Points. Miles. Rewards. If you’re in the market for a new travel credit card, then chances are you’ve seen these terms before. But what do they mean, how do you earn them, and why do they help you save money?
And if you talk to anyone who uses a rewards credit card regularly, chances are you’ve heard some not-so-subtle bragging about free flights or hotel stays. But maybe you think you don’t have the money or the credit to get started in this hobby?
Think again, because there are card options for travel credit card beginners that don’t have steep annual fees, require near-perfect credit, or involve a ton of complicated restrictions. Those free flights and hotel stays are within your reach, too — if you choose a travel credit card that aligns to your spending habits. Here’s what you need to know.
What to look for in your first travel credit card
At a basic level, all travel rewards credit cards work the same way. Every time you use the credit card, you earn points or miles that you can redeem for travel, merchandise, or cash. Some cards reward points or miles based on spending in certain categories, such as booking flights or eating out. Others offer the same reward structure no matter what you spend your money on.
The first thing you should know is that travel credit cards aren’t always easy to qualify for. If your credit history is thin or you occasionally pay your statement balance late, getting approved could prove difficult. But more on that later.
Second, take the time to review each credit card’s rewards and travel partners because they don’t all offer the same perks. In other words, if you’re a loyal Marriott customer but the card you’re eyeing partners with Hilton, you might want to reconsider.
Next up is your payment history. If you typically pay your statement balance in full, that’s helpful because interest charges won’t offset the value of your rewards. If you occasionally carry a balance and have good credit, you’ll want a lower APR (annual percentage rate) — just in case.
In short, you’ll need good credit, a card with the right perks, and the lowest possible interest rate in case you have to roll your balance from month to month.
Everything still sound good? Excellent! Let’s move on to the good stuff.
The 5 best starter travel credit cards
As promised, here are our top picks for the best travel credit cards for beginners:
|Card||Annual Fee||Bonus||Key Travel Perks|
|Chase Sapphire Preferred||$95||Earn 60,000 points after spending $4,000 on purchases in the first 3 months||
|Capital One® Venture® Rewards Credit Card||$95||Earn 50,000 bonus miles after spending $3,000 in the first 3 months||
|Capital One® VentureOne® Rewards Credit Card||$0||Earn 20,000 bonus miles after spending $1,000 in the first 3 months||
|American Express Gold Card||$250||Earn 35,000 Membership Rewards points after you make $4,000 in purchases within the first 3 months||
|Chase Freedom Unlimited||$0||Earn a $150 cash back bonus after spending $500 in the first 3 months||
Chase Sapphire Preferred
Chase built the Sapphire Preferred travel credit card for a beginner audience, and it’s easy to see why consumers like it. Cardholders earn 5X on Lyft rides, 2X points on eligible dining and travel, and 1X points per $1 on all other eligible purchases. “Travel” can include things like Uber and tolls.
The Sapphire Preferred also offers robust travel-specific benefits: Think purchase and extended warranty protection, plus travel-related insurances not offered by other issuers at this level.
Best of all, Chase Sapphire Preferred cardholders also get access to Chase’s popular Ultimate Rewards program. Chase Ultimate Rewards is your gateway to trading your points for loyalty program rewards. You can also find deals on retailer gift cards or redeem your points for cash.
Capital One Venture Rewards
Capital One’s customers are in it for more than this card issuer’s fun ad campaigns (hello, Vikings!). The Capital One Venture Rewards takes a lot of the hassle out of rewards cards with one simple feature: the purchase eraser.
The concept is pretty simple. Book travel with the card and, at your request, Capital One will redeem your miles and apply a statement credit. Easy! Plus, unlike other credit card rewards programs, there’s no redemption minimum. That means if you really want to trade miles to pay for your $5 airline headphone purchase, you can do it.
The fun doesn’t end there. You’ll also get 2X miles on every purchase, every day.
If you’re thinking that Capital One must charge a hefty annual fee to give away such rich rewards, think again. You'll pay an annual fee of just $95. You’ll also get a TSA PreCheck or Global Entry registration reimbursement — valued at $85 or $100, respectively. Already have it? Apply it toward a family member or friend’s fee instead.
