Pretty much everyone has heard about people who claim that they pay for all of their air travel each year with the magic of travel rewards credit cards. Certainly, business owners will tout the power of the business credit card when it comes to accumulating mileage points and travel perks.

However, for most of us, the thought of having to charge all of our daily expenses to a credit card just to earn points for travel can cause discomfort. The answer to whether or not a credit card that gives you access to airline miles and other travel perks is right for you is not as straightforward as you might think. There are pros and cons to using the benefits of these cards, which we will discuss further.

What is a Travel Credit Card?

Essentially, a travel credit card is a credit card that offers you travel-based rewards rather than cash-back or discounts at your favorite retailers. You will typically earn mileage credits or voucher credits with a specific airline when you have one of these cards in your arsenal of payment options. Most people pick a specific airline that they tend to fly with the most and focus on using these cards to help them gather travel points and miles toward future trips and vacations.

There are other cards that offer more general travel perks, which might be things like hotel elite status or priority boarding. It is always essential that you read the fine print of each card that you are considering taking out so that you know for sure what you will get from using it. Not all travel cards are created equal, and high-interest rates or other travel limitations might make specific cards a poor fit for your specific needs.

Annual Fees

Travel cards almost always have an annual fee, which you need to keep in mind when you apply to use their benefits. If the travel perks that you are getting are offsetting the cost of having a membership each year, then the annual fee is no obstacle to your use of the card. However, if the fee is higher than the amount of return that you are getting for having taken it out, it might be time to cancel this particular card.

Hilton Honors and some American Express cards do not have annual fees, and these cards might be a better fit for casual travelers.

What Benefits Can Travel Cards Offer?

As mentioned earlier in this article, travel miles are one of the common perks offered by travel credit cards. You might also be credited things like free hotel nights or points towards room upgrades. In some cases, you will be given an added ticket fare to use once a year at a discounted price as well.

Some travel cards also give you benefits like reduced costs for rental cars, dining, and even luggage storage while you are away from home. Another common perk associated with travel cards is access to travel insurance, which can help you protect your investment on vacation or replace lost or stolen items while you are away from home.

Typically, these perks add up to a value far in excess of the rewards features of basic credit cards. You will usually only be able to use the benefits of your travel card with specific business entities, which can be a detraction, but you will be likely to get far more benefits from these cards than what can be offered by simple cash-back rewards cards.

Some Things to Keep in Mind

As with anything that sounds almost too good to be true, there are definitely detractions to the use of travel credit cards. Being aware of these pitfalls can help you to be a wise consumer when it comes to taking them out and using them to try and accrue travel perks. Some of the common downsides of travel credit cards are:

·        High Annual Fees

Some travel cards can charge an annual fee that is hundreds of dollars. You need to be sure that you know what the annual fee is before you take out any of these kinds of cards. Also, consider that having more than one of them in your wallet might really add up at renewal time each year.

·        Blackout Dates

Most travel cards will limit the times of year and the places you can use points. While you might still be able to work around these limitations, they can negatively impact your ability to benefit from the use of your card.

·        High Interest Rates

Just like with any credit card, you need to know what the interest rate will be on purchases that you make with your card. Sometimes, the interest rate is quite high on these card types, making it a bad idea to use the card as much as you might like to. Remember that your goal is to travel more, not accrue debt that keeps you from being able to travel just because you were trying to use airline miles later in the year.

Travel Credit Cards Can be Beneficial When Used Correctly

Travel credit cards can help you to plan vacations that you never thought you’d be able to afford to go on. You do need to keep in mind that there are downsides to the use of these cards, and you need to be sure that you will be able to use the travel perks that you are earning by running a balance on a card or using it to charge all of your expenses each month.

Credit cards can give back great benefits, but they must always be used with caution. The more you know about the card that you are considering applying for, the better off you will be when it comes to leveraging its perks for your travel needs.

We can offer you lots of advice related to travel tips and tricks that will make your travel days easier than ever! Check out our travel item hacks here. Headed to Oregon for a vacation? Check out this guide to the coolest tiny towns that you need to see during your visit!



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