Travel Rewards: Which Credit Cards Are Best?

Travel Rewards: Which Credit Cards Are Best?

Posted on June 06, 2012

Travel season is here, and for the number-crunching vacationer, it's the optimal time to redeem travel rewards. Whether you just want to bag the best sign-up bonus, or pile on the points over a long period of time, here's a look at the 5 top travel reward credit cards available right now:

top 5 travel rewards credit  cards

Which travel rewards credit card is best for you?

Best Initial Bonus

Chase Sapphire Preferred

This card consistently has one of the best bonuses: you get $500 back towards travel expenses when you spend $3,000 in the first 3 months (it was up to $625 earlier this year, so they may be another promotion in the future). After that, you earn 2 points for every dollar spent on travel and dining, plus 1 point per dollar on everything else. You'll also get a 20% discount when you redeem miles for travel through their Ultimate Rewards program. For example, a $300 flight will cost 22,500 points, instead of 30,000.

Plus, Chase rewards your point-earning prowess with a year-end point dividend. You get a yearly point bonus equal to 7% off the points you earned over the past year, so if you earned 10,000 points in a year, Chase will hand over 700 free points at the year's end! For overseas travelers, another perk is no foreign transaction fees (which can add an extra 3% to your purchases abroad).

There is a $95 annual fee, but it's waived the first year. After that, if you spend at least $1400 in a year, your dividend bonus essentially covers the fee.

Chase British Airways Visa

Yep, you've probably heard us rave about this card before...and the deal ends tomorrow! Right now, you get 50,000 miles (called Avios) after your first purchase, enough for a round-trip ticket to Europe. Spend $10,000, and you earn another 25,000 miles, or spend $20,000, and you earn another 50,000 miles. On top of that, you're also still earning 1.25 miles per dollar spent instead of the standard 1 mile-to-$1 ratio offered by other airline credit cards.

After signing up and spending $20,000 (which gets you the bonus, plus 1.25 miles per dollar), you'll have 125,000 miles. This Avios Calculator shows you how many miles you'll need for your dream destination. For example, a one-way economy flight from New York to Rome will cost you 25,000 miles.

A common concern with this card is the fuel surcharges that can quickly ramp up costs when you're redeeming  your miles. We have  previous posts that offer some tricks and tips, like redeeming domestic flights on American, that help you maximize your miles. This is one of the best initial bonuses to bank on!

Best Ongoing Rewards

Capital One Venture

This is a straight-forward, no frills travel card. You earn 2 miles for every dollar you spend, making it one best miles-to-dollar earners and beating most other cards' measly 1 mile-to-$1 ratio.  Plus, you get 40,000 bonus miles (equivalent to $400 towards travel expenses) when you spend $3,000 in the first 3 months.

It's great for travel card novices due to its easy-to-track miles. Drop the last two 0's off your total miles to determine how much money you have for travel. For example, for every $1000 you spend, you earn 2000 miles, or $20 back towards any flight,  hotel room, etc. You can redeem miles before or after your trip, and it'll show up as a credit on your statement.

You can use the miles towards any travel expense, so it's also great for travelers who doesn't want to be tied to a certain airline or hotel brand. Plus, the miles don't expire.  This means you can accrue your miles over time without any looming deadlines or restrictions that come with other travel cards. You also get access to a  24-hour travel assistance service. Spend over $3,000 a year and you'll earn enough back to cover the $59 annual fee.

Discover Escape

This is another card that gets you 2 miles for every dollar you spend. Plus, for the first 25 months you get 1,000 extra miles each month that you make any purchase.  Normally you'd need to spend $500 a month to earn those points. Instead, you can the same points by simply swiping your card for an occasional cup of coffee! When you reach the maximum 25,000 mile bonus, you'll have $250 to use towards travel.

Like the Capital One Venture, the miles apply towards airfare, hotels, vacation packages, or car rentals, without brand restrictions or blackout dates. This card is great for the traveler who appreciates the little perks. Card members get free primary rental car insurance (with no deductible), lost or damaged luggage insurance (up to $1500), and travel delay insurance ($150/day for unexpected food and lodging expenses). There's a $60 annual fee.

Best Airline-Specific Card

Southwest Airlines Rapid Rewards Plus 

This popular Visa card from Southwest Airlines gets high marks for it's initial bonus and the easy ways to tack on extra points. After signing up, you earn 25,000 points after your first purchase, which equals around $416 towards airfare. You also earn 1 point per dollar on balance transfers during the first 3 months (up to 10,000 points, or around $166 towards airfare). Plus, each year on the anniversary of your card membership, you get an extra 3,000 points, which gets you around $50 towards airfare.

The initial bonus and these extra point perks are what set this card apart from it's competitors. If you sign up and charge one purchase, make the maximum balance transfers, and hold onto the card for one year, you're earning over $630 for airfare..without having to even use the card!

Aside from those bonuses, you earn 2 points for every dollar spent on Southwest airfare and Rapid Rewards hotel and car rental partners (which include Marriott, Hyatt, Best Western, and Hertz, to name only a few) and 1 point per dollar on everything else. On top of that, even though Southwest is a strictly domestic airline, overseas travelers can use their lesser-known "More Rewards" program to redeem Southwest miles towards international flights on other airlines! There is a $69 annual fee, but the yearly bonus on your cardholder anniversary almost covers that cost.

So whether you're piling on points for a dream trip to Paris, or managing miles to visit your Mom, there are lots of rewards cards that you can tailor to your travel style.  Got any tips and tricks of your own for reaping these rewards? Let us know in the comments below!

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