How to Shop for Travel, Airline & Hotel Credit Cards

A Huge Sign-Up Bonus

Credit card issuers offer sign-up bonuses to lure in new customers. In fact, travel rewards credit cards usually offer some of the best sign-up bonuses in the industry. These sign-up bonuses can jump-start your mileage, getting you closer to a free flight or even hotel stay. Many credit cards will offer bonus points when you sign up. The earning and requirements for sign-up bonuses vary from one credit card company to the other. Always look for a travel reward card that offers a high sign-up bonus.

What You Can Do

To get a huge bonus, you will need to make a purchase or meet the minimum spending limit during a specified period of time. Normally, a regular travel credit card bonus ranges from 25,000 to 50,000 points. However, some can even go as high as 100,000. The higher the annual fee, the higher the bonus should be.

Points Per Dollar

With most reward programs, you can earn points for every dollar you spend. You can also earn bonus miles for spending in a specific category. Point-based rewards usually offer various ways to redeem points. Not all travel reward cards have the best redemption values. However, good travel reward cards should earn well for your usual spending and have value redemption you can actually make use of. Generally, one point equals one cent. However, for some credit card issuers, the value of your points will be determined by your choice of redemption, for instance, cash backs, travel, gift cards, or merchandise.

What You Can Do

Travel reward cards redeem points at a rate of one cent per point. However, some credit card issuers offer better redemption value. The credit card issuer should explain the number of points you can earn when making certain purchases as well as the redemption charges. There are numerous ways that you can use to earn extra points, like getting the right travel reward cards.

Low Spending Minimum

Every travel credit card has a sign-up bonus, which requires you to meet the minimum spending requirement. If you are applying for just one travel credit card, your usual spending will be enough. However, you can sometimes be approved for multiple travel credit cards; in this case, you will be worried about being able to fulfill the thousands of dollars in minimum spending required to get the bonuses.

Travel credit cards that have a huge welcome bonus usually need a huge amount in spending in a specified timeframe to get the bonus. However, don’t just spend money buying things you don’t need in order to get points.

What You Can Do

Carefully make plans to meet the minimum spending requirements on your travel credit card. Always optimize your spending and plan your expenses to increase your rewards. To meet your minimum spending requirements, select some everyday expenses that you can change on your credit card. It is also good to start small with the credit cards to avoid having many travel cards that you cannot afford to pay the minimum spends. The best travel credit cards are the ones that need you to make just one purchase to unlock a bonus. Only spend what you usually do.

Annual Fees

An annual fee is what you will have to pay every year to remain a cardholder and enjoy the credit card’s benefits and rewards. The travel rewards cards with the biggest sign-up bonuses normally charge an annual fee. Many people get excited to sign-up for reward credit cards, only to change their minds after they see the annual fee.

Some people don’t want to pay the annual fee for the pleasure of having a rewards card. On the other hand, some reward lovers don’t mind paying the annual fee. Most annual fees range from $59 to $95, but some premium reward cards can charge an annual fee as high as $450 or even more.

What You Can Do

Paying an annual fee is worth it only if you are getting more than you are paying. A card with an annual fee can be of more value than a no-fee credit card. During the first year, most credit card issuers charge an annual fee on the last day of the month when you are approved, however, some might charge as soon as the account is opened. If you are a person that flies a lot and travel a lot, an annual fee can be worth it. Credit card issuers can waive the annual fee if it is the first year. You can call them and see if they can waive the annual fee.

Ongoing Interest Rate

An ongoing interest, also known as APR, is an annualized demonstration of your interest rate. You should consider the ongoing interest seriously when applying for any type of credit card. That way, you can compare how expensive a contract may be. You can get a good credit card with a good APR if you have good credit. Some credit cards have an ongoing interest rate that ranges from 13% to 23%. This will also be determined by the type of credit card you have and your creditworthiness. Some reward cards tend to have a high APR. Reward cards can be very attractive; however, they might not be right for you, especially when you carry a balance every month since the interest can whittle away at the bonuses.

