4 ways travel credit cards can really save you big on your next vacation


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A travel credit card is a generic term that applies to a type of credit card that offers travel rewards. There are many different kinds of travel credit cards, and each one may offer a different array of rewards, benefits, and perks. Some travel credit cards might earn airline miles, while others offer hotel points.

Finding the right travel credit card for you will depend on your own specific spending and travel patterns.

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Different Types of Travel Credit Cards

There are three main types of travel credit cards: airline cards, hotel cards, and cards that earn generic travel points.

Airline Travel Credit Cards

Many airlines offer one or more airline travel credit cards that earn credit card miles that you can use to fly with that specific airline. With each purchase, you can get that much closer to your next flight. Additionally, many airline travel credit cards offer perks like free checked bags, a way to earn elite status, or discounts on inflight purchases.

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Hotel Travel Credit Cards

Another type of travel credit cards are hotel credit cards issued by major hotel chains including Hilton, Hyatt, and Marriott. Similar to their airline counterparts, hotel travel credit cards let you earn hotel points with each purchase that you can then use to stay with their chain. Many hotel travel credit cards also offer hotel-specific perks, like elite status, increased earnings from stays, or an annual free night certificate.

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Bank Travel Credit Cards

If you like traveling but don’t want to tie yourself to a specific airline or hotel chain, you can consider a more generic travel card. Some banks, including American Express, Chase, and Citi, offer travel credit cards that earn their own proprietary credit card points. You can then use these bank points for many different forms of travel.

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4 Benefits of Travel Credit Cards

There are a number of advantages to having a travel credit card. Here’s a closer look at these upsides.

Qualify For Significant Welcome Bonuses

Many travel credit cards offer welcome bonuses when you’re approved for the card and meet certain minimum spending criteria. For example, you might earn 60,000 airline miles after spending $2,000 on your card in the first three months.

These welcome bonuses can be worth hundreds if not thousands of dollars, and they can be a great way to boost your travel budget. That’s why it’s important to understand how a credit card works when you sign up and what requirements there are to make the most out of your card.

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Earn Airline Miles and Hotel Points

If you love to travel, you’re likely to be excited about the possibility of earning airline miles or hotel points with each purchase. The miles and points that you earn while using your travel credit card can help fund your next vacation trip.

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Get Insurance Benefits

Some travel credit cards offer different types of insurance that you might find valuable if you’re a frequent traveler. Some credit card travel insurance protects you if you are delayed or an airline loses your baggage. Other credit card insurance might cover you while renting a car, allowing you to decline the rental car company’s high-priced insurance offerings.

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Enjoy Other Perks and Card Benefits

Perks like elite status, free checked bags, or an annual free night certificate are other potential benefits of having a travel credit card. If you’re traveling outside the country, you might also consider an international credit card that you can use while abroad.

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3 Disadvantages of Travel Credit Cards

While travel credit cards can come with many benefits, there are also some disadvantages you’ll want to keep in mind.

Limitations in Travel Choices

If you have an airline or hotel credit card, you will likely only earn airline miles or hotel points with that specific airline or hotel chain. This can limit where you can use your travel rewards. As one example, if you have a Delta Air Lines credit card, you won’t be able to use your miles if you want to fly United or Southwest.

Not as Flexible as Cash-Back Rewards

Earning airline miles and hotel points can seem fun and exciting, but it may not be the best way to maximize your earnings. You’ll want to carefully consider the benefits of credit card miles vs. cash back to decide which type of reward makes the most sense for you. You may find that you’re better off with a cashback credit card like the SoFi credit card.

Potential for Annual Fees

Some (but not all) travel credit cards come with annual fees. These annual fees may be waived for the first year as an incentive for you to sign up, but you’ll be on the hook to pay the fee each year you continue to have the card.

While it is possible to get more value from your travel credit card than the amount of the annual fee, you’ll want to make sure that’s the case for your situation. Otherwise, you’ll want to focus your search on no annual fee credit cards.

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Are Travel Credit Cards Worth It?

Whether a travel credit card is worth it will depend quite a bit on your own specific financial and travel situation. There’s no denying that there are many people who have used travel credit cards to great effect, traveling around the world at a discounted rate thanks to miles and points. Others have signed up for travel cards and continue to pay annual fees, even though they aren’t traveling as often.

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Alternatives to Travel Credit Cards

You do have other options you might think about if you’re not interested in a travel credit card.

If you’re intrigued by earning rewards with a specific brand but don’t travel often, you might consider a private label credit card. These types of cards can offer benefits at a specific store or retail establishment.

Another option could be a cash-back rewards credit card. This would allow you to earn cash as a reward, which you could use for travel or anything else that suits you.

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The Takeaway

Travel credit cards are a type of credit card that offers rewards, perks, and benefits for frequent travelers. You might earn airline miles, hotel points, or more generic bank points that you can use for a variety of different types of travel. While it is possible to use travel credit cards to rack up airline miles or other travel rewards, you’ll also want to keep an eye on any annual fees that you’re being charged.

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This article originally appeared on SoFi.com and was syndicated by MediaFeed.org.

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Communication of SoFi Wealth LLC an SEC Registered Investment Adviser. Information about SoFi Wealth’s advisory operations, services, and fees is set forth in SoFi Wealth’s current Form ADV Part 2 (Brochure), a copy of which is available upon request and at www.adviserinfo.sec.gov. Liz Young is a Registered Representative of SoFi Securities and Investment Advisor Representative of SoFi Wealth. Her ADV 2B is available at www.sofi.com/legal/adv.

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