How do travel reward credit cards work?

Travel rewards credit cards earn rewards every time you use them for purchases. These rewards are referred to as either points or miles, and you can redeem them to pay for travel. The ways that you can redeem your travel rewards depend on the specific travel card that you have.

What should I look for in a travel credit card?

To pick the best travel rewards credit card in 2020, look for the following: Travel rewards that you can easily use to book the travel you want. A competitive rewards rate, ideally with bonus rewards in areas where you have high spending. Benefits that save you money and get you a higher-quality travel experience. An annual fee that you can afford.

What credit score is needed for a travel rewards credit card?

To get any of the top travel rewards credit cards, you should have a FICO® Score of 670 or higher. Most travel credit cards are aimed at consumers with good credit. It will be hard to get approved if you haven't yet reached that credit score range.

Best Travel Rewards Credit Cards of January 2021

Travel rewards credit cards are some of the most popular cards on the market, and it's easy to see why. If you're a frequent traveler, then a good travel credit card can provide plenty of value through the benefits and rewards it offers. Even if you're not exactly a jetsetter, there's still a lot to like about using credit cards to earn points you can use to pay for your vacations.

The best travel credit cards will save you money and upgrade your travel experience. It's just a matter of figuring out which travel card fits your lifestyle. Maybe it's a credit card with airport lounge perks, or the one that gets you lots of bonuses on your hotel stays. If you're trying to keep costs down, there are also some great no-annual-fee credit cards for travel.

Part of choosing the right card is knowing about the travel credit card offers that are currently available. You'll find them all on our list of the best credit cards for travel rewards in 2020.

The Ascent's picks for the best travel rewards credit cards:

Sign-up bonus and points transfers: Chase Sapphire Preferred® Card
Premium travel: Chase Sapphire Reserve®
No annual fee and bonus: Discover it® Miles
Travel and restaurants: Citi Premier® Card
Dining and U.S. supermarkets: American Express® Gold Card
Airport lounges: The Platinum Card® from American Express
No annual fee: Bank of America® Travel Rewards credit card
Business travel: Chase Ink Business Preferred℠ Credit Card
Sign-up bonus: Capital One® Venture® Rewards Credit Card
No annual fee: Capital One® VentureOne® Rewards Credit Card
No annual fee: Wells Fargo Propel American Express® card

Ratings Methodology

When used correctly, the top travel credit cards can be game-changers. Depending on the travel rewards card, you could use its rewards to cover your airfare, hotel, vacation rental, or potentially any other type of travel expense. And many of the best travel cards of 2020 also pack in lots of extra perks, such as spending credits towards travel purchases or elite status with airlines and hotels.

You may find there's a bit more of a learning curve involved with travel cards than other types of credit cards. Cash back credit cards are self-explanatory, but this isn't always the case with travel credit cards. In this guide, you'll gain a better understanding of how travel cards work and how you can find the best travel credit card for you.

How do travel rewards work?

Travel credit cards earn points when you use them, and you can redeem those points for travel purchases. Exact redemption options depend on the credit card and its type of travel rewards. Some travel credit cards let you redeem points at a fixed rate towards cash travel purchases, while others offer travel points you can use with specific loyalty programs. Many of the best credit cards for travel offer both options.

When should I consider a travel credit card?

Travel rewards cards are a good idea if you normally travel at least two or three times per year. By traveling regularly, you can take advantage of the perks a credit card with travel rewards offers.

As a general rule, the more you travel, the more value you'll get from a travel credit card. If you usually go somewhere every two or three months, then any of the best credit cards for traveling could save you a lot of money, even those that have high annual fees. If you're an infrequent traveler, then a cash back card may work out better for you.

What credit score do I need for a travel credit card?

You need good credit, meaning a FICO® Score of 670 or higher, for most travel credit cards. Although it's possible to get a travel card with a lower credit score, you'll have lower approval odds. If you don't have good credit yet, it makes sense to first improve your credit score so that you can qualify for the best travel rewards credit cards.

How should I choose a travel rewards card for 2020?

Here’s what you should look for:

Useful travel points. The best travel rewards cards are often those with the best travel rewards programs. Look for points that are both easy to redeem and offer a solid redemption value. Versatile travel cards with transferable points that you can send to different airlines and/or hotels are a popular choice. You could also opt for a card with an airline or hotel you use often or one with points you can redeem at a fixed rate.
Competitive rewards rate. The value you get from your travel rewards card depends in large part on how many points you earn. The best travel credit cards of 2020 include cards with high flat rates on every purchase and others that offer more back in specific bonus categories. Either can work out well depending on your spending habits.
Valuable extra perks. These benefits often separate the best travel cards from the ones that aren't worth your time. As you check out what different travel credit cards offer, consider which perks will save you the most money or improve your travel experience. For example, free checked luggage is great if you always fly on the same airline and check a bag. But if you're not loyal to one particular airline, it's better to go with a perk you could use more often, such as a Global Entry credit or airport lounge access.

How to get the best travel rewards credit card for January 2021

The best travel reward credit cards have lots to offer, but to get maximum value, you need to find the card that best matches your habits. Here's how:

Figure out how you will redeem your travel rewards. This depends on the travel you intend to book. If you're loyal to one airline or hotel, then you could look for its best travel card. If you want to keep your options open, then the best travel points credit card for you is one in a rewards program that offers multiple ways to redeem your points.
Compare how many points you'd earn with different cards. The main factor to look at is the rewards rate on each card. You may want to use your budget to calculate how many points you'd earn per month with a few of the top travel credit cards of 2020. It's also important to factor in any sign-up bonuses since those can provide considerable upfront value.
Review each card's annual fee and benefits. These two items go hand in hand, as many of the best cards for travel have both more expensive annual fees and more valuable perks. You just need to see which card offers the most value based on the benefits you'll use compared to its annual fee. Or, if you don't think you'll get much use out of travel perks, the smart choice may be to get a free credit card.

