have time-limited offers. If you are like us, you probably receive at least a few of these offers in the mail every month.

Just as an aside, there are numerous articles listing strategies on getting approved or the restrictions on approvals by the various banks. So, I won’t go into all of these, but rather concentrate on the benefits of the card and what we found was important to us. This is sometimes hidden in the fine print but when you need it, it may make a big difference to you.

Brand Specific vs. Independent Redemption

When we were living in Canada, we enjoyed the RBC Avion card for many years. What we liked in particular was that you could reserve flights using a point-based redemption schedule on any airline up to a fixed maximum ticket price.

They also offered an online tool, which was easy to use and offered the same routes and the same prices we would see directly with the airlines. You could basically shop around for the route and the airline you wanted and then use the point’s table to purchase the ticket. Example, for 100,000 points you could get a ticket to Asia with a maximum ticket price of $2,000 regardless of class of travel.

Benefits of a multi-airline redemption schedule type credit card:

• Not only can you use any airline or any combination of airlines, but you can also select the route and the timing that is convenient to you as long as you fit within the maximum price of the ticket. In some cases, you have a straight points vs. dollars conversion. Usually 100 points for $1, but premium cards may offer a rate of $1.50 on travel for 100 points.
• Since you are buying the ticket, you will also be able to collect points and qualifying miles from the airline as it is treated like a revenue ticket. We love double dipping.
• With redemption tables, if you decided to opt for economy plus, you could potentially pay the difference over the maximum allowable price. For example, if your allowable max price is $2,000, and economy is $1,300 but economy plus is $2,100, you can get an upgrade to economy plus for only $100 out-of-pocket cost.
• You can even transfer your points to any airline although this would typically be at a 1:1 basis. This could be interesting if you wanted to book business class on points rather than dollars or already had some points banked with an airline or hotel and wanted to top-up. There are also occasional bonus periods offering better exchange rates.

Here in the US, we have enjoyed some brand specific cards such as AAdvantage cards and the Chase Marriott card. These cards offer rewards that are brand specific and any mileage or points you get are only available for the primary brand. Transferring is sometimes possible, but a different process. Even if these perks are good, you want to make sure you can benefit from them. Example, if you live near a Delta hub, you may find that flying American or United is more difficult to arrange!

Benefits of a brand specific travel rewards credit card:

• You get to collect miles directly in your preferred program on all purchases.
• Perks such as elite qualifying miles for elite status on AA and qualifying nights for elite status with Marriott may be based on spend.
• Particularly useful for those trying to reach the next tier of qualification in the AAdvantage or Marriott loyalty programs.

Free vs. Paid vs. Premium

When looking at cards, you generally find three tiers of travel cards here in the US: the free ones, the ones that are approximately $100/year, and the premium ones that are $300-500/year or more. At first glance, a yearly fee of over $300 seems exorbitant and certainly if you cannot benefit from the perks and offerings of the card you should rightfully question this cost. Having said that, for frequent travelers these perks may actually add up enough to save you money in the long run.

Things to look for when evaluating the yearly cost of a travel credit card:

• The bonus points on sign-up (keep an eye out, there are often special periods with up to double the sign-up points). Add these up and see what they are really worth. 50,000 points for a 1:1 airline conversion is worth $500.

• What credits are offered and can you use them? If you are sure to use these, you can basically deduct them from the yearly cost and see if it is worth the extra cost from a basic card.
  • A cash travel credit
  • Uber or Lyft credits (useful if you’re using this service)
  • TSA pre-payment (keep in mind this is good for 5 years so you’ll only need this once in a while)
  • Various program status tiers or privileges and discounts (example, gold status on a rental cars, discounts on a hotel chain, etc.)
  • Lounge access
  • Travel insurance
  • Health insurance and evacuation
  • Roadside assistance
  • No foreign transaction fees
  • Extended warranties and purchase protection

Let’s look a little more closely at the fine print in some of the standard perks offered by the travel rewards credit cards.

Point Accumulation, Redemption, and Transfer

• Look at what the points are and what they are actually worth and what you can do with them. Are travel points based on a redemption schedule (such as Europe for 50,000 points) or are they strictly a point to dollar swap. Check out these tables and amounts carefully to compare how much spend you need for each dollar you can redeem.
• Consider your yearly spend on the card to consider this benefit. 1 point per dollar is standard (so every $100 you spend you get $1 worth of travel). Some cards give additional perks too. For example, with the Chase Sapphire Reserve you can redeem your travel points at a value 1.5 cents each for a travel related purchase.
• What about collecting points; there are often special merchant categories. You may get 5 points to the dollar for travel, or perhaps 3 points for gas, restaurants, or groceries. Look to see how this compares with your usual spend.
• In terms of transfers, look to see which partners participate in the program. Can you transfer points to your favorite hotel or airline if you would prefer to do so? Can you book with any carrier? We like the double dipping method where you buy a flight through your credit card points (which allows you to collect points on the airline).
• Can you make reservations online or must you contact a call center and pay a booking fee?

