A travel credit card is a card that earns rewards on travel. Rewards may be earned in the form of airline miles, hotel points or flexible points that can be transferred to partners or applied towards travel charges.
Many travel credit cards also come with additional benefits such as free checked bags, priority boarding, elite status, access to airport lounges and even discounts on hotels or rental cars. Some cards offer welcome bonuses when you meet an initial purchase threshold, which can provide a nice cache of points or miles to help you start redeeming for valuable rewards. The best travel cards also charge no foreign transaction fees, which means there is no extra charge from the credit card company to make purchases abroad.
– Becky Pokora, Credit Cards Writer
How Do Travel Credit Cards Work?
A travel rewards credit card accrues miles or points for each purchase made with the card. Every card has a different earning and redemption structure.
Here’s how credit card points and miles work:
1. Earn rewards when you make purchases. Nearly all purchases on a card will earn rewards at the rate specified by the card. Rates may vary based on the type of purchase.
2. Rewards are deposited into your account. Most cards update your rewards balance once per month, after your billing statement closes. On co-branded cards, travel rewards are typically deposited into your existing airline or hotel account automatically. On general travel cards, you’ll most likely have a bank of points where rewards pool.
3. Consider your reward options. Airline and hotel point values often are variable, which means that the value of a point may fluctuate depending on the specific redemption. Before you make a redemption, ensure that you’re happy with the value of your specific reward.
4. Make a redemption. Once you’ve chosen a redemption option, you’ll need to follow the specific direction to request your reward. Depending on the type of redemption, you might request this through your card issuer through their travel portal or your preferred travel partner.
There are many other intricacies to redeeming miles and points, so if you’re not confident on all your options, you’ll want to review the opportunities from your program before committing to a redemption.
Types of Travel Credit Cards
Not all travel credit cards are alike. Here’s how the various types break down, so you can choose which type of rewards card is best for your unique circumstances.
Airline Credit Cards
Hotel Credit Cards
Fixed-Value Credit Cards
Business Credit Cards for Travel
Co-branded Travel Cards vs. General Travel Cards
A co-branded card generally makes sense if you tend to stay loyal to that brand when you travel. Using a co-branded card can fast-track you towards elite status with a hotel or airline and often comes with other valuable benefits. If you’d prefer to fly any airline you choose and stay at any hotel brand you’d like, a general travel card is likely a better choice for your needs.
What You Get With General Travel Credit Cards
With travel credit cards, the level of benefits will most likely be associated with the annual fee. A premium card might come with airport lounge access, travel protections including trip cancellation and delay insurance and exclusive privileges at luxury hotels. A midrange card might still offer auto rental insurance and a Global Entry or TSA PreCheck® benefit. Even a card with no annual fee might offer some basic benefits depending on the card.
What You Get With Co-branded Travel Credit Cards
A co-branded travel card will offer benefits specific to that brand. For airline cards, you might see a checked bag benefit or a discount on in-flight purchases. For hotel cards, you might see a status level, a free annual night award or anniversary points. Both types of cards might offer you the ability to spend towards higher levels of status.
To learn more about the best co-branded credit cards, see our guides below:
Is it better to choose a flexible travel rewards card or one branded to a specific airline or hotel?
Clint Proctor
Credit Cards Lead Editor
Becky Pokora
Credit Cards Writer
If I had to choose, I’d say flexible travel rewards because it allows for much more versatility in your redemption options beyond just flights and hotel stays. But the best approach is to have both. You can maximize benefits from each card type by earning rewards across all of the spending you normally do, while getting perks with your favorite travel providers at the same time.
Since I’m not particularly loyal to any airline or hotel, I prefer the flexibility of general travel cards. I especially appreciate travel cards that offer transfers to travel partners. With flexible rewards, I can access 10 to 20 or more loyalty programs from a single card. This increases my chances of being able to take advantage of the best award deals that are available for my next trip.
I love that most co-branded travel cards include benefits when booking with that brand. Free night certificates on hotel cards and free checked bags with airlines are valuable perks. Plus, even though earning a single type of point might seem limited, big hotel chains have more than a dozen brand choices and airlines may have 10 or more alliance partners, so you’ll still find plenty of versatility.
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