What You Can Do

An APR may not be significant if you pay for your travel cards in full every month. However, if you carry a balance from one month to another, your APR should be a point of concern. Try looking for travel cards that have a low ongoing interest rate to reduce your debt. Choose a travel credit card that has an introductory interest – free period of more than 12 months. You can talk to your credit card issuer to lower your APR or take some steps to help you apply for a lower APR. Shop around for travel credit cards with a lower ongoing interest rate.

Currency Conversion and Foreign Transaction Fees

There is a lot of planning that is involved when you travel abroad, and you will be booking air tickets, hotels while figuring out what locations to visit. What you might not be calculating is the cost you will incur to make those purchases in a foreign country using your credit card. Travel credit cards are great to use when you are overseas since you can get the best exchange rate from them. A foreign transaction fee is what your credit card issuers charge when your card passes through a foreign bank. Foreign transaction fee usually applies to travel card purchases that have been made in a foreign country. Foreign transaction fees are usually 3% of every transaction in US dollars.

Currency conversion rates are the impacts of a Dynamic Currency Conversion and are normally charged by a foreign merchant to convert transactions to U.S dollars. The merchant should contact you before using DCC. If you agree, they will apply the conversion rate, if you object, your credit card issuer will do the conversion, and the fee will show up on your statement as a separate charge in dollars. This fee also applies to purchases made online from a foreign retailer.

What You Can Do

To avoid incurring both the currency conversion fee and foreign transaction fees, try to look for a credit card that has no foreign transaction fee and say to Dynamic Currency Conversion. When making purchases abroad, it is always best to inquire that you pay for the purchases using your local currency because the exchange rate provided by your credit card issuer is better and you won’t incur any Dynamic Currency Conversion fee.

Rewards Categories

There are different ways of generating rewards; however, the most common and consistent way is by spending on your credit card to earn points, miles, or cash back. Travel is a common category for credit card issuers because people who travel frequently spend money while traveling and are perfect customers for banks. Travel reward credit cards offer rewards that can be redeemed for travel while some cards can offer points that can be redeemed on non-travel merchandise and services. Miles and points from different credit card issuers differ in value, and sometimes the difference can be substantial.

What You Can Do

Credit card companies have their rules on what may or may not count towards bonus spending. Make sure to read the fine print of the travel credit card before signing up for one. You can also call customers service and inquire about their terms and conditions in the bonus category section. Go through the fine print and analyze your reward redemption options.

Redemption Flexibility

Travel credit cards can be a great way to earn free trips. However, most of them come with complicated restrictions on how you can earn and redeem your rewards. Reward redemption options can vary from one credit card issuer to the other. Some credit cards make it easier to redeem miles for a specific hotel or even airline. Others might come with restrictions like blackout dates and limited redemption options.

What You Can Do

Credit card rewards give you numerous ways to save money on everyday items as well as ticket-purchases. Redemption flexibility allows you to redeem your rewards through ways like applying for travel, donating to charity, buying gift cards, and paying for purchases with points and rewards. However, the best way to redeem your rewards is for cash or statement credit. Choose a travel credit card that allows you to transfer your points and permits you to redeem for statement credits. Statement credit can be used to pay your bills or even to pay down debt.

Acceptance

Some purchases are difficult to make using a debit card, especially when you are traveling to a foreign country. Merchants don’t accept debit cards even if it is from a well-known bank. Some credit cards are accepted in many places than others. The major credit cards popular in the U.S. are MasterCard and Visa.

What You Can Do

A credit card that is not accepted anywhere is bad news for frequent travelers. When choosing a travel credit card. Choose one that is accepted globally. Before planning your next destination, make sure to do your research. Also, just in case, have some secondary form of payment on hand (for instance, cash).

Extras

It has been several years now since you started gathering credit card reward points, and you have ended up saving up hundreds of thousands in the form of points. What options do you have in redeeming them? Hanging on the reward points isn’t a good idea since they can be less valuable over time. Points can also lose value when your credit card issuer makes negative changes to the reward programs.

What You Can Do

It is always important to consider your spending habits to find a reward card that suits you best. Choose the right card for every purchase you make to earn more points. For instance, when at a grocery store, use the card that rewards grocery purchases the most. The same goes when making purchases in a mall or restaurant and at gas stations.