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Should You Get A Travel Rewards Credit Card & Are They Worth It?

Over 61% of credit card holders taking two or more trips this year are planning to fund their vacations using their accrued travel perks, while nearly 15% of Americans earn a whopping $1400 U.S. in travel rewards each year. 

So, are travel rewards credit cards the golden ticket to finally feed your travel bug and enjoy free trips around the world? Maybe – but they might not be the best credit card choice for everyone. Here’s what you need to know before buying that ticket!

Travel Rewards Credit Cards: Are They the Best Choice for You?

Travel credit cards aren’t dissimilar to most rewards credit cards, except for the fact that eligible purchases focus on categories such as airlines, car rental, and accommodation.

In turn, travel credit card holders receive travel-focused perks, like miles, points, and discounts to redeem in hotel stays, flights, and vehicle hires. 

While these credit cards are generally more expensive than other options, they can be a powerful tool to ease the financial burden of summer vacations or family holidays – but they are not for everyone. 

The Benefits of Travel Rewards Credit Cards

With the 50,000-point sign-up bonus able to cover the costs of 1.6 round trip tickets alone, and plenty of enticing discounts and benefits travel credit cards can be highly beneficial – and even help you travel for free!

When used wisely – and in combination with personal finance management tools such as SoFi’s credit score monitoring – travel credit cards are a great option to build your credit score, earn more for each dollar spent, and fuel your passion for traveling. 

What’s more, when using your card abroad, you can continue to accrue benefits while you spend and enjoy your rewards, as well as avoid scams and benefit from the superior consumer protection credit card providers offer. 

Users Who Benefit the Most From Travel Rewards Credit Cards

Travel credit cards aren’t among the cheapest options, and they certainly aren’t the best choice for everyone looking to open a credit card account. 

So, who benefits the most from them? 

As a rule of thumb, those who travel frequently and often spend large amounts on travel expenses can get the most out of their purchases with a travel credit card. However, small business owners, occasional business travelers, and those who are looking to set off for their lifetime adventure on a budget can also benefit from some of these common features: 

  • Free Global Entry membership
  • Free nights or hotel stays (sometimes offered upon credit card renewal)
  • Elite status
  • Companion passes
  • Free lounge access
  • Free air miles
  • Travel Insurance

Don’t underestimate the benefits that come with the sign-up bonus! Sometimes this is enough to fly for free on your next vacation! 

Risks and Drawbacks of Travel Credit Cards To Keep in Mind

Travel credit cards are certainly beneficial when used responsibly. However, it is important to keep in mind that nearly 40% of Americans take on holiday debt each year, for an average of $1,249. 

While traveling is a goal for many, vacation costs and expenses can significantly impact your overall financial situation. When using travel credit cards, some common pitfalls include high yearly fees averaging $277, high interest rates, tight repayment schedules, and limited perks or eligible purchases (which can be a downside for those who don’t travel often). 

Bottom Line: Are Travel Rewards Credit Cards Worth It?

Credit cards might be a worthy choice for certain categories of spenders and frequent travelers. However, before committing to a certain contract, users should review the pros and cons of booking travel with a credit card, consult an experienced provider or financial advisor, and take a hard look at their finances.

If you decide that this is the best option for your lifestyle and financial goals – and you learn how to use your credit card wisely – a travel rewards card can open up endless low-cost travel opportunities!

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