How to choose the right travel credit card

There are two kinds of travel credit cards: co-branded cards, which are issued by a bank in partnership with an airline, hotel, or other travel company, and general credit cards that have travel partners.

Using co-branded cards, holders earn the currency of the travel provider, such as miles with airlines, that can be spent only with that company. With general bank cards, consumers amass points that can be used through the issuers’ travel services to book flights, hotels and trips with an array of travel companies.

In choosing between them, “one of the biggest considerations is loyalty,” said Ted Rossman, a senior industry analyst at the consumer financial site Bankrate.com. “If you only fly one airline or stay in certain hotels, you might lean toward a co-branded card.”

The alternative offers more spending flexibility.

“A general card is for someone who doesn’t want to be limited in booking travel,” said Erica Sandberg, a consumer finance expert at CardRates.com, which offers advice on credit cards.

Although there are credit cards with no annual fees — such as the Capital One Savor — travel cards commonly charge between $95 and $695 a year. Their value depends on how you use them.

Among perks such as priority boarding, co-branded airline cards, which generally start around $95, usually include free checked bags for the cardholder and several companions booked on the same reservation with that credit card. For a couple who would otherwise pay $35 one-way to check a bag, checking two bags round-trip would cost $140, exceeding the annual fee in just one trip.

Co-branded hotel cards — Hyatt’s World of Hyatt cards start at $95 — tend to come with a free room annually, which can easily pay for itself.

More expensive cards, including the Capital One Venture X ($395), Chase Sapphire Reserve ($550), and the American Express Platinum Card ($695), come with an array of quantifiable benefits. Chase and Capital One provide up to $300 in annual statement credits for travel purchases; Amex offers up to $200 in airline-fee reimbursements, $200 in hotel credits, and $200 in Uber credits annually.

Ignore benefits you won’t use such as discounts on memberships to a gym that’s not in your area.

“All those wonderful perks are valuable only if you use them,” Sandberg said.

For travel abroad, ensure that you have a card with no foreign transaction fees, which can add 3 percent on average to each purchase.

Some card benefits are harder to quantify, such as airport lounge access, which offers refuge from the crowds at terminals as well as complimentary food and drink.

Nick Ewen, senior editorial director of the Points Guy, a website devoted to loyalty programs, highlights the travel insurance coverage provided by many cards.

For example, if your flight is delayed more than 12 hours and you paid for it with the Chase Sapphire Preferred card, you can get up to $500 in reimbursement for expenses incurred such as meals and lodging.

“Protection is potentially the most unsung benefit,” Ewen said.

Travel credit cards tend to offer higher rewards for travel purchases. And the more expensive the card, the greater the award, with the most expensive cards paying five points for every dollar spent on flights and five to 10 points for hotel bookings.

As a frequent traveler, you don’t need an expensive card to increase your earnings. Chase Sapphire Preferred ($95) offers three points on every dollar spent on dining and two on travel. The Capital One Venture Rewards card ($95) offers two points on every purchase and five on hotels, vacation rentals, and rental cars booked through its platform.

Whether they reach you on a plane or via email, credit card offers usually dangle substantial sign-up rewards such as 60,000 miles or points — usually enough to take a trip for two — once you meet a certain spending threshold.

“Oftentimes, bonuses require a decent amount of spending, like $3,000 over three months,” said Rossman, who recommends signing up when you know you have some big expenses ahead, such as home improvements.

“The holidays are a good time since your spending is probably going up anyway and you’ll hit that threshold and get the bonus points to use for spring break,” he added.

Most travelers can cover their needs with a card or two. If you travel regularly, a co-branded card and another general-purpose card can provide immediate travel perks — such as upgraded airline seats — with more generous opportunities to earn and spend.

A second card can also help in a travel emergency.

“As a traveler, you want to make sure you have enough borrowing power should you get stuck somewhere based on events like hurricanes,” Sandberg said.

Should you decide to take on more cards, beware of overlapping benefits.

“As you add more cards, it adds costs and takes time to understand,” Ewen said.

Cardholders should do a regular audit of their wallet.

“It’s important to look at your travel and spending habits and say, ‘Is it worth it to open a credit card and keep it open?’” said Ewen, who does that annually with all 24 of his cards.