The Best Travel Rewards Credit Cards
As much as we all love to travel, the cost of flights, hotel rooms, restaurants, and attractions are enough to ground even the most avid globetrotter. But with a little help from our own wallets, that Caribbean cruise or cross-country flight can seem much less daunting. Several credit cards offer special discounts on travel, but deciding which one is right for you can be intimidating. Here's the skinny on some of the best travel rewards credit cards.
American Express Gold Card
Although the American Express Gold card doesn't focus exclusively on travel, it is backed by the celebrated American Express travel rewards program. Cardholders earn one point for each dollar spent, and two points for each dollar spent on the American Express Travel website. You can use your points to fly any time (no blackout dates), or you can transfer your rewards to up to 20 different frequent flyer and frequent guest programs. Another Gold Card perk is the no pre-set spending limit. However, you can expect to see a bulky $125 fee tacked on to your bill each year (waived for the first 12 months after activation).
The American Express Gold Card is a great option for people who charge purchases frequently. But if you're looking for a program that's more travel-oriented, you might consider the Starwood Preferred Guest Card or the PenFed Premium Travel Rewards Card instead.
Citi Platinum Select / AAdvantage Visa Signature Card
For those who frequently book flights on American Airlines or its partner carriers, the Citi Platinum Select / AAdvantage Visa Signature card will come in handy. During the first year of card membership, you'll earn two AAdvantage miles for every dollar spent on eligible American Airlines purchases, plus one mile for every dollar spent otherwise. (After 12 months, you'll earn one mile for every dollar.) If you charge $750 within the first four months of activation, you'll receive 30,000 bonus miles, and 10,000 extra miles if you make $5,000 worth of purchases within the first six months of membership. Note that 40,000 miles is more than enough for a free round-trip domestic flight, and there are no blackout dates if you fly American Airlines or one of its regional carriers. You can also redeem your points for MileSAAver awards. This program permits you to use fewer miles (as little as 7,500) on round-trip flights to select destinations. Destinations are subject to change on a quarterly basis.
However, your points may expire if you don't earn rewards on American Airlines purchases or if you fail to redeem them at least once every 18 months. Cardholders will also face an $85 annual charge (waived the first year) and a 15.24 annual percentage rate (APR). For lower fees, consider the Citi Gold / AAdvantage World MasterCard.
Blue Sky Preferred from American Express
Tired of waiting months to rack up enough points to make a rewards program worth your time? American Express came up with a solution: With the Blue Sky Preferred card, 7,500 points earns you a $100 account credit that can be used to lower the out-of-pocket cost of flights, hotels, and more. You can earn two points for every dollar spent at eligible hotels, restaurants, and car rental agencies. And you can accrue one point for every dollar charged on non-eligible purchases, which can be applied toward discounts on airfare, cruise lines, commuter trains, hotels, and travel agencies. Blue Sky Preferred points never expire, and airline blackout dates don't apply. Also, you may be able to cash in on extra savings from companies like Marriott and Hertz, and receive complimentary breakfasts at JW Marriott and Renaissance hotels throughout the world.
However, there are a few things to keep in mind when considering the Blue Sky program. First, you may only redeem your points in increments of 7,500. Those points are received in the form of an account credit after you've made eligible travel purchases with your credit card. Second, the card comes with an annual fee of $75, and a fairly high APR that ranges from 17.24 to 22.24. You can save some dough by opting for the traditional Blue Sky from American Express card. This card does not include an annual fee, but you will have to pay the same high APR, and you'll only earn one point per every dollar spent (even on travel).
Escape by Discover Card
If you're looking for a clear-cut program, consider the Escape by Discover card. Unlike other Discover cards that distribute points based on a tier system, Escape awards two miles for every dollar spent on the card, no matter what you purchase. Plus, for every month you use the card, you'll earn an extra 1,000 bonus miles (this bonus offer is capped at 25,000 miles.) You can cash in your miles for free flights, cruises, hotel stays, and car rentals, which you can book through any airline, travel agent, or online travel site. As an added benefit, you will receive a zero percent APR on both purchases and balance transfers for the first six months after activation, although there is a 10.99 to 15.99 APR that will kick in during month seven. The card comes with a $60 annual fee.
To earn travel rewards without the annual fee, check out the Miles by Discover card instead. The Miles card offers unrestricted travel with your rewards, but you'll only earn one mile per every dollar spent, and your monthly bonus miles will be capped at 12,000 rather than 25,000.
