In the world of rewards credit cards, there are two main groups: team travel and team cash back. Some people swear by travel credit cards, while others want to keep it simple with a cash back card. Just to be clear, store credit cards aren’t good enough to have their own team.
Travel cards can save you a lot of money overall, but only if they fit into your lifestyle. To find out, here are the top reasons why you should choose a travel card over a cash back card.
1. Travel several times a year
Generally, the more you travel, the more valuable your travel card will be. There are a few reasons for this.
- Most travel cards come with special travel perks. For example, there are cards that give you access to airport lounges, cards that give you free nights at your favorite hotel chains, cards that give you free checked bags with airlines, etc. If you travel frequently, you’ll have more opportunities to take advantage of rewards.
- Many travel cards offer bonus rewards on travel-related spending. There are cards that allow you to earn bonus points on airfare, hotel stays, or the entire trip. Some travel cards even include dining as a bonus category, another area where most people spend money while on vacation.
- You’ll be able to use your travel rewards more frequently. Travel rewards typically have more value when used towards travel expenses, so if you travel regularly, it’s easier to make the most of your credit card points.
If you only travel once a year, a travel card may not be right for you, if you travel twice a year it is, if you travel 3 or more times a year a travel card is worth its weight in gold.
2. I want to book a luxury trip
Travel rewards are one of the best ways to book that dream trip, and if you want to fly business class internationally and stay in a five-star hotel, credit card points are the way to go.
You can use your points to book more affordable travel — it’s fine to redeem your points for economy airfare or affordable vacation rentals — but luxury travel, in particular, tends to be a lot more affordable with points than with cash.
For example, a domestic economy class ticket will cost $300-400, or 30,000 miles. An international business class ticket often costs more than $2-3,000, but can sometimes be booked for 50-80,000 miles. Using travel rewards to book the latter can save you much more money.
That’s the magic of travel rewards cards: They allow you to book trips that are outside your budget or require a large amount of savings.
3. You’re comfortable learning how travel rewards programs work
The downside to travel cards is that there is a learning curve. With a cash back card, it’s easy to get started and redeem rewards quickly. With a travel card, it’s not as easy.
Many popular travel cards have complex rewards programs that allow you to transfer points. These points can then be transferred to airline or hotel loyalty programs that your card issuer partners with. For example, if your card issuer allows you to transfer points to United, you can convert 50,000 points into 50,000 United miles.
Some people are willing to invest the time to learn about travel rewards programs. Many people enjoy travel rewards programs and consider travel a hobby that they can get at deep discounts. If you feel the same way, a travel card might be for you.
Both travel cards and cash back cards have their benefits. The key is deciding which credit card is best for you. Now that you know when to get a travel card, you can decide if it’s the right choice for your lifestyle.
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