Travel rewards credit cards continue to become more popular every year. These are not the cards that offer points and miles with airline and hotel programs, but cards that offer rewards points issued by the banks that can be used for nearly any travel reservation. While those who collect rewards from airlines and hotels are at the mercy of those companies’ policies when they try to redeem their rewards, the bank-run travel reward programs allow cardholders to accumulate rewards for use at any time with their favorite travel provider.
How These Programs Work
Cardholders earn points or miles that are issued by the bank, not a specific travel provider. Many of these cards allow customers to purchase travel the way they normally would, and redeem their rewards for statement credits toward any travel expenses. Others utilize their own online travel rewards portal that works similar to other online travel agents. Cardholders can then use their rewards points to pay for all or part of their reservations instead. Either way, travelers are treated as having paid for their reservations rather than using traditional airline or hotel awards. Unlike airline and hotel awards, this means that travelers can earn points and miles along the way, and be eligible for upgrades.
Are These Cards Right for You?
The ideal user of a travel rewards card that does not offer airline miles or hotel points is someone who has not been able to see much value from these programs in the past. For example, an airline credit card user who doesn’t have a lot of flexibility with his or her vacation time might be unable to use frequent flier miles for their desired flights. In addition, hotel reward cardholders often find that their points rarely offer them the value that the best travel rewards can.
Alternatively, those who have been successful in using airline miles and hotel points to book luxury travel might find that generic travel rewards don’t go as far. For example, 100,000 American Airlines miles can be used to book a round-trip award ticket to Europe in business class, while it might take $6,000 worth of travel statement credits for the same ticket. So if the cardholder was earning double miles for each purchase, and each mile was worth one cent as a statement credit, he or she would still need to spend $300,000 on their travel rewards card, versus $100,000 on most cards that offer one American Airlines mile per dollar spent.
Choosing Our Winners
First, we looked at the cards that offered the most valuable rewards per dollar spent on most purchases, and gave additional credit for cards that offered bonus points or miles at specific categories of merchants. We also considered fees such as annual fees and foreign transaction fees. Finally, we considered other perks such as travel benefits and chip and pin compatibility.
As you shop for a credit card, it can help if you know whether you meet the issuer’s guidelines (including your credit scores), so that you apply for a credit card that you’re more likely to get approved for. There are free tools that can help you prepare for your search, like at Credit.com, which gives you two credit scores and an overview of your credit profile, and updates them every month.
Now, let’s take a look at this month’s Best Credit Cards in America picks for travel rewards.
The Winner: Barclaycard Arrival Plus
This card won last year and has just released a host of improvements on the first anniversary of its introduction.
The rewards: New applicants receive 40,000 miles as a sign-up bonus after spending just $3,000 on their card within the first 90 days of opening an account. Cardholders receive double miles on all purchases and a further 10% rebate on their miles redeemed. Miles are worth one cent each as statement credits toward travel expenses, so rewards are worth 2.22% of each dollar spent. This year, the card has a new look that includes an EMV chip that is PIN enabled, breaking new ground among American credit card issuers. In contrast, other EMV-equipped cards are chip and signature, which may not work at all terminals that require chip and PIN. Other new benefits include the ability to claim rewards for travel purchases within the past 120 days (increased from 90 days), and the inclusion of complimentary online FICO score access with opt-in email alerts.
The costs: There is an $89 annual fee for this card that is waived the first year, and no foreign transaction fees.
1st Runner-Up: Capital One Venture Rewards Visa Signature Card
The rewards: New cardholders receive 40,000 bonus miles after spending $3,000 on purchases within the first three months of opening an account. Cardholders earn double miles on all purchases, and each mile is worth one cent each as statement credits toward any travel expense. This means that cardholders can always earn rewards worth 2% of their spending, which is a fantastic rate of return.
The costs: There is a $59 annual fee that is waived the first year, and no foreign transaction fees.
2nd Runner-Up: BankAmericard Travel Rewards
The rewards: New cardholders receive 10,000 bonus points after spending just $500 within the first 90 days of opening an account. Cardholders earn 1.5 points for every dollar spent, and each point is worth one cent as statement credits toward travel purchases. Cardholders who have a checking or savings account with Bank of American will also receive an additional 10% points bonus, so the rewards for this card are potentially worth 1.65% of spending. Finally, this card is one of the only credit cards offered at this time with an EMV smart chip, no foreign transaction fees, and no annual fee.
The costs: This card carries no annual fee and no foreign transaction fees.
Note: It’s important to remember that interest rates, fees and terms for credit cards, loans and other financial products frequently change. As a result, rates, fees and terms for credit cards, loans and other financial products cited in these articles may have changed since the date of publication. Please be sure to verify current rates, fees and terms with credit card issuers, banks or other financial institutions directly.
At publishing time, the Barclaycard Arrival Plus and Capital One Venture Rewards Visa Signature Card are offered through Credit.com product pages, and Credit.com may be compensated if our users apply for and ultimately sign up for either of these cards. However, this relationship does not result in any preferential editorial treatment.