Everyone dreams of taking a trip solely on the power of credit card points and miles. It feels like winning a free vacation and leaves your budget free to spend on experiences, adventures, and upgrades.We always get asked about what credit cards we recommend for travelers, but exploring your options can feel very overwhelming. To help ease this freeze response, this is your beginner’s guide to understanding how the rewards/points work, which cards are best while you’re traveling, and how to decide which card is best for you overall.

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Basic 3 Rules to Remember:

1.      There is no one right choice: There is no one-size-fits-all credit card. The best card for you depends on multiple factors, including your ovreall finances, where and how you spend your money, your credit score, and your travel goals.

2.      Any credit card carries risk: As with any financial decision, taking out a credit card comes with risks. It’s important to take the decision seriously and consider your own financial situation before diving in to the world of travel reward cards. 

3.      Pay On Time: Ensure you’re able to pay your bills on time and in full so you don’t risk high interest rates and fees.

Deciding on a Travel Credit Card Step 1: Set Your Goals and Know Yourself

Once you know your travel goals, it’s time to think about how and where you spend your money in everyday life. Credit card points are earned through the purchases you make on that card, so having a good understanding about your budget and spending habits will help you make the most of them. Make sure you know the answers to the following questions:

Different Types of Credit Card Rewards

There are a few different types of rewards out there. Each card may use a slightly different system. Here’s what you’re likely to find:

Transferable Points – These are the most flexible. You can use these points in your card’s portal. Or, you can transfer them to multiple different airlines and hotels (if they’re partners with that card). Usually, you can use these in the forms of gift cards, cash backs, or direct transfers.

Points vs Miles – These are essentially the same concept of currency with different names

Co-Branded – Cards that have partnerships with brands to give you points for specific airlines and hotels (i.e. a Delta Amex)

Sign-up Bonus: When you first sign up with a credit card, they usually offer a sign-up bonus between 40,000 and 70,000 (or more) points. To secure these points, however, you need to spend a minimum amount within the first few months of signing up. So you want to think about having some big purchases upcoming to get the bonus.

Step 2: Check The Card’s Rewards vs Payment

Now that you know what your goals and limitations are, you’re ready to dive into the world of cards to find your best fit for accumulating points.

One of the first things you notice on a card is the annual fee. You want to ensure that the annual points and travel credits exceed the annual fee so that the card pays for itself. Look for cards that earn at least 1.5 – 2x points in categories where you spend the most money.

Step 3: Is Your Card Usable When You’re Actually Abroad?

When you’re getting ready to go on your next adventure, it’s a good idea to inform your card company that you’re traveling so they don’t flag your card for fraud. Don’t forget to include places where you have long layovers and will probably buy something in the airport. You should also familiarize yourself with your card’s travel perks!

Aside from worldwide acceptance and foreign transaction fees, you want to look at what the cards have to offer WHEN you’re traveling. Does the card offer built-in travel insurance or rental car insurance? Does it offer you lounge access in the airport? Some cards help you with lost baggage or flight delay coverage. Consider what the card can offer you when you’re on your adventure.

Which Credit Cards offer the Best All-Round Travel Card for Beginners?

With all of this in mind, you’re ready to start looking at specific credit cards and deciding which one is best for you! Below are four of the most beginner-friendly cards, which are a great starting point.

Chase Sapphire Preferred

This is a favorite among almost all the experts we looked at. With a low annual fee and a wide range of partners, this is a great beginner card.  It has between 1x- 5x points for major shopping categories and 3x on most everyday spending. The points are valuable with beginner-friendly ways to use them.

Wells Fargo Autograph

This is the best no-annual-fee card. If you can’t budget the extra yearly expense, you can still earn 1x-3x points in common spending categories. While this card comes with more limited travel partners, which might reduce its appeal for experts, it’s a nice, simple card to use. Points are worth the same whether you redeem them for travel or for statement credit. Points and redemptions are straightforward. And there is an interest-free window that gives you a little breathing room.

Citi Strata Premier

This is good for everyday life with earning categories that reflect typical expenses.  Earn 3x points at supermarkets, restaurants, and gas stations. You can also earn between 1x -10x points in lots of bonus categories that you don’t find on other cards. They don’t have as many useful travel partners as some other cards, but if you’re not loyal to a particular brand, this is a good option.

Capital One Venture X Rewards

This versatile card works well abroad since it is accepted wherever Mastercard is accepted. It offers rental car insurance, trip cancellation/ interruption insurance, and lounge access. The drawback of this card is that it requires you to spend mostly through their portal to maximize your points. However, miles can be redeemed to cover past travel expenses. With an easy-to-use portal, this is a good card for those who don’t have time to track bonus categories, where to spend, and how. With a $300 annual credit and 10,000-mile bonus, this card does pay for the higher annual fee almost on its own.