We all travel differently, so there are many things to consider when choosing a travel credit card. Find the right travel credit card that works for you with the help from our guide below!
If you are a frequent traveller, getting a travel credit card can make a real difference for your wallet. But in a market saturated with options, it can be difficult to decide which card might suit you. Each company seems to offer the same promise: free travel in exchange for spending money. In reality, it’s not that simple. The number of rewards you can reap will depend on what you buy with your money and how much you actually spend annually.
Some Factors to Consider When Deciding on a Travel Credit Card
1. Your spending habits
What do you spend money on? Each travel credit card has a different reward system. While most cards will give you a set amount of points for every dollar spent, typically points will be multiplied when you use the card for select purchases. For example, the American Express Cobalt rewards 5x the points to its cardholders when they buy food and drinks, and 2x for spending money on travel and transportation.
2. Where do you spend your money?
Abroad? There are some travel cards that target consumers who purchase in foreign currency. Are you planning to use your card while travelling out of the country? If so, the Scotia Passport Visa Infinite might be right for you, since it doesn’t charge the typical 2.5% for foreign currency purchases (just the exchange rate applies).
Where exactly do you shop? Do they accept credit? It’s also worth considering the exact establishments where you plan to use your card. For example, if you spend $200 a week at your local grocery store, it’s a good idea to check what kind of cards the store accepts. American Express is a popular company for travel credit cards, but stores commonly accept just Visa and Mastercard.
3. How much money will you spend?
This factor is crucial when choosing a travel credit card, since it could determine whether the promise of a credit card will pay off for you. Most cards with a comprehensive points system require an annual fee, typically about $100-$150 a year. If you won’t be charging substantial costs to your card, the amount of points that you will accumulate might not even cover the fee. Essentially, heavy spenders can justify more cards with high annual fees.
Luckily, many cards come with a generous amount of welcome bonus points when you sign up, meaning that you can try the card risk-free. For example, my Scotiabank AmEx Gold card has a $100 annual fee, but upon signing up I received 25,000 points (if I spent $1,000 in the first three months). I eventually was able to cover the cost of an international flight with these points.
4. What benefits are you looking for?
A final point to consider when choosing a travel credit card is exactly what kind of benefits you are looking for. From flight discounts to VIP lounge access, benefits differ for each card. If you find yourself at airports a lot, you might want to consider something like the BMO World Elite Mastercard since this card includes a membership to select airport lounges.
Travel insurance is also a major benefit that is included with many travel credit cards. This may include emergency medical coverage, baggage insurance, and trip cancellation. It’s always a good idea to charge transportation expenses to your travel credit card, since you wouldn’t be able to claim some insurance benefits otherwise.
Picking Your Best Travel Credit Card
There’s likely a travel credit card that’s right for every consumer. But the card my middle-aged father uses versus the card that I as a millennial have are very different. We spend our funds in different ways, and we want different benefits from our cards. I’m not fussed over airport lounges and I don’t need hotel discounts because I rarely stay in them. I’d prefer to have points that I can use for airfare, and I like collecting points on food purchases.
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Disclaimer: Information correct as of October 28, 2018, obtained from American Express, Scotiabank, and BMO. Always check the latest guidelines before signing up for a credit card or booking a trip.