Perhaps you already have a credit card, such as a retail card or one that offers cash back. You may have even heard of travel cards, such as those offering airport lounge access or hotel stay points, and now your curiosity has peaked.

For someone trying to enter the world of travel cards for the first time, the sheer amount of alternatives may seem bewildering. Let’s examine what travel credit cards are, how they function, and the best ones for beginners.

Travel Credit Card In A Nutshell

There are numerous types of credit cards, including cash-back credit cards, cards with no incentives, shop credit cards (such as a Target-branded card), and travel credit cards.

The subset of credit cards for travel can be divided into three typical categories:

• Hotel credit cards
• Airline credit cards
• Flexible currency credit cards (also called general travel rewards cards)

Typically, hotel credit cards allow you to earn points toward a particular hotel brand, such as Hilton or Marriott. Similarly, airline cards enable you to earn miles for specific carriers, such as United and Delta.

The issuers of flexible point currency cards, however, are limited. American Express and Chase are two widespread examples. They earn points that may be transferred and redeemed through partnerships with other businesses and loyalty programs, such as those of various hotels and airlines. This makes them considerably more versatile than other point currencies, hence the term flexible point currencies. Conditions apply.

Numerous travel credit cards come with a sign-up bonus that rewards you with a lump sum of points after spending a certain amount on the card during a certain time period. As with other credit cards, you will continue to earn points by using your credit card to make transactions.

There are various levels of credit cards. While some credit cards do not levy an annual fee, a number of cards impose a cost simply for having the card in your wallet. These costs often vary from $95 to over $550 each year. Understanding the value of the bundled perks and performing some fast math can often help you determine whether a particular card’s annual fee is justified.

Travel Credit Cards VS Other Credit Cards

Different credit cards provide varying types of perks. Some credit cards may help cardholders establish credit, while others may offer cash back for spending on specified “purchase categories,” such as dining out.

There are travel-friendly cash-back credit cards, but many credit cards for travel reward spenders differently. Rewards are awarded in the form of points or miles, which can be redeemed for travel. Note that many travel credit cards offer additional benefits, such as hotel elite status, access to airport lounges, and even an annual travel credit.

How They Work

When making transactions, you should often utilize your travel credit card in order to earn points or miles. Several credit cards provide bonus points for spending in particular categories or with particular brands.

For instance, the Hilton Honors American Express Surpass® Card awards 12 points for every dollar spent at Hilton. You will also receive 6 points for every dollar spent at U.S. restaurants, grocery stores, and gas stations. If you spend a great deal of money in these categories, it may be simple to accumulate enough points for a Hilton award stay, which begins at 5,000 points per night.

Additionally, the Hilton Honors American Express Surpass® Card provides Gold elite status with Hilton and up to 10 airport lounge visits each year with Priority Pass (enrollment required). These included benefits can be advantageous because they enable you to travel privileges such as complimentary food and beverages in the lounge. The card does, however, come with a $95 annual fee. Conditions apply.

What To Look For In a Travel Credit Card

Meets Your Requirements

Why do you need a credit card for travel? Are you interested in a nearly complimentary hotel stay? Do you wish to accumulate points for a flight to Europe? Are you interested in benefits such as elite status and airport lounge access?

Brand-Specific or Flexible

If you frequently fly with Delta, a Delta credit card may be suitable for you. If you’re a major admirer of Marriott, one of their co-branded credit cards could be a good choice.

If none of these apply and you are not particularly committed to a hotel or airline brand, it may make sense to invest in a card with variable point currency.

The Chase Sapphire Preferred® Card is a great option for beginners. It is presently offering a record-breaking welcome bonus: 60,000 bonus points after spending $4,000 in the first three months following account opening. That’s $750 in travel expenses when you redeem through Chase Ultimate Rewards®.

You can then redeem these points for award travel through the Chase travel site at a rate of 1.25 cents per point, or you can transfer them to one of Chase’s partners, such as United or Hyatt, and redeem them for award travel. This means that if you redeem the aforementioned welcome offer through the Chase travel site, it will be worth at least $1,250 in travel.

Despite the $95 yearly cost, you will receive a $50 anniversary credit towards a hotel reservation booked through the Chase travel site. In addition, you can earn 5 points for every $1 spent on the Chase travel portal and 3 points per $1 spent on restaurants, some streaming services, and online shopping purchases at participating supermarkets.

Overall, this makes it one of the most advantageous travel credit cards for beginners. It is simple to use and makes earning and redeeming points straightforward.

Budget-Friendly

Consider the potential recurring expense of adding a certain travel credit card to your lineup when you compare shops. Since yearly fees (and subsequent card advantages) vary widely, it is your responsibility to be a savvy shopper and pick a card that fits your budget.

It makes sense to hesitate before applying for a premium travel credit card with a steep annual fee if you are a first-time cardholder. Begin with a simpler redemption in order to get experience with points and miles and save the more complex transactions for the future.

Manageable

It would be foolish to obtain a travel credit card without redeeming the points and miles. Consider a simpler option, such as a cash-back credit card, if you are intimidated by the prospect of managing a currency.

The Takeaway

Those who wish to save money when traveling may find travel credit cards a valuable financial tool. They can also help you add premium travel amenities to your trips, such as the opportunity to receive free accommodation upgrades and access to comfortable airport lounges with free meals.

If you want to invest in a travel credit card, you need first to determine your needs. Whether it’s hotel stays or flights, your goals should define the credit card you use. Once you’ve chosen a card, you must charge your regular purchases to it (try to spend wisely by paying attention to your card’s bonus categories) and watch your points accumulate for redemption.