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Why You Should And Shouldn’t Get A Travel Credit Card

Why You Should And Shouldn’t Get A Travel Credit Card Posted on October 25, 2019Leave a comment

If you’re a travel junkie, you may be thinking it’s time to sign up for a credit card that allows you to travel cheaper. There’s many cards out there that give you flight, hotel and rental rewards – but is it worth it? Let’s look into it a little more.

Why You Should

  • Sign up bonuses: get a head start on your travels with a $500 or more sign up bonus. What can you do with $500? Well, most roundtrip tickets would be covered, or go crazy and rent that Mercedes while you’re in California! This is a big advantage for those considering getting a travel rewards card.
  • Less expenses on your trip: no need to cram everything into your carry-on, because your card may give you a free carry-on (or reimburse you for it). Wanna chill in the airport lounge? Renting a car? The perks of a travel card may give you these things. Not too shabby.
  • Every purchase is gearing you up for your next trip: daily life expenses are giving you points toward your next vacation. Don’t have enough to visit mom and dad this summer? Well, keep swiping that card – every dollar you spend, you’re that much closer.
  • Avoid the foreign transaction fees: they add up fast. Don’t worry about using your card out of the country because no extra expenses when it comes to fees.
  • Loyalty points: buying a plane ticket or hotel room an earn you more loyalty and miles. Use the right credit card and you’ll earn even more.

Why you shouldn’t

  • Annual fees: while not all of the travel cards charge annual fees, the good ones do. And honestly, paying $95 a year is kind of annoying. You’ll be limited in finding a travel rewards card that doesn’t charge an annual fee.
  • Sign up bonus requirements: yes, getting $500 or more for a bonus seems nice, but not when you have to spend thousands of dollars to reach it. That could add more debt to your finances. Is it worth it?
  • If you’re not traveling often, forget it: unless you’re constantly traveling, it may not be worth it for you. If you’re not using it regularly, you may break even with the fees associated with the card. Infrequent travelers are more likely to get more total rewards from a cash-back card with no annual fee.
  • Cash back is simply better for most: like stated above, unless you’re always traveling, cash back will be more beneficial to you. With cash back, you can use your rewards on whatever you want.
  • Higher interest rates: NerdWallet says, “If you regularly carry a balance from month to month, a travel credit card — or any rewards credit card — probably isn’t your best choice. The interest you pay is eating up the value of your rewards.” A low-interest card may be best for you.

Ultimately, if you’re an avid traveler for either work or luxury – a travel rewards card will probably suit you best. However, for those who don’t travel frequently, cash-back reward card makes a lot more sense. Plus, you’ll get more reward value with a cash-back reward card. Regardless, take into consideration whether it will be worth it for you, because every time you apply for a card, it effects your credit score.

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