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If you do a lot of traveling, whether for business or for personal enjoyment, having the best travel credit card to suit your personal travel style allows you to take advantage of some great rewards and savings.
Travel Rewards
Many credit cards offer travel rewards, like miles for flights or points for hotel stays in exchange for using the card. If you tend to spend a lot of time in airports and hotels, these rewards might pay off for you, but not if the interest rate on the card is significantly higher. To determine whether or not you are getting a good offer, determine how much you are paying in additional interest versus the value of the reward offered. For example, if you get a free hotel stay for every $2000 you charge on the card, but the interest rate is 30% and it takes you a year to pay it off, you'll end up paying much more in interest than you would save on the cost of a hotel room.
Reward Limits
Be sure you review your current credit card agreement and understand the details of your reward program. Don't hesitate to switch credit cards if you feel you are no longer receiving adequate compensation. The below scenarios can help you determine whether you should switch to another card:
- Rewards, like mile flights, may be limited to certain periods of time. If these times are not convenient for you or don't work with your travel schedule, you may be better off finding a credit card with an extremely low APR.
- The amount of points or miles you earn may not be enough to outweigh the cost of using the credit card, unless you plan to pay it off every month. Be sure you note how much you are paying in interest each month and whether or not the rewards you are earning exceed that amount.
- If you miss a payment or make a late payment, your rewards might be penalized. Be sure you are aware of all of the rules concerning your credit card and the associated programs.
Credit cards with low APR allow you to use money on credit but pay back the amount you use more quickly. The lower the APR, the less it will cost you in the long run to borrow money. Try to find a balance between the cost of borrowing money and the rewards you are trying to earn. Never choose a card that offers rewards that are of little or no use to you. Be aware of any monthly or annual enrollment fees.
Choosing the Right Card
The right card for your travel needs depends on how you use your credit card and how often you travel. Don't be afraid to shop around, and be willing to switch cards and reward offers if you find a card that is a better match.