Those steps should help you to pick out your personal best credit card for travel, or at least narrow it down to a few high-quality options. The only thing left to do is apply for the travel points credit card you want.

What are the types of travel rewards credit cards?

1. Fixed rate. Travel points are redeemable at a fixed rate (often, but not always $0.01 per point) towards cash travel purchases. You can typically use your points to book travel through the card issuer's online travel portal or redeem them as a statement credit towards previous travel purchases.

2. Hotel. The credit card earns points in a specific hotel's loyalty program, and you can use those points to book award stays. Hotel credit cards often include special benefits with the hotel, such as complimentary upgrades.

3. Airline. The credit card earns points in a specific airline's loyalty program, and you can use your points to book award airfare. Airline credit cards often include special benefits with the airline, such as free checked baggage.

4. Transferable. Travel points are transferable to loyalty programs of the credit card's travel partners. These partners may include airlines, hotels, and/or other travel providers. After you transfer points, you can use them to book award travel with that provider.

Choose the best credit card for travel rewards

The most important part of a travel rewards card is that it has points you can use to book the travel you want. In terms of versatility, the best travel rewards cards are fixed-rate cards and transferable points cards as they have plenty of options for redeeming your rewards.

What credit card companies have the best travel rewards programs?

1. Chase. The Chase Ultimate Rewards program has over a dozen travel partners, including major domestic airlines, international airlines, and popular hotel chains. But what gives it the edge is that you can also redeem points through the Chase travel portal at a rate of either $0.0125 or $0.015 per point, depending on which Chase credit cards you have. In our view, that makes Chase Ultimate Rewards points the most valuable.

2. American Express. The American Express Membership Rewards program has the deepest roster of airline and hotel partners of any credit card company, which is great for transferring points. If you have one of the card issuer's best travel rewards cards, you can also redeem rewards at a fixed rate of $0.01 per point through American Express for certain types of travel purchases.

3. Citi. Like the two programs above, the Citi ThankYou Rewards program lets you either transfer points to its travel partners or redeem them through its travel portal (at a rate of $0.01 per point). The reason it ranks third is that its travel partners aren't quite as impressive as those of Chase or American Express. Both those credit card companies have partnered with one or more major domestic airlines, whereas Citi's only domestic airline partner is JetBlue.

How to compare travel rewards credit card offers

Finding the best travel credit card in 2020 relies in large part on finding the credit card company with the rewards program you like the most. Here's how you can do that:

1. Review each credit card company's travel partners. You will get the most potential value if you transfer your travel points to make an award booking with the airline or hotel. It's possible to get over $0.03 per point through transfers, much more than you'd get redeeming points at a fixed rate. Each credit card rewards program has its own travel partners. Look for one with airlines or hotels that you use regularly so it'll be easy to redeem your points.

2. See how much points are worth toward cash travel purchases. You may not always find good travel deals you can book by transferring points. That's why fixed-rate redemptions are a nice backup plan. Ideally, you should be able to redeem rewards for at least $0.01 per point towards travel, and the more value a rewards program offers, the better.

3. Check out each company's best credit cards for travel rewards. Rewards programs are important, but so are the travel cards themselves. Make sure the credit card company has a card with the features you want at a reasonable annual fee.

How much is a point or a mile worth?

You can usually get at least $0.01 per travel point or mile, but this varies significantly depending on the travel rewards program. Some rewards programs have redemption options that can get you over $0.03 per point. On the other hand, there are also certain types of travel rewards where it's difficult to get even $0.01 per point.

Other options to consider for travel

Personal loan

It's usually not a good idea to borrow money to travel, but there are rare exceptions. If it's an emergency or there's an important event that you can't miss, then applying for a personal loan is a way to pay for your trip. With good credit, you can likely get a better interest rate on a personal loan than you would by using credit cards.

Savings account

Besides redeeming points from a travel rewards credit card, the next-best option to pay for travel is with your savings. You may even want to open a savings account specifically for your travel fund and deposit money into it every month. That way you can pay for trips upfront instead of going into debt.

FAQs

Travel rewards credit cards earn rewards every time you use them for purchases. These rewards are referred to as either points or miles, and you can redeem them to pay for travel. The ways that you can redeem your travel rewards depend on the specific travel card that you have.
To pick the best travel rewards credit card in 2020, look for the following:
- Travel rewards that you can easily use to book the travel you want.
- A competitive rewards rate, ideally with bonus rewards in areas where you have high spending.
- Benefits that save you money and get you a higher-quality travel experience.
- An annual fee that you can afford.
To get any of the top travel rewards credit cards, you should have a FICO® Score of 670 or higher. Most travel credit cards are aimed at consumers with good credit. It will be hard to get approved if you haven't yet reached that credit score range.

The Picks
Card	Rating	Great For
Chase Sapphire Preferred® Card	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: Sign-up bonus and points transfers
Chase Sapphire Reserve®	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: Premium travel
Discover it® Miles	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: No annual fee and bonus
Citi Premier® Card	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: Travel and restaurants
American Express® Gold Card	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: Dining and U.S. supermarkets
The Platinum Card® from American Express	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: Airport lounges
Bank of America® Travel Rewards credit card	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: No annual fee
Chase Ink Business Preferred℠ Credit Card	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: Business travel
Capital One® Venture® Rewards Credit Card	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: Sign-up bonus
Capital One® VentureOne® Rewards Credit Card	Rating image, 4.5 out of 5 stars. 4.5 stars	Great For: No annual fee
Wells Fargo Propel American Express® card	Rating image, 5.0 out of 5 stars. 5.0 stars	Great For: No annual fee