Should You Bother Getting a Travel Rewards Credit Card in 2021?

Travel cards make sense when you're jet-setting a lot. But should you apply for one this year?

If you travel a lot, opening a travel rewards credit card is generally a smart move. Many of these cards offer extra points or miles when you use them to book flights and hotel stays, and often, you'll get perks like free checked bags, priority boarding, and some degree of coverage if your travel plans are interrupted or canceled.

But this year, a lot of people are cutting back on travel due to the pandemic. With coronavirus cases holding steady and a slow start to vaccine rollout, it's unclear what the travel landscape will look like in 2021. So is now a good time to apply for a travel rewards credit card? Answer these questions to find out.

1. Will I be traveling anyway?

This may not be the year when you take three vacations. But if you have family members in another part of the country, you may have to travel some, whether you want to or not. If that's the case, the right travel rewards card could result in significant savings.

2. Will I pay an annual fee?

Many travel reward cards charge an annual fee that can vary from modest to quite substantial. If you're not sure how much you'll use a travel card this year, you may want to avoid those that cost a lot. For example, paying a $250 annual fee doesn't make sense if your travel plans are iffy and you're not sure you'll rack up enough points or miles to make that fee worth it. On the other hand, if you're offered a no-fee card or one whose fee is waived for your first year, it could be worth signing up.

3. Does the travel card I'm looking at offer other perks?

A number of travel card issuers have stepped up their game on the rewards front in light of changing travel habits during the pandemic. Even if you're not planning to fly anywhere this year, you may find a travel card that offers generous cash back or points for gas fill-ups, restaurant meals, and grocery purchases -- things you may be spending a lot of money on. It pays to do some research and see what perks cards are offering right now.

What's the right move for you?

Any time you open a new credit card, you do two things -- cause a hard inquiry to land on your credit report, and open the door to more spending. The first isn't such a big deal as a one-off event, because a single hard inquiry generally only drops your score five to 10 points. But opening too many credit cards within a short time frame is more of a problem, so before you rush to get a travel rewards card this year, make sure that's a good move. And if you do get that card, don't take it as an invitation to charge up a storm. Given that the pandemic has impacted so many people financially, the last thing you need is a pile of credit card debt at a time like this.