Starwood Preferred Guest by American Express
American Express is known for its extensive rewards programs, and the Starwood Preferred Guest card is no exception. With every dollar spent on this card, you will earn one "Starpoint," plus up to five Starpoints for every dollar you charge at any Starwood Preferred Guest hotel or resort. You can redeem your points for free nights at more than 1,000 participating hotels in 100 countries. Plus, if you use your card to book two nights at any Sheraton hotel or resort involved in the Starwood Preferred Guest program, you'll receive the third night free. You can also use your points to save on flights with more than 350 airlines without having to worry about blackout dates. You'll rack up 10,000 Starpoints with any first purchase, and you can earn an additional 15,000 points -- enough for two free nights at a luxury hotel -- if you spend $5,000 on your card in six months or less.
While this package is generous, you'll discover that good things don't come cheap. There is no charge for the first year of usage, but you can expect a hefty $65 fee tacked on to your bill for each subsequent year that you stick with the program, plus a 15.24 to 19.24 APR. If you're a hotel hopper and would like to earn even more on travel, opt for the Hilton HHonors Surpass card from American Express. This program grants you nine points per every dollar spent at participating Hilton Family hotels, plus free nights and room upgrades. And the Hilton HHonors Surpass card's annual fee is only $10 more a year than the Starwood Preferred Guest card.
There's been a lot of buzz surrounding the Chase Sapphire card, particularly about its travel rewards. For every dollar charged, you'll earn one point that can be applied toward both airfare and hotels, as well as merchandise, gift cards, and even cash. You'll also earn an additional point for each dollar spent on eligible airfare purchases made online, and you'll get 10,000 bonus points if you charge $500 in the first three months of membership. Don't worry about using your points in a timely manner, because there are no earning restrictions or expiration date. Plus, if you book any travel arrangement through the Chase Ultimate Rewards program, you won't have to worry about travel restrictions or blackout dates. When it comes to managing your account and your rewards, Chase makes things easy by providing access to Blueprint, a free service that helps you keep your card in check by tracking your spending and allowing you to set up a payment plan for large purchases. The best part: no annual fee.
If you are a frequent credit card user, you might consider the Chase Sapphire Preferred card. With this program, each dollar you spend on travel (including train tickets and taxis) and dining earns you two points, and you'll need 20 percent fewer points than a regular Chase Sapphire cardholder to make travel plans through the Chase Ultimate Rewards program. You can also collect a 7 percent dividend on all your points (even those you've already redeemed). But expect to pay a fairly high annual fee: $95 after the first year.
Capital One Venture Rewards Credit Card
In 2010, Money magazine named the Capital One Venture card the best program for racking up airline miles. But while this card -- like the others mentioned in this list -- can help you get to where you want to go, the Capital One Venture card is the only one that will take care of you once you arrive. If you're traveling outside the United States, you can use this card without accruing any foreign transaction fees. And because Capital One is a Visa, you can also cash in on extras like travel accident insurance and lost luggage reimbursement. As far as points go, the Capital One Venture card is straightforward: You will earn two miles for every dollar, and if you charge at least $1,000 within the first three months, you'll earn 10,000 bonus travel miles. Points can be applied toward hotel rooms, flights, and even car rentals, and they never expire. Keep in mind that the annual $59 fee is waived during the first year, although you will have an 11.9 to 19.9 variable APR.
To skip the annual fee, consider the Capital One VentureOne card, which offers 1.25 miles per every dollar spent. You'll also be eligible for the 10,000 bonus miles if you spend $1,000 in the first three months. Although you won't be able to use your rewards on hotel rooms, your miles allow you to fly for free without having to worry about blackout dates.
PenFed Premium Travel Rewards American Express Card
When it comes to earning rewards, you can't do better than the PenFed Premium Travel Rewards American Express card. Not only will you earn points to put toward your next vacation, you'll actually earn extra points for traveling. Every flight booked with a PenFed card earns a whopping five points per dollar. And if you charge $650 within the first three months of activation, you'll automatically receive 20,000 bonus points (enough for a round-trip flight to many domestic destinations). Members of the PenFed Premium Travel Rewards program also receive automatic insurance for travel accidents and rental cars, as well as complimentary roadside assistance if they use their card to make reservations. Program members can also earn room upgrades and free breakfasts at participating hotels, the use of a complimentary rental car for one day at participating car rental agencies, special savings on airfare, and two free visits to more than 600 airport lounges throughout the world.
Here's the catch: To join this program, you must be a member or family member of the U.S. Military or a military association, a U.S. government employee, or an employee or volunteer at the American Red Cross. Other applicants can obtain a PenFed Premium Travel Rewards card by becoming a member of the National Military Family Association or Voices for America's Troops. You will be asked for a one-time donation of $15 or $20 (depending on the organization), and you do not have to retain membership to remain a PenFed customer. There is no annual fee for the credit card, and the introductory APR is a miniscule 4.99 for the first two years (after which you can expect it to rise to 13.99).
Of course, before racking up credit card bills while chasing rewards points, you'll want to make sure you can pay off your bill each month. Building up debt and interest payments will only make your travel dreams harder to afford.
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Personal Finance - The Best Travel Rewards Credit Cards
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