Today’s guest post comes from Ben Lovell, who publishes a unique website called Gothic Optimist. If you’re looking to optimize your travel, including learning about what are, in Ben’s opinion, some of the best credit cards for travelers, this is a great piece.
Here’s more about Ben:
A passionate envoy of the written word, freelance writer Ben Lovell relishes a good tale. From fact to fiction (and all the shades between), he channels the storytellers of old with the hope of enriching the world for his readers. Follow his semi-occasional musings at the Gothic Optimist.
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Making Travel Expenses Make Sense
Generate Benefits by Traveling with the Right Credit Card
Compared to a daily life of brownbag lunches and 87 octane commutes, serious travel can be seriously expensive. There are two overarching strategies for making travel as budget-friendly as possible. The first and most obvious is to spend less money. The second is to generate your own rewards from the travel itself. The travel industry is full of benefits for the taking, all aimed at getting and retaining your business. Let’s wade through some of the perks of signing up for and utilizing credit cards with attached travel benefits.
Credit Cards with Travel Benefits
First a quick disclaimer. Any kind of debt can turn a mutually beneficial financial arrangement into a constant source of stress. Always read and understand the fine print of any credit card you apply for. Pay off your balances. With that word of warning out of the way, we can explore some great benefits of utilizing a travel credit card for travel expenses and some of the best credit cards for travel miles.
Types of Benefits
First let’s say this: putting travel related expenses on a travel credit card can really start to compound the benefits. For example, if you book a flight on Alaska Airline with an Alaska Airlines Visa Signature, you can build status and points with both the airline and the credit card simultaneously.
If you use your airline credit card to book your flights, you earn points on the credit card in addition to the benefits you accumulate with the airline itself. Among other uses, these credit card points can be used toward flight and upgrades.
Free Hotels & Rental Cars
Likewise, you can use points generated by credit card purchases to pay for hotels and rental cars. If you have a credit card that is sponsored by a particular hotel chain, using that card to book at the property can qualify you for rewards even faster. If not, check with your credit card to see if they have partnered with specific hotel chains or other businesses.
Credit toward Global Entry or TSA PreCheck
Applying for certain travel cards can qualify you for credit that can be used toward the application free for Global Entry or TSA PreCheck. If you qualify (based on a background check), these prescreening services can save you major time in large airports.
No Foreign Transaction Fees
If you travel overseas, foreign transaction fees (the charge for digitally changing your native currency to the local one) can really rack up. Having a credit card that waives these fees can be another major saver.
Strategies for Maximizing Benefits
Just having the credit card isn’t enough to ensure that you’ll properly benefit from it. Spending on the card is a good start, but there are even more tricks to maximize the positive results of utilizing a travel credit card.
Use Credit Cards to Book Flights and Hotels
Obviously using the credit card begins to generate points. However, using it to book flights, hotels, and other specific types of expenses could multiply these points by as much as 5x or 10x. Ready into all of your credit card’s policies to see what can earn you the most points.
Run up a Balance Early
Many credit cards off points multipliers within the first few months of having the cards. They may also offer a flat amount of points (as much as 50,000 – 100,000) if you hit a certain balance within the first several months. Remember to always spend within your means. Only put charges on the card that you can pay off so that you avoid expensive interest charges.
Check Expiration and Blackout Dates
It’s no good saving up points for a trip and then not being able to redeem then because the days are blacked out by the credit card. Some credit cards advertise that they don’t have blackout dates. You’ll also want to keep an eye on when your points expire.
A Note about ‘Points’
Credit Card points are an arbitrary currency and are not based on any universal standard. What is really important is the buying power of the points. For instance, a hotel room may cost you 50,000 points on one credit card and 500,000 on another. That difference would drastically affect the actual value of a 50,000-point bonus for enrolling.
Best Credit Cards for Travelers
Some Credit Cards (e.g. Marriott Rewards Visa Signature) are tailored to benefit you when you patronize a particular business. Other credit cards, such as Chase Sapphire Preferred and Capital One Venture, have more universal benefit for travelers.
Capital One Venture
The Capital One Venture card is engineered to benefit a plethora of travelers. From rewards like 2x miles on every purchase to a 50,000-mile bonus for signing up, this credit card can help you multiply the monetary rewards of traveling. Due to partnerships with sites like Hotels.com, how you book travel also comes into play.
Discover It Miles Card
Discover comes to the area of travel-oriented credit cards with a strong contender. The Discover It Miles card offers 1.5x miles and a mile-for-mile match the first year you have the card. This card also advertises no blackout dates. It accomplishes this by allowing you to redeem your miles as a statement credit toward the ticket purchase.
Chase Sapphire Preferred Card
Chase offers 50,000 bonus points when you spend $4,000 in your first 3 months of membership, a reward it equates to $500 cash or $625 if you redeem the points through Chase Ultimate Rewards. Other benefits like 2x miles on travel and dining and no foreign transaction fees make this an extremely appealing card for avid travelers.
The Bottom Line
If you’re unsure about applying for a credit card, always ask questions of a third party. Credit Card companies make it very appealing to rack up high balances on their cards. At 15% – 25% APR a carry-over balance can start to cost you a lot in interest charges or even penalties. Our goal here is to help you save on your travel. Use the cards to book great trips and access even better benefits, but always spend within your means. Use credit wisely, and it can open up the doors to some serious adventures for you.
Frequently Asked Questions
Can I qualify for an airline or other travel credit card with bad credit?
Virtually all travel credit cards require decent credit score (650 <) to qualify. If you want to work on your credit score (and you should), free credit report sites like creditkarma.com can help you repair your score. It can take some time, but anyone can build credit back up to a respectable level.
Does having credit card debt hurt my credit?
Not necessarily. Your credit score is more a measure of how you handle debt than whether or not you have it. A big factor in credit scores is how much of your available credit you have used. For instance, if you have a $500 balance on a $5,000 credit card, you have used 10% of your available credit. This looks great to lenders because it demonstrates restraint and that you live well within your means. Even if you have some credit card debt, having credit cards with lots of available credit helps your credit score.