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What is a Travel Credit Card?

Last Updated: April 11, 2023
6 min read

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Key points about: how travel credit cards work

  1. General travel credit cards let you earn rewards on eligible purchases that you can redeem for future travel and often non-travel-related expenses.

  2. While fewer redemption options exist, airline or hotel travel cards offer extra benefits like priority boarding and hotel room upgrades.

  3. You can use a travel credit card with an airline or hotel card to maximize your earning potential.

If you travel regularly, you might benefit from a travel credit card. Many travel credit cards offer rewards on qualifying purchases, which you can redeem toward travel and sometimes non-travel-related expenses. Other travel credit cards offer rewards that are specific to airline or hotel brands. Because of that, people often apply for more than one travel credit card and use the combined rewards to increase their benefits. Let’s take a closer look at how travel cards work.

How do different types of travel credit cards work?

Travel cards give cardmembers the opportunity to earn rewards on qualifying purchases. Depending on the card, these rewards can be redeemed for statement credits, travel bookings, and more.

Here’s a quick overview of the four most common types of travel rewards credit cards:

General travel rewards credit cards

Many of today’s top travel credit cards aren’t tied to a specific travel provider. Instead, these travel cards allow cardmembers to earn miles on eligible purchases with flexible redemption options, such as redeeming miles for statement credits, using miles to book travel through the card issuer’s website, or transferring miles to different airline or hotel loyalty programs. The Discover it® Miles Card lets you earn unlimited 1.5x Miles automatically on travel purchases and all your everyday purchases.

Did you know?

While some travel miles credit cards only allow you to redeem your rewards for travel expenses, the Discover it® Miles Card lets you turn Miles into cash. Or redeem as a statement credit for your travel purchases like airfare, hotels, rideshares, gas stations, restaurants, and more1

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A general travel rewards credit card can provide a flexible way to earn and redeem rewards. But some may prefer a more specialized travel credit card, such as an airline or a hotel credit card.

Airline rewards credit cards

Airline rewards credit cards, which are tied to a specific airline, allow you to earn miles that you can redeem for flights with that airline. Some people like airline credit cards because they can combine the miles they earn while flying with the miles they earn by using their airline credit card to book flights. Some airline credit cards allow cardmembers access to elite airline status levels more quickly, and nearly all airline cards offer benefits like free checked bags and discounts on in-flight purchases.

Hotel rewards credit cards

Like airline credit cards, hotel rewards credit cards allow you to earn rewards that can be redeemed with a specific hotel brand for things such as a free hotel stay. And hotel credit cards usually offer extra rewards when you use your hotel card to book stays with one of the brand’s properties. You can typically combine these rewards with the perks you earn as a brand loyalty member, such as complimentary room upgrades and extended checkout times.

Train rewards credit cards

Frequent train travelers can apply for co-branded cards that allow cardmembers to earn rewards they can put toward train travel.

Is a travel credit card with no annual fee best for you?

While travel credit cards with no annual fee generally earn fewer miles per purchase than travel cards with an annual fee, you can still gain a lot of value from a travel card with no annual fee. Travel cards with no annual fee give cardmembers the benefit of earning rewards without the costs of an annual fee.

General travel rewards cards with no annual fee

For occasional travelers, travel rewards credit cards that offer flexible earning and redemption options with no annual fee may be a good choice. These cards let you enjoy the benefits of a travel credit card without paying an annual fee.

Co-branded travel rewards credit cards with no annual fee

Many airlines and hotels offer cardmembers a choice between credit cards with no annual fee or an upgraded card with an annual fee. Before choosing, check each card’s rewards structure against your current spending habits. If you regularly travel with a preferred airline or hotel, a co-branded annual fee card could offer extra rewards and benefits that might save you money in the long run.

Choosing the best travel credit card for you

Now that you know what a travel credit card is and how travel rewards credit cards work, it’s time to look at how to choose the best travel credit card for you.

If you want to know which travel credit card will likely give you the best value, consider how much you spend on travel. For example, suppose you only take one or two trips a year; in that case, you might benefit from a general travel credit card—primarily if the credit card provides flexible redemption options. But if you’re a frequent flyer, you might want an airline or hotel credit card that lets you earn rewards and perks with a specific brand.

Here are a few other factors to consider when you’re deciding which travel credit card is best for you:

New cardmember bonus

Many travel credit cards allow new cardmembers to earn bonus rewards within a set period, like throughout the first year of having the card. In some cases, you may need to meet a spending requirement before earning your bonus—which is why it’s a good idea to ensure the spending requirement fits your budget before applying for the card. With the Discover Match®, we’ll automatically match all the Miles you’ve earned at the end of your first year. There’s no limit to how much we’ll match.2

Foreign transaction fee

Some credit cards charge foreign transaction fees whenever you make a purchase outside of the United States or with an online retailer in a foreign currency. If you plan on traveling internationally, consider a travel credit card without foreign transaction fees.

Trip cancellation or delay insurance

Some travel credit cards offer trip cancellation or delay insurance. To evaluate a travel credit card’s insurance package, compare the costs and benefits against other types of travel insurance available to you from an airline or an independent insurance provider. Be sure to read the travel credit card’s terms to determine if the card provides this type of insurance.

Airport security screening benefits

Several travel credit cards offer statement credits towards the cost of applying for airport screening benefits, which offer members expedited security screening options at many major airports. Again, you should reference the travel credit card terms to confirm that the card provides these benefits.

Extra travel benefits

Many airline and hotel credit cards offer cardmembers extra benefits and perks like early boarding, late checkout, and complimentary upgrades. Make sure you consider all the available benefits before choosing the best travel credit card for you.

Using more than one travel credit card

Many people use more than one travel credit card. By carrying both a general travel credit card and a co-branded hotel or airline credit card, you can get the perks that come with your favorite hotel or airline credit card—such as free checked bags or fast-track elite status—while having the option of using a general travel card to earn rewards you can redeem toward travel and non-travel-related expenses.

Are travel credit cards worth it?

Travel credit cards are a good choice if the rewards you earn can be redeemed for travel that’s worth more than what you could have earned from other credit cards. Before deciding whether a travel credit card is right for you, do the math on where your money is currently going, and ask yourself whether you could benefit from earning rewards for future travel expenses.

Once you understand how travel credit cards work, you can enjoy the benefits of adding a travel credit card to your wallet. Keep that in mind as you book your next trip.

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