Whether you’re someone who leaves the country multiple times a year or takes just a few trips per year, a travel rewards credit card could be a useful thing to have in your wallet.
Many travel reward credit cards offer money-saving perks that make flying less expensive, like free checked bags and discounts on in-flight purchases. These cards are also known to offer extra points or miles on travel purchases, which may extend to restaurants and dining.
But if you’re going to apply for a travel rewards credit card, then it’s important to find the best fit. Here’s how to do that.
1. Make sure the welcome offer is attainable
Many credit cards come with a sign-up bonus that can put a whole lot of points or miles in your pocket. But before you choose a new credit card based on its welcome offer, make sure that offer is one you’re likely to capitalize on easily.
The spending threshold for claiming a sign-up bonus can vary from one card to the next. In some cases, you might have to spend only $500 or $1,000. In other cases, the spending requirement could be a lot higher.
There’s also the time frame to consider. Some credit cards give you three months to meet your spending requirement for the welcome offer, while others give you four months or more.
Either way, make sure the offer you’re chasing is one you can attain without driving yourself into debt. It’s probably not worth getting a sign-up bonus worth $300 if you’re then forced to carry a $3,000 balance forward for a long time, all the while racking up costly interest and potentially harming your credit score, too.
2. Figure out how important lounge access is
Some travel reward credit cards offer airport lounge access as an included perk. This might seem like a fantastic benefit. But one thing you should realize is that many of the credit cards that offer lounge access come with a hefty annual fee. So if you only tend to fly once or twice a year, it may not be worth paying for.
Remember, too, that you generally have the option to buy lounge access the day of your flight. And the cost for a day pass might be cheaper than the annual fee for your travel card.
3. Make certain you’ll recoup your fee
It’s not a given that your travel rewards credit card will charge an annual fee. But for many of these cards, that is the standard practice because of the higher level of rewards they tend to offer.
Paying an annual fee for a credit card — travel or otherwise — isn’t always a bad idea. Sometimes, you’re able to more than recoup it in the form of statement credits for various purchases and cash back. But before you apply for a new card, run the numbers to make sure you’re likely to make back your fee one way or another.
Remember, too, that annual credit card fees can run the gamut from a $95 charge to hundreds of dollars. A $295 annual fee could be worth paying if it allows you to rack up $1,000 in cash back more easily than another card, or if it comes with $400 worth of statement credits for services you use, like hotel stays and ride-hailing. But make sure you’re getting your money’s worth.
A travel rewards credit card could be a great thing to have in your wallet, even if you don’t travel every week or month. Use these tips to find a card that’s likely to serve you well.
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