How Points and Miles Credit Cards Can Ease Return to Travel | Company

As the COVID-19 vaccination era makes it safer to travel, many people who stayed at home during pandemic closures are going back on vacation. The number of checkpoints at airports increased by about 20% between January and mid-June 2021 compared to the same time frame in 2020, according to data from the Transportation Security Administration.

Rewards such as points and miles earned with a travel credit card can help you reach a long-awaited dream destination, especially as a new cardholder. Currently, there’s no shortage of generous sign-up offers for those with good credit (a FICO score of 690 or higher), but before accepting one, consider whether a travel credit card matches your spending.

Even for globetrotters, a travel credit card may not be compatible with habits or financial circumstances. Weigh these factors to determine what is right for you.

WHEN A TRAVEL CREDIT CARD IS SICK

Travel credit card options abound. There are general purpose travel credit cards that allow flexible redemptions and co-branded travel credit cards that allow travel with certain hotel brands, airlines or third-party travel websites.

These types of credit cards can be useful if you travel regularly, have no debt and pay the bill in full each month to avoid interest charges. Otherwise, the high interest on these cards will be lost on the value of rewards. By checking these boxes, you can: consider a travel credit card.

Combining a travel card with a travel savings fund can also avoid unwanted budget surprises, such as expenses that aren’t covered by credit card rewards. If you want to go anywhere in six to 12 months, put money aside from each paycheck to avoid debt, says Kelly Luethje, a certified financial planner and founder of the Willow Planning Group in New Hampshire.

You may not have accumulated the points you need to cover an entire trip, so I like a travel fund to top up what you haven’t accumulated on the credit card, she says.

MUST-HAVES FOR A TRAVEL CREDIT CARD

A travel credit card should make traveling easier and cheaper. Depending on where and how often you travel, the features you want may vary.

For Christine Lozada, a California-based creator of the YouTube channel Where In The World is CL, a travel credit card and its benefits were essential to her jet set lifestyle.

She says the access her travel credit card gives to airport lounges is huge to me.

Your priorities may differ, but here are some factors to consider:

Annual fees. Only consider travel credit cards with high annual fees if the card’s benefits can offset the cost. Less frequent travelers can get more value from a credit card with no annual fees.

introductory offers. A sign-up bonus can cover the cost of a vacation, but spending too much to meet the requirements to earn one defeats the purpose. Instead, plan to apply for a travel credit card around a high-spending month or season to meet the bonus requirements for purchases under budget.

Rewards. Look for a rewards percentage of 1.5% or 2% of your spending. Depending on the terms of a card, the value of rewards may increase or decrease with different redemption options. Travel purchases typically get the best value. In some cases, you can maximize the rewards by transferring points to loyalty programs. Lozada has transferred points from her credit card to her hotel loyalty program to get even more value for her points. She used them for a stay in Carlsbad, California.

A wide trading network. With a credit card for travel that belongs to the worldwide accepted Visa or Mastercard networks, you probably have fewer problems abroad.

No foreign transaction costs. For international travelers, a travel credit card that doesn’t charge foreign transaction fees saves money. These fees are typically assessed as a percentage of the amount of each overseas purchase.

Money-saving benefits. Valuable benefits are usually offered on travel cards with annual fees. Airline credit cards can have free checked baggage or priority boarding. Hotel brand credit cards can include a free night and automatic elite status. Some general travel credit cards offer statement credit for: Global Imports or TSA PreCheck application fee, a travel or dinner credit, or airport lounge access. The card with the benefits you are likely to use will give you the best value.

Travel benefits or protections. Travel credit cards can provide cancellation or interruption insurance, lost luggage compensation, rental car insurance, and more. Protections are often subordinate to existing insurance.

Please read the terms and conditions carefully to make the most of your benefits.

This article was provided to The Associated Press by the personal finance website NerdWallet. Melissa Lambarena is a writer at NerdWallet. Email: [email protected]. Twitter: @lissalambarena.

RELATED LINKS:

NerdWallet: Choosing a Travel Credit Card https://bit.ly/nerdwallet-travel-cc

Global Imports: US Customs and Border Protection https://www.cbp.gov/travel/trusted-traveler-programs/global-entry

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