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These Are the Top 3 Things to Know About Travel Credit Cards

summer, 2020, quarantine
AntonMatyukha on Deposit Photos

We’ve all been daydreaming of our next adventure while sitting at our computers all day. Even though the travel industry is currently at a virtual standstill, now may be a good time to look into travel credit cards. Not being able to travel shouldn’t be a reason to avoid taking advantage of some of the great benefits credit card companies are still offering.

Having a travel credit card can allow you to have a more enjoyable and affordable travel experience. Benefits may include skipping through airport security lines, access to exclusive airport lounges and free in-flight Wi-Fi, among others. But planning is key. The MONEY team studied and compared hundreds of travel credit cards, taking into account earning rates, sign-up bonuses, travel benefits and fees. Below, you will learn about some of the best travel credit cards for 2021.

What you need to know about travel credit cards

1. Beware of high Annual Percentage Rates (APR’s)

Use your card only if you can pay the balance in full before the next cycle begins. Otherwise, you may need to give up on the rewards and go with a credit card with a much lower APR, which is how much it costs you to borrow money.

Generous travel benefits are great, but don’t let them cloud your judgment. Stay within your budget. If you don’t, the cost of racking up long-term debt may outweigh the value of any “free” flight you earn.  

2. Don’t be afraid of annual fees

Even though our top travel credit cards charge high annual fees, they can be justified if you take advantage of your credit card’s perks and benefits. 

Let’s use Chase Sapphire Reserve’s $550 annual fee as an example. When you receive this card, you automatically get a $300 annual travel credit, a $100 credit toward Global Entry or TSA Precheck and airport lounge memberships worth around $429 (if paid for in cash). This sums to $829 in value. Plus, you still have to consider the sign-up bonus and the extra points you may earn making purchases. 

When you think of it this way, the annual fees some credit cards charge start to make sense.

3. Pair up multiple cards for max benefits

To maximize your spending, you may want to consider combining credit cards to get the most out of your rewards. 

For example, you can combine the Chase Sapphire Reserve’s 3x points on travel and dining with Chase Freedom Unlimited’s flat 1.5% back on non-bonus spending. 

The good thing here is that Chase allows cardholders to pool all their points in one account for redemptions. This means the cardholder’s Chase Sapphire Reserve account gets 50% more travel through the portal.

Travel credit cards and the COVID-19 pandemic

Credit card companies such as Chase and American Express have begun to extend eligible purchase periods, giving their customers additional time to earn their signup bonuses. Also, some companies are now providing additional bonus points for purchases made due to the pandemic. Examples include streaming services, food and grocery delivery. Cardholders need to check in with their credit card companies to learn which non-travel purchases qualify for bonus points. 

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