5 Signs You Should Get a Travel Credit Card

Travel credit cards may be lucrative, but that doesn't mean they're ideal for everyone.

By Holly Johnson, ContributorFeb. 2, 2018
By Holly Johnson, ContributorFeb. 2, 2018, at 11:58 a.m.
U.S. News & World Report

5 Signs You Should Get a Travel Credit Card

Assess your travel style and spending patterns before committing to a travel credit card.(Getty Images)

Travel credit cards offer plenty of generous points and perks. If you're approved for one of the top travel credit cards and you spend enough to earn a sign-up bonus, you can quickly rack up enough points to pay for hotel stays, airfare and more. However, travel credit cards don't cater to all consumers' spending habits or travel styles. Plus, credit cards can be rife with pitfalls, ranging from late fees to misuse to credit card debt.

Before you sign up for a travel credit card, it's crucial to know if you're ready to commit. Here are five signs you have what it takes to use travel cards to your advantage – and not to your detriment.

You Don't Have Any Credit Card Debt

If you plan to carry a balance on your credit card, investing in a travel credit card isn't a wise idea. Why? Unlike traditional and low interest credit cards, travel cards tend to come with higher interest rates to make up for their generous rewards programs. Take the popular Chase Sapphire Preferred Credit Card, for example. While this card offers one of the most lucrative reward options, you'll pay an interest rate when you carry a balance. With exorbitant interest rates tacked onto all your purchases, it would be challenging to reap meaningful or valuable rewards that offset the expense. If you plan on carrying a balance on your credit card, you'd be much better off signing up for a card that comes a better interest rate rather than elite-status benefits and travel-related rewards.

You Pay Your Bills on Time

To get the most out of any credit card, it's crucial to make sure you're prepared to pay all of your bills on time. Keep in mind that your payment history makes up the largest component of your FICO score, meaning that late payments can hurt your credit more than anything else. Even worse, beyond causing your credit score to plummet, your card issuer could also issue a penalty APR that will cause your interest costs to surge. The bottom line: Only sign up for a travel credit card if you know you'll be able to pay your bill in-full and on time.

You Won't Use Rewards as an Excuse to Overspend

Because travel credit cards offer points and miles based on how much you spend, they can spell trouble for people who aren't disciplined or living on a budget. It's easy to buy things you don't need just to rack up more rewards, but this strategy will actually cost you money over time. The best way to ensure you're getting the most out of a travel credit card is to use it only for bills and planned purchases. If you let rewards entice you into overspending, you aren't doing yourself any favors.

You Understand the Value Proposition

Though many of the top travel credit cards charge an annual fee, the majority waive the annual fee for the first year. After 12 months, however, you'll have to decide whether or not to keep your card. This is where you'll need to run some math, or else you can wind up paying for benefits you don't really need.

If you pay an annual fee, you need to make sure you're earning enough rewards and utilizing enough perks to make it worthwhile. Never blindly pay an annual fee without analyzing your spending and making sure the rewards you earn are more valuable than the annual fee.

You Travel Often Enough to Redeem Meaningful Rewards

Signing up for a travel credit card may not be worthwhile if you don't have the time – or the budget – to travel. If you can't get any days off work this year, for example, travel rewards won't help free up your schedule. And if you don't have the budget to pay for food and entertainment, scoring free flights or a free hotel room won't help you in the long run.

The Bottom Line

While travel credit card offers are always enticing, committing to a new credit card might not be the best move for you. Ultimately, these offers are best for people who are debt-free, living within their means and are able to travel in the near future. Make sure the credit card you're interested in aligns with your travel and spending patterns.

50 Genius Money-Saving Travel Tricks Experts Know (That You Don't).

Holly Johnson, Contributor

Holly Johnson writes about travel, credit cards, personal finance and frugality for a wide ...  Read more

About En Route

Practical advice on the art of traveling smarter with tips, tricks and intel from En Route's panel of experts.

Contributors have experience in areas ranging from family travel, adventure travel, experiential travel and budget travel to hotels, cruises and travel rewards and include Amy Whitley, Claire Volkman, Holly Johnson, Marsha Dubrow, Lyn Mettler, Sery Kim, Kyle McCarthy, Erica Lamberg, Jess Moss, Sheryl Nance-Nash, Sherry Laskin, Katie Jackson, Erin Gifford, Roger Sands, Steve Larese, Gwen Pratesi, Erin Block, Dave Parfitt, Kacey Mya, Kimberly Wilson, Susan Portnoy, Donna Tabbert Long and Kitty Bean Yancey.

Edited by Liz Weiss.


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