Capital One VentureOne Rewards Credit Card
Wait a minute, you may be thinking. Didn’t I just read about the Venture card? Yes — and no. Capital One has two entries for the best beginner travel rewards cards. The VentureOne Rewards shares many of the same features with its Venture Rewards cousin, such as the purchase eraser as well as travel and auto insurance protection. But there are two important differences that make this credit card a better choice for some applicants.
Here’s the first: The VentureOne Rewards Credit Card doesn’t have an annual fee, which is a nice perk in the rewards card space.
Another key difference is that new VentureOne Rewards cardholders get 0% APR on purchases during the first 12 months. In year two, the APR range on the VentureOne is lower than the APR range on the Venture Rewards. That means if you roll a balance, you could pay less interest with the VentureOne.
With such amazing perks, why would anyone choose the Venture Rewards? The answer is simple: the Venture Rewards gives you 2X miles on every purchase, every day. With VentureOne Rewards, you’ll earn 1.25X miles on every purchase, every day.
So, for everyday purchases, the Venture Rewards comes out on top. But if you don’t want to spend money on an annual fee and have a big upcoming purchase that you want to pay off interest-free over time, the VentureOne Rewards Card might be right for you.
American Express Gold Card
Ok, it’s true: the American Express Gold Card does have a $250 annual fee — but keep reading. Like with Capital One, Amex cardholders get flexibility, as cardholders can also apply points to past purchases, redeem points for merchandise or gift cards, or exchange for cash. But if food is important to you — and we’re going to assume it is — the benefits are pretty amazing.
First, the basics. The American Express Gold Card is a charge card, and cardholders can redeem points in the well-known Membership Rewards program. Not familiar with Membership Rewards? Well, for Amex cardholders, it’s the bible of points redemption catalogs. Among other benefits, Amex lets you transfer points to 21 travel partners, which include some of the world’s most prestigious airlines and hotels.
But here’s the kicker: The American Express Gold Card now offers 4X Membership Rewards points at U.S. supermarkets (up to $25,000 per year) and at restaurants worldwide, 3X on flights booked directly with airlines or on Amextravel.com, and 1X on all other eligible purchases — so whether you dine out or eat in, you’ll earn a nice return. You can also get up to $120 in statement credits when you dine at Amex partner restaurants that include Shake Shack and The Cheesecake Factory.
If fully redeemed, the Amex Gold’s annual statement credits — which include a $100 airline fee credit — add up to $220, covering nearly half of the $250 annual fee. Is anyone hungry?
Chase Freedom Unlimited
If you like no annual fee, hate tracking rewards categories, and still want to earn a decent return on your spending, check out the Chase Freedom Unlimited.
Freedom Unlimited cardholders get one penny per point when they redeem through Chase’s Ultimate Rewards portal — not too great when you compare it against the Sapphire Preferred, which pays 1.25 cents per point when you redeem for travel through Ultimate Rewards. The good news is that you can combine the points from multiple Chase cards into one Ultimate Rewards points balance, which can pay off huge.
Confused? Don’t be. Here’s how it works: Let’s say you have the Chase Freedom Unlimited and the Chase Sapphire Preferred in your wallet, and you’ve accumulated points on both. The Sapphire Preferred’s points are worth more than the Freedom Unlimited’s. But with the Ultimate Rewards portal, you can redeem the Freedom Unlimited’s points at the higher Sapphire Preferred rate.
One last tip about travel cards
Remember the credit score caveat I mentioned earlier? It’s important because travel credit cards usually require at least a “good” credit score of 680.
If your credit score is below 680, you’ll want to improve your credit score before you apply. The best way to raise your score is to always pay your bills on time. Pay in full whenever possible. Avoid maxing out your credit cards — in fact, keep your balances below 30% of your total available credit. Lastly, don’t open too many cards at once and keep your old accounts open, even if you don’t use them.
The bottom line? With responsible money management habits and the right rewards credit card, you can get access to incredible discounts on travel or redeem for merchandise or cash. And next time your friend brags about their next vacation, you can share a tale or two of your own, too.
#1 Travel Rewards Card
- 60,000 point sign-up bonus
- 5X points on select streaming services (up to $1,500) from July 1, 2020 to September 30, 2020
- 3X points with Instacart (up to $3,000), and at gas stations (up to $1,500) from July 1, 2020 to September 30, 2020
- 2X points on eligible dining and travel purchases
- 25% more value when redeeming rewards for travel through Chase Ultimate Rewards
- Premium travel protection benefits