Travel Reward Credit Cards

How to choose a travel reward credit card...

If you like the idea of the money you spend on your weekly shop going towards a discount on your summer holiday, then read on.

Travel reward credit cards convert your spending into points for discounts on your travelling.

These cards are good for:

Initially designed for the avid jet setter to save money on flights travel reward credit cards are now more versatile, offering discounts on things such as hotels and day breaks as well. This means that there really is a card out there to suit everyone.

The following is a list of some popular types of travel reward credit cards that are currently available.

• Airline mile credit cards:
• Offer points for redemption with a specific airline. They can also give you perks such as priority check ins, VIP airport lounges, upgrades and special offers.
• Hotel travel reward credit cards:
• Allow you to earn points to use with specific hotel chains. They offer free nights at their hotels, as well as perks including, priority check in, car hire and airport parking.
• General travel reward credit cards:
• Often offered by credit card companies with no specific ties to travel companies. Instead they partner up with a range of travel companies offering different services.

To get the most out of your travel reward credit card you have to be able to fulfil a few simple, but important objectives.

1. Travel frequently:
   If you are often flying with a certain airline, or staying at a specific hotel, look for a travel reward card from that specific company and you could receive benefits, such as free hotel stays, priority check in, upgrades and general savings that you would have previously had to fork out for.
2. Spend a lot:
   To make the most of these cards you need to transfer all of your everyday spending over to them (petrol, food shopping etc) to capitalise on the benefits. The more you can spend on these cards means the more points you will rack up.
3. Pay back the balance:
   It's all very well to spend a lot - I'm sure most of us are more than capable of racking up huge credit card bills - but if you don’t pay back all your spending at the end of every month then the hefty interest rates on these cards will quash any rewards you have earned.

These cards are unsuitable for:

The answer in short is anyone who doesn't fit the bill for the above.

If you rarely travel would be the initial reason not to get one of these cards. Don't feel disheartened though, check out the right type of card for you in our cash back reward and retail reward sections.

If you are a frivolous spender with a terrible ability to repay the money you owe, then these cards and indeed any reward credit card, is likely to bleed you dry and leave you with hefty interest rates for late repayments. See our section on low purchase rate credit cards instead.

Equally, if you spend very little, or are dead set on using cash or a debit card for purchases then you probably won't make enough points to get a worthwhile discount.

Look for:

What services you require and what rewards you would like to earn. As mentioned above, different companies offer different benefits depending on the area they focus on.

You need to choose a travel reward credit card that will allow you to earn points on services you use. There is no point in choosing a Hilton Hotel Honours credit card if you are a frequent flyer with a private villa. Respectively, there is no point choosing a card that offers rewards you won't use.

Once you're decided on the type of rewards you'd like and the type of service you use, you need to work out how much you are actually going to earn with each credit card. Points need to be looked at in 2 ways to make sure you are going to get the most out of them.

1. How many points will you earn:
   Companies don't give out points equally. Some may give you extra points for flying on their airlines, or using their hotels. Choose a travel reward credit card that you can maximise your points earning on without going out of your way with your typical spending.
2. What are your points worth:
   Loyalty point's schemes are often worked out in confusing convoluted ways to disguise the amount you are actually saving. Work out the actual amount each individual point is worth in monetary form to calculate how much you are actually saving. For example: If Mr Smith has 4,000 airmiles and each airmile is worth 8.55 pence then he has earned approximately £342 worth of rewards.

Now that you've narrowed the choices down, the crunch choice of which travel reward credit card to get could be decided by the small added extras.

Check whether or not the travel reward credit card offers you any benefits. Hotels may give you free gym membership; flight companies may give you upgraded seats. These could be a deciding factor if they are things you will use.

It may also be worth checking the cards typical APR. Even though repaying your balance is the golden rule that mustn't be broken, a low APR will be a softer blow if you do accidently forget a repayment.

Watch out for:

- Annual Fees
These are fees that have to be paid every year just for having the account. Travel reward credit cards, as with many reward credit cards sometimes have annual fees.

There is often a forewarning of this in the APR. A card showing 5% more APR than another card, but with an similar purchase interest rate should ring alarm bells, as the APR will be artificially inflated by annual charges.

- Expiry dates and upper points limits
Most companies will have a time limit, within which all your current points must be used, and an upper maximum number of points you can earn at one time. This is to obviously stop you hoarding your points so that your grandchild can have an all expenses paid world cruise with a personal butler.

Make sure you are aware of the limits imposed upon you so that your hard earned cash wasn't all in vain.

- Points scheme trickery
As mentioned above points are worth different amounts. Make sure you are aware of how much each company's points are worth.

Don't forget:

- You can only earn points on card purchases
As with most reward credit cards, cash withdrawals will not earn you points and will more than likely incur higher interest rates and handling fees.

Use a debit card for withdrawals no matter how tempting that kebab looks from the cash point.

Compare travel reward credit cards