When you think of the best travel credit cards, do you automatically think of credit card reward schemes? Many people do. But credit card reward schemes might not be as good for travel as they are made out to be.
Credit card reward schemes could work for you. But it totally depends on the type of travelling you do. If you are budget backpackers like us, credit card rewards schemes might not be worth your time. So, when searching for a travel credit card, you will want to focus on other features. Let me explain…
Ultimate Travel Money Guide
We’ve compiled a whole load of comprehensive blogs focusing on travel money. What are the best travel debit and credit cards? How do I avoid money changer scams? What are these international bank fees I keep getting on my card whilst travelling? Our in house (or hostel as we are travelling) money guy James is here to offer tips and guidance on managing your money whilst travelling. In this blog we will look at credit card reward schemes and ask – are they worth it?
Credit Card Reward Schemes For Travel
Ignore The Marketing
Credit card reward schemes are more prevalent in the US than in the UK. But in both countries credit cards that offer reward schemes can be marketed as great for travel.
What Kind Of Traveller Are You?
Are you a luxury traveller?
Do you use hotel chains often?
Or are you a frugal budget backpacker?
Credit card reward schemes being good for travel really depends on what type of travel you do. And credit cards with reward schemes usually come at an extra cost. This could be higher interest rates and / or a monthly fee.
Most of the rewards center around accruing points or airmiles to use for flights, airport lounge access or stays in quite expensive chain hotels (usually you get a free night if you pay for a certain number of nights).
However, if you are budget backpackers like us, this probably won’t benefit you.
We tend not to fly with just one airline or group and pick our flights based on price and convenience to suit us. Also we wouldn’t use a couple weeks’ budget staying at a fancy hotel for 3 nights to get 1 night free. It’s just not how we travel. We’d rather stay in cheaper hostels and travel for longer, or use the money on doing a cool activity.
However, if you do use the big airline groups or hotel chains regularly then you should definitely consider a rewards scheme.
You Could End Up Wasting Your Money
To everyone else, you are doing well if you can find a decent travel card that gives you fee free foreign purchases. Whilst travelling you can end up spending hundreds on bank fees if you are not careful.
Other great credit card features to look for is the ability to withdraw some cash without being charged an arm and a leg; and a card that gives you some cashback.
Focusing on these useful features will likely save you more money based on the way you will mostly be using your card, rather than trying to collect loads of airmiles.
Things To Think About When Looking At Credit Card Rewards Schemes
- How much does it cost to get the card (monthly fees and interest rates) now and in the future
- What do you need to buy or how much do you need to spend to collect the rewards?
- Do the rewards expire or are there any introductory offers that will end up making it not worthwhile?
- What are the rewards and how much are they worth? Does this outweigh the costs of the card?
- How easy is it to access the rewards?
- Will you really use the card enough to collect the rewards?
- Will you really use the rewards?
- Where in the world will you be travelling? Are you going to be able to use the rewards there? Are you going to be able to use your credit card there? Remember cash rather than card is used in large parts of the world.
If you are in the US, the points above are probably waaay more relevant to you as credit cards tend to come with reward schemes. There are hundreds out there, with some better for flying, some for hotels and some for dining. Keep the above questions in mind when searching for a travel credit card. Add up the costs and benefits of different reward schemes. And don’t just fall for marketing on this!
I recommend checking out The Points Guy’s blog as it reviews all the cards out there and works out what the best one is in each situation.
Are Credit Card Reward Schemes Worth It?
For our type of budget backpacker travel, no they are not. But it totally depends on how and where you travel. We prefer to focus on credit cards that are effectively fee free when you use them abroad and here are our top 5 travel credit cards UK.
Explore More In Our Ultimate Travel Money Guide:
These Ultimate Travel Money Guide posts are up to date as of March 2019 and will be updated periodically. Always check with the companies mentioned and keep an eye out for new ones I haven’t mentioned. I’ve mostly focused on all things UK based. Feel free to get in touch with me if you have any tips from your country you would like me to include.
This is what I’ve found to be suitable for our needs. Yours may differ and so the Ultimate Travel Money Blogs can only be taken as a guide rather than constitute personalised financial advice. Please get in touch if you have any specific questions and I will do my best to answer them.
Who am I?
Hello, I’m James. I’ve worked in finance for the last decade – in banking, investments, risk and insurance. I’m also qualified in financial advice and planning. I’ve also spent almost 2 years travelling South East Asia, South Asia, South America and Central America. So I’d like to think I know quite a bit on travelling and finance!
I will be sharing tips, guidance and my experiences across a range of travel money topics that will be useful and even essential for you on your travels.