Top 5 Credit Cards for Travel

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One question I see asked A LOT is, “What is the best credit card to earn points for travel?” If you’ve asked this, you’re far from alone. In fact, you’re in a giant boat with hundreds, no thousands, of other Americans asking the same thing. Hence, this inspired post. Below, you will find the best credit cards for earning travel rewards (as of April 2016, anyway).

Credit Card OptionsBefore we dive into the different options, I want to talk about some general knowledge about credit cards. As a business major, I think it’s important to know how to avoid falling into the traps of credit card debt. Often times, I’ll be scrolling through some post about credit cards and I will see so many angry people talking about how horrible credit cards are! So let’s clear the air. Credit cards are not bad! Not when you know how to use them. In fact, when used properly, they’re incredibly helpful! Earning you free rewards, simply for using them as opposed to your debit card or checks or even cash.

Credit Card Debt

I have had credit cards for years, ever since first applying for my Discover It card in college. At the time, I made next to nothing, working part time and being a full-time student. My credit card, cash back rewards card, had a pretty pathetic limit ($500/month), but it was a start. It was a way to begin building my credit, which everyone should begin in their early 20s, if they haven’t already. You didn’t need to have established credit to apply/be approved and it was/is a great card for college students. If you are interested in applying for this credit card, you can follow my referral link here and earn an extra $50 cash back when you make your first purchase. Again, this is a card for STUDENTS to begin establishing credit! If you already have established credit, do not apply for it! That being said, if you are a student with no credit, like I was, it’s handy for monitoring your FICO credit score to begin to really start understanding how credit lenders view you. Viewing your credit score more than 3 times per year (or too close together) starts to hurt your credit score, but the Discover It card gives it to you on your monthly statement at no penalty. There is no annual fee for this card and there are plenty of cash back opportunities! One of my favorite things to do with this card is build up a bunch of cash back and then go shopping on Amazon where I can use my cash back on purchases. Hello free stuff!

Discover It Card

So let’s talk about avoiding debt. All credit cards will list their APR or annual percentage rate of interest before you apply for them. A credit card’s interest rate is the price you pay for borrowing money. For credit cards, the interest rates are typically stated as a yearly rate (APR). To avoid paying interest, simply pay off your credit card balance IN FULL at the end of each month! Don’t just pay off your minimum balance; that’s how you begin falling into debt. Keep a ledger of your purchases, similar to that in the back of your check book (if you even use checks) and watch your checking account! I know it’s tempting to just swipe your plastic for a big purchase because you can, but realistically ask yourself if you can afford it. Avoiding credit card debt is mainly about having good self control. Now before you start attacking me because you’re in debt, I know that there are extenuating circumstances that may cause you to have to use your credit card even when you don’t have the money in your checking/savings account. Life happens, I get it. But in general, ask yourself if you really need that beautiful necklace or fancy hand lotion or new GoPro or video game. Most likely, you don’t. A little money here and there can really add up by the end of the month. So practice good self control, watch your balance, and do your best to avoid unnecessary purchases.

Fico Credit Mix

A few tips for maintaining good credit:

  1. Understand how your credit works
    First and foremost, know what goes into establishing your credit score (see image above). The amount you owe on your total credit line (all of your debts combined) and your payment history (the past 2 years worth) are the two biggest establishing factors in determining your credit score.
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  2. Keep your total debt fairly low
    The best way to maintain good/excellent credit is to not owe too much! You should keep your total debt somewhere between 10%-29% every month. Basically, if you have three credit cards and their total limit adds to $10,000, you should keep your total balance (all cards combined) somewhere between $1,000 – $2,900 each month. If you only have one credit card with a $1,000 limit, keep your balance between $100 – $290 each month. You want to utilize or leverage your debt, but not so much that lenders think you are relying on debt, otherwise you pose a greater risk and your score will drop. For more detailed information, visit this post here. Even if you pay off your debt in full at the end of every month, carrying too high of a balance will still lower your credit score! I learned that the hard way and had a huge credit score drop for a few months after spending a bit too much even though I still paid my balance off in full!
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  3. Maintain your old credit accounts
    As mentioned above, my first credit card was the Discover It card that I opened as a college student. This is my oldest credit account to date and by closing it, I would be throwing away years of history which will adversely effect my credit score! If you already have too many credit lines, closing some might be a good idea, but try to keep your oldest credit lines as these show lenders that you have a good history with debt.