You may like: Travel Tip: Are You Leaving Points on the Table?

Lounge Access

Not all lounges are created equal. Many travel credit cards offer a standard Priority Pass membership. But keep in mind that this type of membership costs $99 per year and requires you to pay $35 to enter the lounge. This may not really be much of a perk unless you have a long layover connection.

Priority Pass Select (that you get with a premium travel credit card) on the other hand, is a free access card and can be used in over 1,500 Priority Pass lounges and gives you a credit (this benefit is going away starting July 1st, 2024) at Priority Pass restaurants. Do use their lookup service to see if lounges are available at your frequent travel hubs. However, in some cases access times may also be restricted and you may be denied entry at high traffic times, or only allowed in for a fixed amount of time before your flight.

Chase Sapphire has also started making their own lounges and we’ve visited some. The one in LGA – LaGuardia Airport was great, see our review here.

Admirals Club is the AA lounge and if you travel American a lot, it’s the one you will find most convenient.

Consider how often you travel and if your common routes actually have the appropriate lounge before attributing too much value to this benefit.

Car Insurance

When your travel card offers rental car insurance, one thing to look for is whether or not the insurance coverage for liability is a primary insurance or a secondary one. With secondary insurance, you still have to make a claim with your primary auto insurance, and this can affect your premiums going forward. With primary insurance, you deal only with the credit card if something happens while renting a car.

Look also for the maximum amount of coverage; if you total the nice convertible that they gave you with your upgrade, and you only have $30K in coverage, you may have a big problem. Premium cards go as high as $75K coverage or more.

Some travel rewards credit cards even offer roadside assistance, rendering paying for coverage with another agency obsolete.

You may like: Always Check Your Rental Car Before Driving Off

Trip Cancellation and Interruption

Look for the amounts of coverage here and compare these with your typical trips. In some cases, there is a maximum per trip and/or per passenger and even a yearly maximum. Also, important to know should you file a claim and then assume you are covered for subsequent trips when you really are not.

Trip coverage can range from $1,000 to $10,000 per person or more so again, consider the types of trips you take. With a large enough sum here you can avoid the cost of additional insurance which could cost as much as $250 for each $5,000 on each trip. This is a good coverage to have, but often you must have used the specific credit card to pay for your trip (or at least part of it) to get coverage.

See our article on insurance: 6 Types of Travel Insurance for Peace of Mind on Your Next Trip

Trip Delay Coverage

Look carefully at what is covered and what constitutes a delay. In some cases, it’s a 24-hour delay, in other cases 3 or 6 hours. If you are connecting and miss your connection, you may not be covered if the delay was only a couple of hours. But this can make all the difference if you are going to join a cruise or trying to get to a remote destination with multiple hops (and limited flights).

Again, for these benefits to kick in, you must have used the credit card with the trip delay insurance to pay for some or all of your trip. Read the fine print in your card holder agreement.

Medical and Emergency Evacuation

Some of the premium cards also offer this coverage, and when you are sick on the other side of the world you would certainly appreciate having it. In fact, this may be one of the primary reasons for taking 3^rd party travel insurance when traveling.

If you can select a card with this, you can avoid the cost of additional insurance and it will definitely make up for a premium yearly fee. Just make sure that you pay for part of your trip with this credit card! Also be sure to look for coverage amounts, an air ambulance can easily get into the 10s of thousands of dollars so you want to make sure it’s a reasonable amount. Some remote tours even insist on a minimum of $250K evacuation before they will take you into remote areas.

Other Benefits

Some other benefits you may find interesting are things like extended warranties, purchase protection and return protection. These automatically extend purchase warranties beyond the standard amounts. Are you one that buys extended warranties? Well, this perk can save you those costs and extend your warranty automatically if you use the card for purchasing the item.

Our Travel Credit Card Choice

More and more we have opted to be flexible with our travel arrangements seeking out the fastest and most direct airline routes as well as choosing hotels that are closest to the attractions. While we used to go out of our way to remain loyal to a select few brands, the programs themselves seem to have deteriorated and points have gotten devalued. We made a conscious decision to say no more! For that reason we have now opted to go back to a generic travel rewards credit card that offers redemption on all airlines.

We opted for the Premium Chase Sapphire Reserve card. We have kept our Marriott card for Marriott stays, and Hyatt card for Hyatt stays, but we use the Sapphire Reserve card as our  primary go-to travel card.  It has the best insurance and the best points redemption too.

I also added to my wallet the Chase Sapphire Preferred card. This was due to a lucrative 100 000 bonus point sign up offer with the Preferred card after spending $4,000 in the first 3 months. That bonus was worth $1,250 for travel at a redemption rate of 100 points for $1.25 in travel through the Chase Ultimate Rewards portal.

In addition, both cards’ points can be combined to buy travel (flights hotels, car rentals, cruises, excursions) through the portal. And on top of that, my husband and I were able to pool our points together to secure business class seats to Bali. What a treat!