Chase Sapphire Reserve℠

3 Questions to Ask Before Opening a Travel Credit Card

This post contains references to products from one or more of our advertisers. We may receive compensation when you click on links to those products. For an explanation of our Advertising Policy, visit this page.

Before you start exploring the world, you need to explore the world of travel credit cards. It’s a landscape filled with loads of tempting offers — 50,000 bonus points after $4,000 in purchases, two free weekend nights after spending $2,500, 30,000 miles with $1,000 of purchases and more. With so many opportunities to earn additional free points, miles and stays, how do you determine which card is right for you?

It’s important to go beyond the basic bonus offers to read the fine print and consider your personal travel habits before submitting an application for a new card. As you dream of packing your bags for that next getaway, be sure to answer these questions when comparing travel credit card options.

The right travel credit card could help you find your way to this beautiful beach.
The right travel credit card could help you find your way to this beautiful beach.

1. Should you pay an annual fee?

Extra rewards can come with extra expenses. That’s why some of the best travel credit cards carry annual fees, which typically range between $95 and $450. This price tag may sound steep, but in many cases, paying a bit extra can pay off in a big way.

For example, the Ritz-Carlton Rewards Credit Card comes with a $450 annual fee, but it also comes with a $300 travel credit for airline purchases such as seat upgrades and baggage fees. It also delivers a $100 hotel credit, along with a range of other valuable perks.

No matter which credit cards you are comparing, do the math to determine if the accelerated points potential will help you earn enough to override the annual fee. The answer will always depend on your personal spending and travel habits; if you’re always on the go, chances are that you’ll be able to make that fee feel like a bargain.

2. What are those points and miles really worth?

Many airline-branded credit cards promote the ability to take some type of dream trip using the miles from a bonus opportunity. Some of these offers may work out in your favor, but it’s important to note that some carriers are a bit stingy on your ability to cash in miles.

For example, I recently tried to book a flight from Chicago to Dallas using my American AAdvantage miles. The most affordable option required departing at 6am and connecting in Kansas City. Not exactly a “dream trip.” If I wanted a nonstop flight at a more favorable time, I would have needed to cash in significantly more than 25,000 miles for the round-trip ticket.

Depending on the day, miles can mean very different amounts.
Redemption rates (and the value you get from your rewards) vary depending on the day.

TPG has a monthly series that provides a good guideline of how much value you can expect to get out of the top loyalty currencies. As a general rule, when cash prices are cheap, your points and miles are less valuable — consider saving them for a more expensive flight or hotel stay.

3. How loyal do you plan to be?

If you only stay in the same hotel chain wherever you go and you only fly the same airline to get from here to there, a branded hotel or airline credit card may be a great option. You can automatically qualify for elite status, upgrades and a range of perks reserved for the company’s most loyal customers.

However, if you spend your time chasing low fares or you love experiencing a range of different hotel properties, you’ll be better off with a more flexible card that offers accelerated earnings on all travel-related purchases — no matter which airline you’re flying or hotel room you’re calling home for the night. Some of the best candidates include the Chase Sapphire Reserve Card, the Chase Sapphire Preferred Card and the Citi Prestige Card.

Want to make sure you’re reaping the biggest reward possible? Check out the TPG Wallet Maximizer to earn what you deserve.

Featured image courtesy of Getty Images.

Chase Sapphire Preferred® Card

Apply Now
  • Earn 50,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $625 toward travel when you redeem through Chase Ultimate Rewards®
  • Named Best Credit Card for Flexible Travel Redemption - Kiplinger's Personal Finance, July 2016
  • 2X points on travel and dining at restaurants worldwide & 1 point per dollar spent on all other purchases.
  • Earn 5,000 bonus points after you add the first authorized user and make a purchase in the first 3 months from account opening
  • No foreign transaction fees
  • 1:1 point transfer to leading airline and hotel loyalty programs
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 50,000 points are worth $625 toward travel
  • No blackout dates or travel restrictions - as long as there's a seat on the flight, you can book it through Chase Ultimate Rewards
Intro APR Regular APR Annual Fee Foreign Transaction Fee Credit Rating
N/A 16.24%-23.24% Variable Introductory Annual Fee of $0 the first year, then $95 0% Excellent Credit