Choosing and using travel credit cards
Loyalty is an attractive quality. Indeed, airlines admire it so much in their customers that they reward it with points, miles and perks. The problem is, there's been a lot more competition among carriers over the last few decades, and the whole industry has now become one with low margins. And, if you're not making a lot of profit, you can't afford to be quite so generous.
Both Delta and Southwest recently announced changes to their co-branded credit card rewards programs that are unlikely to make their customers happy. And that's probably part of a general trend that could see virtually all these types of miles and points devalued, according to a recent MarketWatch article suggesting that soon only the most frequent and loyal passengers who fly in premium classes are going to find airline-branded plastic worthwhile.
Best airline credit cards
Depending on your card and your travel habits, it may be too soon for you to dump that plastic quite yet. But it's probably a good idea to review the contents of your wallet now to make sure you're still getting good value. Here are nine questions to ask yourself:
- Are my rewards still valuable enough, or could I do better with another card?
- Can I earn miles or points quickly?
- Are my rewards easy to redeem, or do I have to jump through hoops?
- Are there blackout dates (popular travel times when the airline stops you using your rewards for tickets) or seat restrictions?
- If I travel abroad, do I have to pay foreign transaction fees?
- How valuable to me are the perks I get (first checked bag flies free, say, or complimentary access to lounges)?
- If I'm paying an annual fee, is it still delivering value for money?
- Does the card have an EMV chip that makes it easier to use in foreign countries that already use chip-and-PIN or chip-and-signature for payments?
- Assuming I ever roll forward balances, are the interest rates reasonable?
Bottom line making a decision on which card to consider depends on how you're going to use it.
Best hotel credit cards
There's little evidence yet of a squeeze on the rewards available from hotel credit cards, although you should still ask the same nine questions that apply to airline plastic. Depending how much you like each hospitality provider, candidates for your short list are likely to include the Hilton cards, but also check out the Best Western World MasterCard, along with Hyatt's and Starwood's offerings.
However, the current flavor of the month seems to be the Marriott Rewards® Premier Credit Card. A few highlights that this card offers (and, again, check with the issuer to confirm current validity): A 50,000-point sign-up bonus, after you spend $1,000 on purchases on your card during the first three months your account's open. Five points for every dollar spent on purchases at more than 3,800 Marriott and Ritz Carlton locations. Two points for every dollar spent on purchases of airline tickets booked directly with the airline, and at car rental agencies and restaurants. One point for every dollar spent on all other purchases.
Best travel credit cards
There are plenty of general and travel rewards cards -- for example Capital One® Venture® Rewards Credit Card -- that aren't co-branded, but that offer great rewards for travelers.
Arguably, the current star among these is the Barclaycard Arrival Plus™ World Elite MasterCard®. At the time of writing (check!), its headline offer includes:
- A 40,000-mile sign-up bonus (worth $400 in travel), after you spend $3,000 on purchases on the Card during the first ninety days your account's open.
- An earning rate of 2X miles for every dollar spent on all purchases.
- You can earn 10 percent of your miles back as a bonus every time you redeem miles for a statement credit toward a travel purchase.
- The normal annual fee ($89) is waived in the first year.
- Purchase credit card rates are competitive and are based on factors such as your creditworthiness.
- No foreign transaction fees on purchases made in another country.
The market for travel-related cards may be changing, and not always for the better, but there are still some great deals out there.
Published 04/28/14 (Modified 10/09/14)