Travel credit cards are the cornerstone of traveling without spending all of your hard earned money or paid time off (PTO). But what exactly are they? I’m going to give an overview of what they are and how they work in this blog below. This is perfect for anyone looking to embrace budget travel or even just making your dollar go farther. (I’m a big fan of adding more rather than cutting things out.)

How do travel credit cards work? 

Most travel companies and banks offer travel credit cards. They are credit cards that will provide travel-specific rewards. 

The basics are: you apply for a card, get approved, spend money, pay it off every month, and get certain travel perks in the process. Easy enough right?

Well, kind of. Each travel card is different, but they can be grouped into categories.

Travel credit cards give you rewards in the form of points or miles depending on the card. Points and miles are just quantified rewards that can be redeemed in a variety of ways. You spend money, and get a certain number of points/miles depending on what you spent. From there, you can redeem these points/miles in different ways.

Travel Card Categories

General Travel Cards from Banks

They are offered directly from a variety of banks, and give rewards in the form of “points” (Chase, Bank of America, Wells Fargo, etc). 

Most of these types of cards have travel portals from your bank account that offer a way for you to book hotels/flights using whatever points you have earned. When you go to pay your card you’ll be able to find the portal and also see how many points you’ve racked up.

Another way to use the points is to transfer them directly to their ‘partners’ (hotel chains, airlines), and redeem the points in those portals as well (ex. www.united.com to get flights). Transferring to partners will get you the best deals, but I’ll cover this in a later blog.

Airline Travel Cards

These are offered directly from airlines (in partnership with banks) and give rewards in the form of “miles”. 

You’ll also be able to see how many miles you have in your credit card portal with these types of cards. However, to redeem them, you’ll have to log into your account on the airline’s website. Search for flights by selecting “miles”.

Hotel Travel Cards

These are offered directly from hotels (in partnership with banks) and give rewards in the form of “points”. 

You’ll also be able to see how many points you have in your credit card portal with these types of cards. However, to redeem them, you’ll have to log into your account on the hotel’s website. Search for nights by selecting “points”.

Travel Card Nuances

Most have a welcome bonus that’s awarded to you when you spend a specific amount in a specific timeframe (ex. $4,000 in the first 4 months of having the card). Some cards have welcome bonuses worth upward of $1,500 or more. This will give you the most reward for the card.

Most cards have annual fees, where you pay a certain amount to even be a card holder. 

This article explains what travel credit cards are in detail, which helps with the basics.

Let me be very clear: you must pay off your statement in full every single month for this to work. If you don’t you’ll lose all of your benefits in the interest you’re going to accrue and have to pay back. In case you want a refresher on best practices with credit cards, check out this article here.

Conclusion

I hope this gave you a good basic overview of what travel cards are. I find that most articles go too far in detail and scare people off, but I wanted this to be more approachable to help you get familiar with them. Feel free to dive into more detail with the links above. 

And to your natural question of, “there are so many out there, how do I pick one?”, don’t worry! I have another blog all about how to choose a travel credit card based on your own lifestyle and preferences here.