Deciding If a Travel Rewards Credit Card Is for You

Many people dream of traveling the world when they retire or before. They plan elaborate vacations with specific and often expensive stops as they daydream at their desk job. For the dreamers, a travel rewards credit card seems like a no-brainer, especially when they have globe-trotting friends who seem to bask in the benefits of such cards.

Still, before applying for a travel rewards card, you need to assess your situation and what you want from a credit card. Not all travel cards are worth the hassle, and some cards make redeeming points near impossible. Therefore, you need to ask yourself several questions before filling out an application.

How Often Do You Travel?

Travel rewards cards are usually the most beneficial to people who actually travel and do so often. If you do not get a lot of vacation time or do not have much need to travel outside of the country for work, a travel card might not be the best use of your credit history.

Frequent travelers get the most bang out of travel rewards cards because they have a need and do not mind going through loopholes or jumping hurdles to save on a trip. Infrequent travelers may not have the same level of patience nor the motivation to learn all the rules and restrictions of these cards and programs.

How Good Are You With Complex Rules and Restrictions?

Many prominent travel cards have restrictions and rules surrounding the definition of travel expenses. In fact, some cards only allow consumers to redeem points or rewards for airfare, hotels, and car rentals, but the restrictions do not stop there. Some travel cards even restrict which hotels, airlines, or car rental facilities you can use.

If you want a travel card but want to minimize the restrictions and rules, look for cards with looser interpretations of expenses. The Capital One Venture Rewards card is an excellent option for people new to travel cards and who want a simple solution.

What Is Your Current Financial Situation?

Before applying for a travel rewards credit card, consider your current financial position. If you already have credit card debt or want to make a large purchase with a new card, it is wise to hold off applying for a travel card or a different type of card. You do not earn rewards while paying off a large purchase or a transferred balance. The only way a travel rewards card is worth it is when you can make frequent purchases at approved locations. You also want to keep the card paid down or off.

Is There a Better Card Option?

While a travel rewards credit card is right for some consumers, most people are better served with a cashback or cash rewards card. Cashback cards are more straightforward and do not have as many rules. However, some cashback cards may still require spending at specific stores to earn points.

Travel cards are beneficial to a specific consumer, one who travels often. While other consumers can benefit from the reward programs of these cards, they are typically better off using a cashback card. Only you can determine which card, if any, is right for you.