Here’s the thing about travel rewards credit cards. There are so many – how do you find the best one for your situation?
One thing I’ve noticed over the last couple years is that credit card companies follow basically the same formula. A customer signs up, they spend $2k, $3k, $5k and in return get a hefty chunk of rewards points.
Typically, you’ll receive enough for a cheap roundtrip ticket to go somewhere not too close, but not too far away.
With that model, why not just choose the one that looks the coolest, or the one that offers the extra 10,000 points over the rest of the pack?
When looking at the best travel rewards credit cards, it’s important to really identify what you need out of a credit card.
The first step to determining this is figuring out these factors:
- Can I spend enough to reach the bonus minimum without completely screwing myself financially?
If it’s going to take a year to pay off the $5,000 you racked up on that new card in order to get initial 100,000 bonus miles, that card may not be the best option for you.
We’re not going to get too deep into money management here (there’s a great blog called Mr. Money Mustache for that), but in order to really capitalize on travel rewards credit cards it’s important to not get in over your head.
- Do I have good enough credit to get approved? Most cards dedicate a chunk of their fine print to covering odds of approval. If your credit and debt-to-income ratio is good, you should be good to go. Bad credit and high debt on other credit cards? Your options are limited, particularly when it comes to optimizing rewards.
- Am I planning to keep this card long term?
Let’s look at two sample scenarios many digital nomads may find themselves in:
Scenario 1: The Nomad-In-Residence
Mark has been living in Chiang Mai for six months. He plans to head back to the US for the holidays, but first wants to spend a couple months in Bali to check out the nomad scene there.
Mark applies for one of the many travel rewards credit cards that provide a big points bonus at a set rate – let’s say 50,000 bonus miles after he spends $3,000 in the first three months.
Mark gets approved, and immediately buys a one-way ticket to Denpasar, two months of lodging, coworking membership, scooter rental, and an Indonesian SIM card for his phone.
He also buys some new travel gear, enough that he hits the minimum dollar amount ($3,000).
He gets his rewards miles and uses them to pay for his flight back home to the states, saving a cool $500. This is enough to offset the cost of his travel gear, scooter rental, and SIM card.
Mark’s lodging and coworking membership were bills that he pays each month anyway no matter where he’s at, therefore he’s not really spending more money than normal (aside from the flight to Denpasar, running about $200)– it’s just all front-loaded at one time.
Because of this, Mark is able to pay off the $3,000 in only a couple months. He incurs a very minimal amount of interest, and cancels the card long before that pesky $250 annual fee hits his balance.
Scenario 2: The Nomad-On-The-Move
Rachel is the type of person who can’t stay in one place for too long. Lately, she’s been country hopping every couple of months. She consistently pays the bills for herself and her dropshipping store on travel rewards credit cards and earns pretty hefty miles as a result.
She uses those miles not only to purchase airline tickets to each destination, but to upgrade to business class whenever possible.
The cards which allow her to optimize her rewards are cards offering 2 and 3 points per dollar spent, instead of the traditional 1 or 1.5. Like Mark, she tries to pay her balance each month and rarely accumulates noticeable interest.
Rachel plans to keep her three travel rewards credit cards for an extended period of time. Because she’s racking up so many miles, she doesn’t mind paying the annual fee.
She’s still coming out thousands of dollars ahead each year.
There are innumerable variations on these stories as well as other situations. But part of applying for the best travel rewards credit cards is understanding what you want to get out of them, and how you plan to use them. Learn more in our Beginner’s Guide To Travel Hacking.
Now, without further ado, here are the best travel rewards credit cards for Q4 2017.
Top 5 best travel rewards credit cards
This card is consistently on the short list of best travel rewards credit cards. Users earn 3X points on travel and dining purchases along with a $300 annual travel credit reimbursement – just for having the card.
The sign-up bonus is 50,000 miles when you spend $4,000 in the first three months.
Additionally, Chase offers credit when users apply for TSA Precheck or Global Entry. They also ensure smooth transfer to hotel and airline rewards programs, car rental benefits, and no foreign transaction fees.
There is a $450 annual fee – but this is easily offset even by utilizing only some of the rewards. See the latest offer here.
- Notable mention: Chase Sapphire Preferred. A slightly watered down version of the Reserve, but with a much lower ($0 introductory, $95/year following) annual fee. Earn 50,000 bonus points at $4,000 spent in the first three months, 2X rewards points, and 3X rewards points on airfare purchased directly from airlines. Check out this card here.
