While you might think that a travel credit card is worth it, you may be surprised to find out that you could be paying an annual fee of $95 or more. Then again, there are also other options available if you’d rather not pay such a high annual fee. In this article, you’ll learn about the benefits and drawbacks of a travel rewards credit card, along with alternative options.
Annual fees of $95 or more
Luxury travel cards tend to have high annual fees, but they can be offset by generous rewards and added perks, such as free checked bags and airport lounge access. When comparing travel cards, always compare the annual fee to the value of any rewards, statement credits, or added perks. Then, make your decision based on the benefits you receive. If the annual fee is more than $95, you’re probably better off with another option.
While the annual fee on most travel credit cards is about $110, a few offer no-annual-fee versions. If you have poor credit, you may have difficulty qualifying and calculating rewards. Many cards charge up to $95 annually, though some luxury travel and hotel cards charge up to $500. Keep in mind that points and miles will lose value if you redeem them for things other than travel.
Benefits of a travel rewards credit card
When you get a travel rewards credit card, you get more flexibility in redeeming your points. These cards are often linked to airline and hotel loyalty programs, which give you exclusive offers and discounts. These programs also reward you for using your card. You can earn bonus points with every purchase you make with the card. This flexibility is a great benefit. It allows you to save more money while traveling and avoid debt. However, you should consider which travel rewards credit card is the best fit for you.
Some cards have fixed-value rewards programs, which earn points or miles that are always worth the same amount. For instance, if you use the Bank of America Premium Rewards credit card, you’ll earn 1 cent per point. This type of card is best for beginners who aren’t maximizing their transferable points or casual travelers who don’t want to worry about dynamic pricing. Despite these drawbacks, fixed-value rewards programs are becoming more popular because of these benefits.
Alternatives to a travel credit card
When considering whether or not to apply for a travel credit card, you’ll want to make sure to consider your financial situation. While the best travel rewards cards can save you money if you use them wisely, they typically come with high interest rates. Unless you can pay off your balance in full each month, you risk losing money on interest charges and falling into credit card debt. To avoid this, consider other options, such as balance transfer credit cards, which offer a cashback reward program.
If you’re a frequent traveler, you might be interested in a general-purpose card with no annual fee. The Capital One Venture Rewards Credit Card offers unlimited five miles per dollar for qualifying Capital One Travel purchases. Unlike Capital One miles, however, Citi ThankYou rewards are flexible and can be used for many different types of purchases. If you’re looking for a general-purpose credit card that offers generous travel rewards without the annual fee, the Citi Double Cash Card might be an excellent choice.
Whether a travel rewards credit card is worth it
It can be difficult to decide whether a travel rewards credit card is worth the annual fee. Travel credit cards can have high annual fees of $95 or more. Some have as high as $695. You should always check the terms and conditions before applying for the card. You need to know exactly what you’re going to get out of the program before you sign up for it. Make sure you don’t spend more than you can afford to pay every month. You don’t want to end up stockpiling points that you don’t use.
Many travel rewards credit cards earn two points per dollar spent on travel. Some offer higher rewards for staying in hotels with their co-brands. Keep in mind that each card has its own rewards program and the amount of points you earn will vary. Many travel rewards credit cards have flexible redemption options, from statement credits to cash back. Many have multiple partners that make it easy to redeem your travel rewards. The point value of a travel rewards credit card can range anywhere from a few cents to more than $50.