Hi. I just found this subreddit, and read the 'read before posting.' I see in the resources the credit card basics posts, but I was wondering if someone could give a basic run down (similar to the credit card basics posts) on how specifically travel cards work. I've been looking at the Chase Sapphire Preferred and the Capital One Venture X, but when I read about them there are things I don't understand/intimidate me.
CCs specifically to make travel more affordable, basics
byu/Roge_Cap_4819 inCreditCards
Posted by Roge_Cap_4819
2 Comments
You earn bonus points/miles on travel-related purchases. You get the best rewards rate through the credit card company’s travel portal, but you can book elsewhere and still earn lots of rewards. You can then redeem for a statement credit to cover part of your bill, or you can book new travel with your points/miles. Hopefully this helps a bit. You can also read guides/breakdowns on sites like WalletHub. That helped me.
When people talk about a “travel card,” they may be referring to one of several things. I will list the major qualities here, in order from simplest to most complex:
1) Cards with no Foreign Transaction Fee (FTF). At the most basic level, if you are traveling internationally, you want a card that doesn’t charge extra fees on foreign purchases.
2) Cards that earn rewards on travel categories. For example, a card might earn 3% cashback/3x points (more on that distinction later) on all flight purchases with airlines. Other common categories that travel cards often feature are hotels, rental cars, local transit, and dining. Some may also have a broader “Travel” category that includes some subset of the above.
3) Cards that offer travel-related perks and/or protections. For example, a common travel protection is Trip Delay Insurance, in which the credit card network will reimburse you for costs incurred if your flight is delayed more than a certain amount (such as the cost of an unexpected overnight hotel room). Another common perk on some of the higher-AF cards is airport lounge access, which is typically either Priority Pass, an Airline’s lounges, the issuer’s own network of lounges, or some combination of the above.
4) Cards that allow you to transfer miles to partners and book award travel. In #2, I mentioned that some cards earn cashback, and some earn points. Points earning cards can be further divided into two categories: those that earn a rewards currency directly (such as a card for an individual airline), and cards that earn transferrable points that can be converted to the rewards currency of several partners. Savvy travelers may learn what airlines/partners offer award bookings that are valuable for their own travel habits, and prioritize earning reward currencies that allow them to make those award bookings.
If you are looking at getting a travel card, I would start from #1 and decide which of these qualities are important to you, the look for a card that meets them.