When choosing a vacation credit card, it’s best to first determine what you would like to do with the card. Do your vacation dreams take you to a destination far away? Or are you looking to escape to a locale closer to home (yet distant enough)? Do you want flexible spending or are you determined to earn a free plane ticket? Will a complimentary hotel stay be your goal?
These questions and more should be asked when considering the pros and cons of airline, hotel, or travel rewards cards. The choices are many but you’ll want to focus your energies on one. But which one?
Finding the Card
Overall, there are three types of vacation cards to mull over. A case can be made for or against each, but ultimately, you’ll want to choose the card that best matches your vacation goal(s). If you want to fly to Hawaii, an airline credit card might be the best bet. If you wish to stay at a resort one balmy weekend in July, then a hotel credit card would do nicely. And if you’re uncertain how you want to spend your points, but know you’d like a show for your spending efforts, then a travel rewards credit card might just be the “ticket.”
Travel Rewards
Travel rewards cards work similarly to general rewards cards. Points are earned on purchases and until used, accrue in the cardholder’s account. The difference is that travel points are typically used for vacation products, such as hotels, car rentals, or luggage.
A few disadvantages to this type of card are that there are often restrictions as to which vendors can earn points, as well as flight convenience when it comes to layovers or lower-priority seating. While travel rewards cards give you flexibility as far as what you can spend your points on, there are some drawbacks to consider too. One advantage of these cards is low APR and lower interest rates, though a carryover balance is never a good idea for any rewards card.
Airline Rewards
With airline cards, the main objective is to build points towards a free or discounted airline ticket. While nowadays there are more alternatives to how accrued miles can be spent, the primary purpose of an airline rewards card is to save on travel. With airline-specific cards, points can be combined with a frequent-flier program and one mile is earned per every dollar spent. For generic air-miles cards, points accumulate in a similar way, only they cannot be combined with a frequent-flier account. They can however be used on any airline of choice.
Possible disadvantages of such rewards cards include expiration dates, blackout dates, flight restrictions, and advance booking. While airline cards aren’t subject to as many conditions as bank-based cards, they can run into problems when it comes to where the airline flies, layovers, and as noted, expiring miles (including frequent-flier). Weighing the pros and cons of airline offers is definitely recommended, as this particular type of rewards card can be undone by fine print.
Hotel Rewards
Much like travel rewards cards, hotel rewards are less specific than airline cards. Though points are to be redeemed at hotels, the reach of such rewards can be quite great, especially if it’s for a hotel chain. While some airline cards are restricted internationally, many hotel rewards cards are not. You can literally redeem your points globally.
As with both airline and travel rewards cards though, you should still consider the pros vs. cons of a hotel rewards card and weigh it against what you would like to use the card for. Factor in annual fees and keep in mind that a balance carried on any rewards card is basically negating any benefit it can offer. What’s more, you could also be negatively impacting your credit score, which will follow you long after you’ve redeemed those well-earned points.
Good luck!
