Three Tips for Choosing Your Next Rewards Credit Card

travel credit cards


Rewards credit cards are amazing for those who really get to take advantage of them and make them work in their personal lives. Whether it’s cash back rewards, airline rewards or hotel rewards, earning something by paying for things you have to have anyway is a nice deal. However, it’s sometimes a bit confusing to choose a new rewards card. In light of a recent conversation in which a friend stated she just applied for the new American Airlines AAdvantage credit card, she was so excited about the sign-up bonus and the miles she would earn.

Except she doesn’t fly. She hasn’t flown a day in her life. She is terrified and has no desire to start flying now. She’s excited because she can order gift cards and other things with her miles. And while she can convert them to other rewards, the payoff simply is not the same. She’d be far better off with a cash back card or a hotel credit card. Choosing the best card for you is imperative; just because a rewards credit card offers amazing rewards does not make it the card for you. So you don’t make the same mistake as my friend and get a card that won’t give you nearly what you want, we have three key pieces of advice for choosing the right travel rewards card.

Look at the Cost

The overall cost of a rewards credit card is important. For example, a card with a $450 annual fee is a bit much if you don’t use it enough to earn rewards or cash back that exceed that dollar amount. A card that requires you pay a foreign transaction fee is likely too expensive for someone who travels internationally several times a month, even if the annual fee is only $99. You have to look at the overall cost versus what you will get and make sure that it’s there.

Look at the Value

The value of a rewards credit card plays an important role in choosing a new card. For my friend, she’s getting less than one cent per point redeeming her airline miles for gift cards. However, she’d sometimes get more than 2 cents per point if she redeemed them for actual tickets, but always around 1.5 cents per mile. The value is simply not there for her. Don’t make the same mistake.

Look at the Flexibility

An airline credit card with a great sign-up bonus is a tempting offer for a traveler, but be careful. Some airlines offer so many blackout dates that travel is virtually impossible on your own time. Be sure that you can transfer to airline partners, use in conjunction with other cards or hotel memberships and that you have all types of flexibility with your card.

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