Now onto the good stuff!Ok, realistically this probably could have been two separate posts, but it’s important to me that you at least have the option to scroll up to know some basic credit card information. Keep in mind that I am not a financial advisor! I’m merely a former business student who has studied personal finance. I want to spread my knowledge to help you, if I can, but I always encourage you to do your own research before making any serious decisions! There is a lot more than goes into building good credit, including taking out mortgages and personal loans, but since we are focusing on credit cards here, that’s all I have discussed.

The Top 5 Travel Credit Cards!

  1. Chase Sapphire Preferred Card
    Chase Sapphire PreferredTopping the list, I am starting with the Chase Sapphire Preferred Card. This card was named the best overall travel card by Money Magazine for 2016. It is backed by Visa.
    breakHighlights: You get 50,000 bonus points when you spend $4,000 in the first three months of opening the card, or about $625 worth of travel redemption. You get 1 point per dollar spent on general purchases and 2x the points on travel and restaurant dining purchases. If you add an authorized user to your account and they make a purchase, you get another 5,000 point bonus. And of course, there are $0 foreign transaction fees! A must for travelers. There is a 1:1 travel points transfer too, which means when you transfer points from this card to an airline or hotel, you don’t lose anything!  Another plus is that the card is pretty cool looking, with its sleek, metal design.
    breakAPR: 16 – 24%
    Annual Fee: $0 the first year then $95/year
    Credit Needed: Excellent credit to apply/be approved
    breakDownsides:  I’m not a huge fan of annual fees, simply because I don’t think I spend enough to warrant paying them. Paying almost $100/year simply to own the card is a little much, in my opinion. But if you’re earning enough rewards back then it might be worth it! Also, to get the huge 50,000 point bonus for initial sign up, you need to spend $4,000 in the first three months or you don’t get the rewards points. Again, as a single gal who doesn’t spend too much money, that is a bit out of my reach.
    breakTo Apply: Click here
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  2. Capital One Venture Card
    Capital One Venture CardAnother great card for general travel is the Capital One Venture Card. Like the Chase card, it is also backed by Visa.
    breakHighlights: You will get a one-time bonus of 40,000 miles once you spend $3,000 on purchases within the first 3 months, equal to $400 in travel. You earn 2x the points on every purchase, all the time (unlike Chase where you only earn double points on travel and restaurant purchases). The card can be used on any airline/hotel. And of course there are no foreign transaction fees!
    breakAPR: 13 – 24%
    Annual Fee: $0 the first year then $59/year
    Credit Needed: Excellent/Good credit needed to apply/be approved
    breakDownsides: Again, I’m not a fan of annual fees. The mile bonus isn’t quite as high as Chase’s but you might balance out in the long run since you earn 2x the points on your purchases.
    breakTo Apply: Click here
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  3. Capital One Venture One Card
    Capital One Venture One CardI know what you’re thinking, “Isn’t this the same card as the one before?” Well, almost. The Capital One Venture ONE card is sort of like the little sibling to the Venture card before it. Like the Venture card, it is also backed by Visa.
    breakHighlights: As a new cardmember, you will get a one-time bonus of 20,000 miles once you spend $1,000 on purchases within the first 3 months, equal to $200 in travel. You earn 1.25 miles on every dollar you spend, a bit lower than the 2x on the Venture card. However, like the Venture card, there are not black out dates and you can redeem your points for any airline/hotel. $0 foreign transaction fees!
    breakAPR: 12 – 23%
    Annual Fee: $0
    Credit Needed: Excellent/Good credit needed to apply/be approved
    breakDownsides: You don’t earn as many points as either of the previous two credit cards. The sign up bonus is quite a bit smaller. However, I love that you don’t have to pay an annual fee! It’s also a bit more realistic (for me) to spend $1,000 over the course of 3 months than it is to spend $3,000 – $4,000 to earn the travel rewards.
    breakTo Apply: Click here
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  4. Barclaycard Arrival World
    Barclaycard Arrival WorldThis was actually voted as the top travel card for 2015 by Money Magazine. While Chase Sapphire Preferred may have beaten it for 2016, Barclaycard Arrival still manages to hold its own. It is backed by MasterCard.
    breakHighlights: Earn 20,000 bonus miles after you spend $1,000 on purchases in the first 3 months (90 days) — that’s $200 for travel. Like Chase Sapphire Preferred, you earn 2X miles on travel & dining and 1X miles on all other purchases. You get 5% miles back to use toward your next redemption, every time you redeem, which is kind of unique. It’s a good card for people (like me) who spend less than $1,000 per month on their credit cards. There are no foreign transaction fees and your FICO credit score will be included on every statement! Bonus!
    breakAPR: 16 – 25%
    Annual Fee: $0
    Credit Needed: Excellent/Good credit need to apply/be approved.
    breakDownsides: APR is slightly high (though if you’re paying your balance in full each month, that shouldn’t matter). The sign up bonus certainly isn’t as high as the first two cards on this list. I like that this card also has no annual fee, but you certainly don’t earn as many travel points for each dollar spent. It’s also a MasterCard instead of a Visa, which might be a plus or negative, depending on what you’re looking for.
    breakTo Apply: Click here
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  5. Discover It Miles Card
    Discover It Miles Card
    The Discover It Miles card is the Discover card for travelers! There are some really great benefits to having this card, but from my own personal experience, I would say just make sure if you use this card abroad, that you know beforehand that they will accept Discover! When I was in England/Germany, a lot of vendors just kind of stared at my card like they had no idea what it was…
    breakHighlights: As a new cardmember, your first year of points will be matched by Discover! That means that if you earn 20,000 points, Discover will give you another 20,000! You earn 1.5 miles for every dollar you spend (100 miles is equal to $1 at redemption, same as the other cards). Discover will pay you back, up to $30/year, for inflight wi-fi usage. If you don’t want to go anywhere, you can also redeem your miles as cash, direct deposited into your bank account. The Freeze It feature allows you to block any spending/transactions with your card if it becomes misplaced, and you can un-Freeze It when you find your card! And, your FICO score is sent on every statement.
    break APR: 12 – 24%
    Annual Fee: $0
    Credit Needed: Excellent credit needed to apply/be approved
    breakDownsides: Like I mentioned before, even though they boast a $0 foreign transaction fee, Discover isn’t accepted as widely as Visa or MasterCard outside of the United States! There is not a sign up bonus for points like there are with the other cards, so that could be a bummer (though your first year points are matched, so if you spend a lot, you might earn more).
    breakTo Apply: Click here

