At a Glance
If you’re ready to get rewarded for your travel then it’s time to get a card with travel-based rewards and perks. But should you focus on a co-branded airline card or go for something more all-encompassing?
In this article, you’ll learn:
Difference between travel and airline credit cards:
|Travel Credit Card||Airline Credit Card|
|Major credit card with no additional branding||Major credit card co-branded with a specific airline|
|May offer premier status with multiple travel partners||May offer premier status with airline and a few hotel/cruise/rental car partners|
|May cover checked bag fees through generic travel credit||May cover checked bag fees automatically|
|May offer access to a few airport lounges||May offer access to airline-specific airport lounges|
|No priority boarding||May offer priority boarding|
What is a travel credit card?
A travel credit card is a card that offers travel-based benefits and rewards for cardholders. The rewards ecosystems for these cards are often branded in the form of rewards points or miles. These cards will also often have multiple transfer partners that will accept your rewards points to pay for a portion, or all, of your ticket or hotel bookings.
Compare: Best Travel Credit Cards
How a travel credit card works?
A travel credit card will have a series of spending categories that earn you a certain amount of points for every purchase. As you make purchases with your credit card, your points will accrue in a bank that you can withdraw from as necessary. Most travel credit cards will have a broad range of airline, hotel, cruise, and rental car partners that will convert your rewards points to their proprietary points systems, allowing you to pay for your next trip in part or in full with the points you’ve accrued.
Most travel cards will offer additional perks like incidental fee reimbursement, statement credits for travel-related purchases (like TSA PreCheck fees), and even access to exclusive airport lounges globally.
To cover these perks, most card issuers will have a hefty annual fee with their travel cards, typically anywhere from $95 – $700 depending on the benefits they offer. While these annual fees can add up quickly, if you’re strategic, you can use enough of the perks to offset the cost. Check our “Are Travel Credit Cards Worth It?” for a few tips on how to maximize your benefits.
Benefits of travel credit cards
1. Work with a variety of travel partners
2. Easy to accrue points/miles
3. A broad range of travel-related perks that aren’t just related to flying
What is an airline credit card?
An airline credit card is a co-branded card that’s specific to a single airline. These cards will typically be from major credit card brands (Chase, American Express, Citi, etc.) but will use the airline’s reward platform instead of their own.
How does an airline credit card work?
Airline credit cards will accrue points that are solely related to the airline. For example, the Delta SkyMiles® Gold American Express Card will accrue SkyMiles and not American Express’ Membership Rewards points.
Some cards will offer bonus spending categories that earn you more miles for your purchases, but these are typically related to purchases made with the airline for things like tickets, incidentals, and beverages/snacks.
Some airline credit cards will have a few specific travel partners that will accept your miles over to their proprietary rewards systems, too.
Like travel cards, airline credit cards will typically have an annual fee to cover the cost of the benefits they offer, but there are some that have a $0 annual fee if you’re someone who just flies occasionally and isn’t looking for a lot of bells or whistles.
Perks of using airline credit cards
1. Sign-up bonus: Most airline credit cards will offer a significant sign-up bonus of miles if you spend over a certain amount within the first few months of being a cardholder. These bonuses can be a nice boost, especially if you’re planning to travel in the near future and want to subsidize your ticket costs.
2. Priority boarding: Many airline credit cards will offer priority boarding for their cardholders, giving you more time to get to your seat and unwind.
3. Checked baggage: Some airline credit cards will waive the checked bag fee for you and a companion as long as the tickets were purchased with the card.
4. Airport lounge access: Airline credit cards with higher annual fees will typically include access to their branded airport lounges, which is a nice perk since memberships to these lounges can often run into the thousands every year.
5. Elite status: Some airline credit cards will offer automatic elite status upgrades, letting you move up the ranks faster and enjoy premium benefits often reserved for their most frequent flyers.
When to get an airline or travel credit card?
1. How much of an annual fee can you afford?
Most travel and airline cards will come with some sort of annual fee to cover the costs of the benefits they offer cardmembers. If you’re detail-oriented then you’ll most likely find a way to offset these annual fees with the amount of benefits and perks the card gets you. However, if you’re not a frequent traveler it might not be worth the cost to keep the card every year.
2. Are you loyal to a single airline?
If you live in a city where an airline has a hub then it might be good to opt for an airline credit card, as you’ll be able to accrue miles quickly. If you don’t live in a hub or have no preferred airline you like to use, then opt instead for a travel credit card, as you’ll get more perks you can use.
3. What perks do you want?
Travel credit cards will typically offer a wider array of benefits that cover more than just airline-related costs, like rental car insurance, travel delay reimbursement, and upgraded hotel statuses. While some airline cards offer these perks, too, they’re not as easy to come by and will often have high annual fees or reduced benefits (like secondary rental insurance instead of primary).
If you’re loyal to a single airline or live in a city that’s considered a “hub” for a specific airline then you’ll probably get more benefits out of having an airline credit card. Travel credit cards are the better choice for someone who doesn’t have a preference for airlines and who wants a more all-encompassing collection of benefits.
Be sure to understand which perks you’ll get and how to use them. Some travel rewards credit cards will have restrictions for benefits and reimbursements that could cost you if you’re not paying attention. The Platinum Card from American Express, for example, offers a $200 yearly travel reimbursement credit but can only be used for incidentals and on a single airline of your choosing.
First, understand which benefits they offer and how they’ll offset your annual fee. Make sure you’ll be able to capitalize on those perks as the annual fees can get quite high, costing you a lot of money for no benefit.
Next, check to see if there are bonus categories the travel card offers that align with your everyday spending. Some cards will offer bonus rewards points for purchases made at restaurants, while others have generous bonuses for using the card to pay your streaming service bills.
The best card for you will be the one that rewards you for the purchases you already plan to make, so choose wisely!
Look for a card that has bonuses for purchases you already make so that you’ll be able to get the most bang for your buck.
Next, you’ll want a card that offers you premium upgrades that make traveling a little more luxurious. Check to see if the card will reimburse you for TSA PreCheck, NEXUS, or Global Entry fees, as these are easy ways to reduce your airport anxiety and let you literally cut the line to get ahead.
Finally, check for a card that has an annual fee you can easily offset through the use of your benefits. Does your home airport have lounges you can use? If so, look for a card that will get you complimentary access. Do you need hotel accommodations when you travel? What about rental cars? Many travel rewards cards will have partnerships with hotels and rental car agencies that offer you premium status as a cardholder, getting you better rooms and cars without spending anything extra.
Airline credit cards are great if you’re someone who uses a single airline often and wants to accrue premium status with the brand quickly. Not only will most of them offer you free checked bags and priority boarding, but you may even get automatic seat upgrades and lounge access just for being a cardholder.