5 Things to Look For When Picking a Travel Rewards Card

There’s a lot to think about when planning for a big trip: flight schedules, hotel itineraries, packing the appropriate clothes — the list goes on. But long before you decide where to go, there’s an important step even the most diligent travelers can overlook: picking out a travel rewards cards.

Travel rewards cards can save you money. However, not all travel rewards programs are built the same, and what may be a great option for someone else isn’t always the best deal for you. Here are five important questions to ask when picking a travel rewards credit card.

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1. Do the costs justify the benefits?

Many credit cards promote the ability to earn significant rewards in the form of points or miles for card purchases, but they’re not all without a cost.

As CreditCards.com reports, fee-based credit cards cost cardholders an average of $163 in 2014 — a significant increase from the average $87 fee the same cards charged a year prior.1 If you have a fee-based rewards card, confirm that you know the current annual fee and terms (especially if it was waived when you initially opened the card). Consider the fee compared to the rewards you stand to earn for your travel-related purchases, along with whether you’ll carry a balance on the card that could result in interest rate charges.1 If the benefits don’t outweigh the costs, you may fare better with a card that isn’t quite as “rewarding” — but ultimately costs you less.

If you travel abroad regularly, read your cardholder agreement’s provision regarding foreign transaction fees and currency conversion fees. Though experts at NerdWallet explain that both are small percentages (currency conversion fees are typically 1% of the amount exchanged; foreign transaction fees are usually 3% of the transaction amount),5 they can add up and be avoided if you travel with a card that doesn’t assess them.

2. Does the card have safety features that work to your benefit?

Your card’s safety features may reduce the amount of hassle you experience if the unexpected happens during your trip. Inquire how quickly your card issuer provides a replacement card if yours is lost or stolen, along with the amount of liability protection offered. Though experts at CreditCards.com explain that the Truth In Lending Act limits a credit cardholder’s liability to $50 for unauthorized transactions,3 card issuers are not required to waive the cost entirely. Card issuers also vary in how much they’re willing to assist in resolving fraudulent or unauthorized charges, and whether they’ll contact the merchants involved on your behalf.3

3. How easily can you reach your card issuer when you’re out of the country?

Many credit card issuers advise cardholders to reach customer service by phone, or via secure email. But reaching a live representative may not be possible if these tools aren’t available to you during travel. When you’re abroad, for example, NerdWallet experts say you may not be able to dial your card’s “800 number”2. If you’re without a secure Wi-Fi connection or don’t have access to the phone number or email address associated with your account, verifying your identity with customer service can be a challenge, too.

Contact your card issuer before you depart to understand the process for making contact if you can’t easily call or email, and inquire how you can reach a live representative outside of standard business hours if needed.

4. Are there limits on how and where you earn rewards?

Some rewards programs state purchase maximums (like $1,500) on rewards-earning potential for certain categories, like gas stations, restaurants, or grocery stores.4 Other cards may not offer rewards for purchases made with virtual wallets.4 Create a budget for how and where you intend to spend during your trip. If you expect to exceed the limits your card’s rewards program imposes, bring more than one rewards cards on your trip and alternate your use of them to maximize the rewards you stand to earn.

5. How do you redeem rewards?

Reward redemption terms vary as much as card rewards programs. For example, some credit issuers require cardholders to earn a minimum amount of points before they can be redeemed. Others may not apply rewards to a cardholder’s account for several weeks after they’re earned.4 Points or miles redeemed for airfare or hotel stays may apply to specific travel dates, or eligible brands. The key here is to make sure points are easy to redeem.

1. http://www.creditcards.com/credit-card-news/annual-fee-cost-rise.php

2. http://www.nerdwallet.com/blog/banking/handle-bank-card-trouble-traveling/

3. http://www.creditcards.com/credit-card-news/4-keys-zero-liability-policies-debit-credit-1282.php

4. http://www.discover.com/credit-cards/cashback-bonus/

5. http://www.nerdwallet.com/blog/tips/foreign-transaction-fee/

Legal Disclaimer: The articles and information provided herein are for informational purposes only and are not intended as a substitute for professional advice. 

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