We last did this in 2013 and the travel, airline, and credit landscapes have changed so I figure it’s ripe for another go.
We travel multiple times a year and it’s only going to increase as we head towards retirement. We’ve got a travel credit card through our bank that gives us cash back and a few added benefits but I feel that we could do better, especially with the sign-on bonuses.
I’m reading the recommendations from The Points Guy and Motley Fool and it appears that Chase Saphire Preferred is a good option for us but I’m open to hearing from others. How did you evaluate which was the best card for your needs? Do folks change cards repeatedly to take advantage of the sign-on bonus?
Not sure what features you are looking for, but when I went on a road trip in 2022 I was digging through credit cards to find one that would be appropriate for the car rental so that I could get the complementary rental insurance.
Just to be sure, I called them up to verify that I would be covered and that started me on a long series of phone calls to various credit card issuers of platinum and diamond cards that I had around.
The upshot of this: in the past few years credit card companies have quietly discontinued their complementary rental insurance. Surely this was announced with great fanfare in ant-sized letters on some scrap of legalese that was printed on newsprint and mixed in with the junk mail.
I called my auto insurance provider and found that I was already covered for rentals so it was no issue for me and we went on the great road trip.
The Chase Sapphire Preferred has a $95 annual fee, so does it offer you that much in benefits? They also have a Sapphire Reserved card with a bonkers $550 annual fee.
Yes, but you get $300 of that back as a travel credit. You also get primary rental car insurance, trip cancellation insurance (which I just used), and many more benefits. Considering how much travel insurance has gone up recently it’s worth it to us.
So the key point here is “trust but verify”. If you believe you have that (or any other CC feature), before the day of the trip give them a call and get the current correct answer.
Essentially for any credit card you can choose between getting cash back, getting airline miles, or getting hotel points. Figuring out which of those is most valuable to you and which has the best “exchange rate” to the others is the problem to be solved.
Many airlines offer affiliated cards which deliver a pretty nice signing bonus of miles and/or deliver access to their airport lounges. But if you don’t fly much that’s useless.
Same for hotels. If you aren’t willing to stay within a single hotel brand group or you usually stay at mom’n’pop hotels or airBnBs, hotel points are mostly useless to you, even if some card delivers relatively a lot of them per fee paid or spend run through them.
So I’d start by asking the OP what they intend the card(s) to do for them.
I personally have a Chase Marriott Bonvoy-affiliated card that I use for most of my daily living purchases plus hotel stays, and two American Airlines-affiliated cards that came with a crap-ton of free miles, and an annual club membership. Which card(s) I also use for much, though not all, of my travel purchases. For a mere $800 in annual fees. And is totally worth it if you live in long haul airports like I do.
I have others, but these are the travel-related ones.
Usually the exchange rate is set by VISA or MC and is based on whatever the rate at the time of purchase and that rate is generally better than whatever the merchant offers you. I have not seen anything to indicate that it is more or less on any particular card if there is no foreign exchange fee which is where you see the difference in the rate between cards (if there is one).
Back to travel credit cards, I do not have any annual fee cards, so I cannot speak to the value of those but for general travel the bank of america travel rewards gives a cash back rate that is more if you have a banking relationship with them. The best value there is if you redeem the points for travel (and now restaurant purchases) rather than anything else.
For purchasing travel I now first turn to the credit card travel portals and if the price is competitive enough I will use them. Both Capital One and Chase offer 5% back if you book through them though in my experience Chase has had the best options. For car rental, the best value I found was through my Costco membership. I used their branded card as well which gives 3% back on travel but I do not know if it was required.
I did quite a bit of looking around for a good travel card recently. We ended up with two:
Capital One’s Venture X. $400 annual fee, but you get it back in $300 in rebates and $100 worth of points. So actual cost, as long as you use the card, is $0. Benefits include 2% back on everything, unlimited use of many airport lounges, and primary car rental insurance.
US Bank Altitude Reserve. You only get $350 in rebates for a $400 fee, so there is a $50 annual cost. More than made up for by a 3% rebate on all ApplePay (or GooglePay) purchases. Plus if you use your points to purchase travel through the US Bank site, points are worth $0.015, so your net rebate is actually 4.5 %. Also offers primary rental car insurance, and a more limited airport lounge access.
One important thing to compare between travel cards is whether their own travel sites are a good deal. My comparison shopping found that Capital One and US Bank both offered competitive pricing; Chase prices seemed a bit high.
Airline and hotel linked cards can be a great deal if you’re a regular customer. But otherwise, not.
And, in my opinion, any card that charges a foreign transaction fee is, by definition, not a travel card. Do read the fine print to confirm that.
Definitely, any card used for foreign travel must be one without a foreign transaction fee. Those used to be hard to find, but lately a lot of credit cards have announced they are getting rid of them. I’m sure they see it as an obvious competitive disadvantage to have one.
Specifically: I had a BofA Travel Rewards card for years when they were one of the few without a foreign transaction fee.
Then I got a Costco Citibank Visa. They never had a fee.
For many years I have had a Fidelity Investments Visa, but I didn’t use it abroad because it charged a fee. They just announced elimination of the fee.
We travel internationally 2-3 times a year, and I suspect that will increase over time. We use our current travel card for cash back, free foreign exchange fees, and rental car insurance.
Since we don’t fly on the same airline that frequently I’m not sure if an airline branded card would work well for us. I’ve been attracted to the cards that accrue points that can be used for any/most airline purchases through their service. I would like to hear from folks that use those if the system is easy to use to purchase flights.
I also feel like we would quickly use the sign-on bonus miles/points, and as long as it helps us with car rentals and foreign exchange fees anything additional is a bonus. Between flights, hotels, rental cars, and excursions we spend $20K/year so getting a multiplier on those points would be valuable to us. It sounds like airline lounges and other upgrades are getting harder to recieve without earning actual miles on specific airlines
Just some additional information on foreign transaction fees. Capital one and Discover do not charge one any of their cards (and haven’t for years). The Citi Costco one does not have one and neither does the Bank of America Travel Rewards. In general most of the ones with an annual fee don’t while no annual fee ones often do. You certainly need to check the credit card agreement though.
I thought that some of the travel cards covered the cost of a Clear membership. I don’t think the Chase Sapphire card does though. Clear is expensive at something like $200 annually so that might be a worthwhile benefit.
I don’t know if Discover charges a fee, but almost no one outside the US will take it. It’s not a good travel card. (I have a discover card, and usually check when I’m abroad. I don’t think I’ve been able to use it yet.)
It is true that you can’t use it many places overseas, but I have used it in Japan, and online with some foreign retailers. In both cases no transaction fee. I agree though that in general it is not a good travel card, I was just pointing out that they, along with Capital one, have not had foreign transaction fees for a long time. Also in the case of Discover, unless it explicitly says transactions in the US the 5% category applies to foreign purchase as well (I have used it for restaurants and gas).
How can a non-member look at the travel portals/sites? We have a few trips in the planning stages and if I can compare flight costs that would be a big help.
Another thing to note about the BofA card is that it’s one of the few USAian cards that work with European chip & pin terminals. Not sure how much that matters anymore; contactless cards seem to be replacing chip & pin. On our UK/Ireland trip last fall, we did not have a single occasion where we needed that function.