I have looked into credit cards quite a bit for traveling, as that is something I want to continue doing my whole life (time and money permitting). I hope you have found this post useful! If you want to do more research on the different types of credit cards out there, I personally like visiting creditcards.com. They have a huge resource to search through, and you can sort through what types of credit cards you’re looking for fairly easily.

The credit cards listed above are for general travel only. I am not affiliated with any of these companies! This was just some of the research I compiled for my fellow friends and travelers. If you’re interested in finding cards for hotels or specific airlines, there are cards for that too! I highly recommend visiting The Points Guy for insanely detailed posts about credit cards. While this is one detailed post, his entire website is filled with wonderful travel hacks and credit card information!

Credit Card Couple

Hopefully this post has shed a little bit of light on a very complicated topic. And hopefully you’ve also come to the realization that credit cards are not some evil pieces of plastic out to destroy your life. When used correctly, credit cards are a great way to earn free money and different rewards! Just remember to be smart about how you use your card and always make every effort to pay your card off in full at the end of each month! Now you’re on your way to earning some exciting redemptions…

What did you think? Did you find this post helpful? Are there other great travel credit cards that you highly recommend? Let me know in the comments below!

1 Comment

  1. Hi there,

    I am a future auxiliar de conversación in Spain and I have been reading through your blog all morning. Your posts (from getting a visa, to credit cards, to birth control) are just SO helpful, well-written and thought out, and inspiring! You are going to heaven my friend. Thanks for making the world a richer place.

    Chloe

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