Excellent Travel Credit Cards –
In the world of miles and points not all credit cards are created equal.
In my opinion some of the best credit cards are those that offer the following benefits:
- Reward point system that is flexible and allows for transfers to multiple airline and hotel programs
- No foreign exchange rate fees
- Bonus point opportunities for specific expense categories
Reward point system that is flexible and allows for transfers to multiple airline and hotel programs
I think that the first point is most important. As we have seen over the past several years, multiple award programs have been devalued and it now costs a lot more miles in order to redeem for travel experiences. By having an award currency that is transferable you can help reduce the risk of accruing too many points in a program that could at any time be devalued.
By having a transferable point credit card option means that you can keep the points in your credit card account. When you are ready to book an award trip, you can look at the options on various airlines and then just before the booking you can transfer the exact amount of points needed.
If you have all the points in a specific airline program you may find that when you are ready to book an award trip that the specific trip you are looking for is either not available or requires significantly more miles than you were expecting.
By keeping the points in a transferrable program, you can shop around for the best value for the redemption, then transfer the points when needed and book it. That way you do not need to have too many points in a specific award program that could be devalued.
No foreign exchange rate fees
The second point is also important because many credit cards charge a fee when you make a purchase in a foreign country to exchange the currency into the currency of the card. This has been a big money making opportunity for credit card companies because they can add a 1-3% fee on top of the purchase price for an exchange fee. Not to mention, the exchange rate used by the credit card company also has some fee incorporated into it as to benefit the credit card company.
Cards that do not charge a foreign exchange fee can amount to big savings to you as you can avoid that 1-3% fee.
Lets say that you are staying at a resort in Europe and your total bill for a week at the resort is 2,000 Euro.
At the current exchange rate of 1 Euro = 1.14 USD the 2,000 is $2,289.40.
If the credit card charges a fee of 3% for the foreign exchange rate that comes out to $68.68 ($2,289.40 * 0.03). So that $68.68 could have paid for a nice meal or some other expense while you were away or even while you are back at home.
Cards that do not charge this fee are most valuable to me because I can get more travel experiences by avoiding the fee.
Point opportunities for specific expense categories
The great thing about card programs related to travel is that they generally offer double points for travel expenses. So that means that you typically earn 1 point for every dollar spent for regular purchases. When a card offers a bonus category and you have spend within that category every dollar spent can mean 2 or more points.
This means that every travel expense you pay for earns double or more the amount of points. That means you get more value out of the expenses.
CHASE Sapphire Preferred
One of the credit cards that I love that incorporates all three of the points mentioned above is the Chase Sapphire Preferred Card. I use this card for all my travel expenses.
The Chase Sapphire Preferred Card has a low annual fee that is waived the first year and it allows double points for all travel and dining out expenses.
The Chase Sapphire Preferred Card earns Chase ULTIMATE Reward points which can be transferred to various airline partners including British Airways, United, Korean Air and Singapore Airlines. This allows for redemption on One World, Sky Team and Star Alliance flights worldwide. In addition, you can transfer points to Hyatt for redemptions at hotels worldwide.
In addition, the Ultimate Reward points can be redeemed directly for travel purchases. This generally does not provide as much value; however, if you are booking economy tickets it is a good option and in some cases you even earn miles on the tickets purchased via the direct method.
Note: It is important to remember that travel credit cards often have high interest rates. You should only charge expenses on the card that you can pay off within the month because the interest rates negative the benefits from the travel points.
What is your favorite credit card?