How to Choose a Travel Rewards Card

Broadly speaking, there are three major types of travel rewards credit cards, each with its own set of characteristics:

If you’re loyal to a specific airline or hotel chain, then a co-branded card may work well for you. The downside to co-branded cards is that you’re typically limited in how you earn and redeem your rewards. If you’d prefer the flexibility of choosing whichever airline or hotel suits your travel needs or has the best deals, a general travel rewards card could be the better fit. However, the value of your rewards may fluctuate depending on how you choose to redeem them and which transfer partners you redeem them with. Across all of these travel credit card types, it’s common to find an annual fee, but there are travel cards with no annual fee.

Choosing the best travel credit card for you means getting clear on a few aspects of your travel preferences. This can help you choose a card that closely aligns with your needs.

• Traveler Type
  Are you a budget traveler, a luxury traveler, or a little bit of both? This determines which cards you should look for. Budget travelers may be better suited to a flexible travel rewards card that allows them to shop for the best deals. However, luxury travelers who splurge on flights, hotels, or both may find that co-branded cards fit their needs.
• Travel Frequency
  How often do you travel each year? If you travel only once or twice a year and take only domestic flights, you may not find a premium travel card worth the high annual fee. However, frequent travelers who take at least one international trip and a few domestic trips each year can get significant value from premium travel cards.
• Location
  Where do you plan to travel? Some travel credit cards only work with domestic travel partners, which may limit your rewards redemption options if you travel internationally. It may also help to choose a co-branded airline credit card that has multiple flight options from your home airport. For example, if you live near a Delta Air Lines hub, it makes sense to get a co-branded Delta credit card.
• Companions
  Do you typically travel with children or a companion? If so, you may want a credit card that offers benefits like companion certificates or lounge access for guests.
• Spending Habits
  Where does most of your credit card spending happen? Identify your top spending categories and compare credit cards that offer the highest rewards for those categories. If your spending stretches across multiple categories, you could choose a flat-rate travel credit card that rewards you equally for all your purchases.

To get a better idea of how this applies, let’s say your top spending categories are dining and groceries. You travel multiple times a year and prefer to make it a luxury experience. You live near a Delta Air Lines hub, and you’re a Delta loyalist who typically travels solo except for the occasional friend who tags along.

A great choice might be the Delta SkyMiles^® Platinum American Express Card. It rewards Card Members with 3X miles on Delta and hotel purchases, 2X miles on dining, including takeout and delivery in the U.S., 2X miles on groceries at U.S. supermarkets, and 1X miles on other purchases. Other benefits include a Delta Companion Certificate issued each year after Card renewal, first and second checked bags at no cost for domestic Delta flights, and Zone 5 Priority Boarding.¹

The Companion Certificate requires payment of government-imposed taxes and fees of between $22 and $250 (for itineraries with up to four flight segments). Baggage charges and other restrictions apply. Delta Basic experiences are not eligible for this benefit.

Once you’ve identified your preferences, it’s easier to pin down the rewards, benefits, and type of credit cards to search for. Follow these five steps to choose the travel card that best fits your lifestyle.

• Choose your benefits
  List the benefits and perks that are an absolute must for your next travel card. Many travel cards offer benefits like travel insurance, statement credits for travel purchases, airline or hotel status, and even lounge access.
• Decide on annual fees
  The more benefits you get with a travel card, the higher you can expect the annual fee to be. Decide whether a card with an annual fee is right for you. If you decide to include annual fee credit cards in your search, make sure it’s within your budget and that the card carries enough benefits to justify the fee each year.
• Consider welcome offers
  Many travel credit cards have welcome offers for new card members, which reward you with additional points, miles, or cash back after spending a certain amount within a few months of opening the card. If you were already planning to spend the amount required to earn the welcome offer, this could be a way to recoup the annual fee in the first year.
• Run the numbers
  Do the math or use a rewards calculator to determine whether the card makes sense to apply for. Account for the amount of rewards you could earn from your regular spending, the value of any statement credits, and any fees. Ideally, the rewards and benefits should outweigh the annual fee and any additional cardholder fees.
• Prequalify for the card
  Before submitting an application and getting a hard credit inquiry, use the credit card issuer’s prequalification tool, if available, to make sure you can qualify for the card. Many premium travel cards require good to excellent credit for approval. Using a prequalification tool allows you to see which cards you may be approved for without a hard inquiry. A good example of this is the American Express Apply With Confidence feature.

It’s important to compare multiple travel cards during this process to make sure you’re getting the best option for your spending and travel preferences.