60,000 rewards points are yours after you spend $5,000 in the first three months. Additionally, and what really puts the Platinum Card among the best travel rewards credit cards, is the 5X points when buying airfare directly from an airline or with American Express Travel.
The catch here, which is actually a huge benefit, is that you pay the balance in full each month – so there is no interest.
Users also receive $15 in Uber credit each month and a $200 airline fee credit. Plus, the card offers perks at over 1,000 airport lounges around the world.
The annual fee for this card is $550. Check out the latest offerings and specials here.
- Notable mention: Business Platinum Card from American Express. The rewards are structured a bit differently here, but as far as business travel rewards credit cards go this is one of the best. 50,000 bonus miles after $10,000, an additional 25,000 bonus miles at $20,000 spent within three months. $450 annual fee. Read up on the most current offer here.
Simply put, Chase has the travel rewards credit cards game down to a science. This business credit card offers 80,000 bonus points after the cardholder spends $5,000 in the first three months. That’s enough for an international round-trip ticket to a number of desirable destinations.
Unless you’re spending over $150,000 per year on the card, you’ll also enjoy 3X points per dollar spent on travel, shipping, online advertising, as well as internet, cable, and phone services.
Travel reimbursements for cancellations and changes are available, as are free cards for team members. The best part? The annual fee is only $95. View the latest offering here.
Top 2 best travel rewards credit cards with no annual fee
Bank of America holds a spot in the game with their aptly titled “Travel Rewards” card.
Approved applicants receive 20,000 bonus points for applying online – so don’t go into the bank to get this one.
Standard purchases draw 1.5 points for each dollar spent. Points are redeemable on any airline or any hotel – which is great for those of us who refuse to tie our loyalty to one brand or another.
Bank of America account holders can obtain further rewards as well, depending on their type of account with the bank. All cardholders see 0% APR for the first year on every purchase, easily making this one of the best travel rewards credit cards.
More information is available here.
Discover’s entry onto the list hits with no annual fee and a minimum of 1.5 points per dollar spent on purchases.
But what makes this one special is that Discover will match your miles after the first year – a huge bonus for those who’ve mastered the art of buy-and-immediately-pay-off credit card ninja skills.
Their points are redeemable for travel purchases including hotels, airlines, rental cars, and selected other offerings.
Points never expire, but that makes no difference to many of us. I’ve never met a digital nomad who hangs onto them for more than a few months anyway. Get the latest info here.
Best travel rewards credit card for new digital nomads
Barclay starts by offering 2X points on all purchases. Then they throw in 50,000 bonus miles after you spend $3,000 in the first three months.
Plus, they give you 5% of your points back every time you redeem, allowing a nice head start towards that next prize. No foreign transaction fees, and points are valid as long as your account is open and in good standing.
This card is perfect for nomads in the Nomad-In-Residence scenario, and those working towards being there. I personally just used the bonus points perk to fly from Singapore to Denver for under $120.
The annual fee is only $89, not nearly enough to set you back an international flight. Check out the current availability here.
Best hotel rewards credit card
Most major hotel and resort chains have a rewards credit card. What makes this one better than others is that Starwood has partnered with companies across the travel spectrum to help cardholders maximize their points.
Delta and Emirates for flights, Avis and Sixt for car rentals, even Uber for when you’ve had a couple cocktails or don’t feel like renting a car.
Plus, Starwood’s merger with Marriott means certain perks with Marriott and their massive collection of locations as well. After approval, you’ll be a Starwood Silver member.
This allows holders to earn up to 5X points on purchases, and earn free nights at Westin, Sheraton, Aloft, and any of the other hotel brands under Starwood’s portfolio. Not a bad way to crash after a long day of travel!
View the current offer here.
Best airline rewards credit card
United MileagePlus Explorer
This is among the best travel rewards credit cards because United offers a strong purse of perks.
Cardholders are allowed a free checked bag on each trip, which can be a big deal these days with any US-based airline. Priority boarding is also included, so you’re guaranteed that prime overhead storage bin space.
One point per dollar spent, 2 points in some cases. Regular users will receive 10,000 bonus points per year when they spend $25,000 or more.
Holders also receive two United Club passes each year, which will help you directly offset that $95 annual fee that is charged after the first year (especially if you like to enjoy a drink before a flight or take advantage of free food).
Let’s just hope United can up their customer service to be in line with their rewards program. Learn more about this card here.
Making your selection
When choosing from the best travel rewards credit cards, remember that the right one is right for YOUR situation – not necessarily that of someone else you know. Consider your upcoming travel plans, budget, and long-term plan for the card.
Once that’s decided, the perks are right around the corner!