‘Travel rewards are often more lucrative than cash back.’ Take this 5-question quiz to see if a travel rewards card is right for you

Is a travel rewards credit card the right option for you?

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With more than 6 in 10 US adults are likely to take at least one vacation this summer, according to a new study from Bankrate, you may be wondering if now’s the time to apply for a credit card with travel perks. But just because you have upcoming travel doesn’t mean you need a travel credit card. So here are five questions to help you figure out if one might be right for you.

first. Do you pay your credit card balance in full and on time?

This is essential. Ted Rossman, senior industry analyst at CreditCards.com, says you need to be able to consistently pay your credit card bills in full to make a travel card worthwhile. “That’s true of any rewards credit card, it doesn’t make sense to pay the average 16.40% just to earn a small fraction of that back in airline miles, hotel points or cash back,” says Rossman.

2. Do you have at least one trip on the horizon in the next year?

If you have one or more trips on the horizon for the next year, a travel rewards credit card can help shave a few hundred dollars off the cost of your bookings, says Sara Rathner, credit card and travel expert at Nerdwallet. “The more you travel, the more you can benefit from a travel credit card, but even if you just travel once or twice a year, some travel cards are well worth it,” says Rossman. But, adds Rathner: “If you’re staying close to home, you may get more value out of a cash back card.”

To figure out how many trips it might take to get value from your travel rewards card, you’ll have to do some math. “This depends on the kind of card you’re using. It’s easier with a general travel rewards card, where points are worth an average of one cent each, making 50,000 points worth $500 of travel. Some cards offer higher point values ​​like 1.5 cents per point, so check to see what your card offers,” says Rathner. Airline and hotel cards can be more complicated because point values ​​depend on where and when you travel. “You may find you get more bang for your buck when you travel internationally or when you travel during off-peak times,” says Rathner.

Another way to do that math — without even factoring in points and miles — is this: Many travel rewards cards have an annual fee, but also offer other perks. “I like perks such as free checked bags. Many airline-specific cards let you and often your travel companions check bags for free. At $30 apiece, a family of four might spend $240 in bag fees on a round-trip flight, so even if you’re paying something like $95 annually for the card, it can more than pay for itself with just one round-trip, ‘ says Rossman.

3. Do you understand the types of travel rewards cards — and which might be right for you?

There are two major types of travel rewards cards: Airline- and-hotel specific cards and general travel rewards cards. Airline and hotel-specific cards tend to work best if you’re loyal to a particular airline or hotel chain, and they “offer some nice perks like priority boarding and room upgrades,” says Rathner.

Otherwise, Rossman says a general-purpose travel card is a better bet because you keep your options open, and Rathner likes them for their flexible options. “Transferable points programs [that allow customers to transfer reward points between participating programs instead of having all the loyalty points with just one airline or hotel]like American Express Membership Rewards, Chase Ultimate Rewards and Citi ThankYou points can be especially lucrative and provide built-in diversification benefits, since there are lots of ways to use your points by transferor to airline and hotel partners,” says Rossman.

With more than 6 in 10 US adults are likely to take at least one vacation this summer, according to a new study from Bankrate, you may be wondering if now’s the time to apply for a credit card with travel perks. But just because you have upcoming travel doesn’t mean you need a travel credit card. So here are five questions to help you figure out if one might be right for you.

Of the generic travel cards to consider, the Chase Sapphire Preferred card offers 5x rewards on travel purchased through Chase Ultimate Rewards, the Citi Premier card offers 3 points per $1 spent at gas stations, air travel and hotels and the Bank of America Travel Rewards credit card offers 1.5x points with no annual fee.

Premium travel cards such as the Sapphire Reserve, Amex Platinum and Capital One Venture X have other great travel perks too like airport lounge access, Global Entry and TSA Precheck waivers and travel insurance protections, but they have higher annual fees than other cards.

4. Do you know how to redeem your rewards and are you willing to put in the work to get them?

Rossman says you need to be willing to put in the work to manage your points and miles. “Travel rewards are often more lucrative than cash back, but they also tend to be more complicated. If you know what you’re doing and are willing to put in the work and are flexible enough to travel on the days with the best deals, travel cards can really work for you,” says Rossman.

Pros say one way to extract the most value from your travel rewards may be to transfer miles to a credit card airline partner and book a first-class international flight. “But that can be confusing and time consuming even for someone who knows what they’re doing. This might also involve booking with a partner’s partner, where a card issuer like Chase or Amex partners with a dozen or more airlines. Many of them also have partners via things like the Star Alliance or the Oneworld Alliance so the best deal might be to transfer to a partner and then book a flight on one of their partners, which often involves a bit of online sleuthing and at least one phone call,” says Rossman.

Finding award ticket availability, especially at a good rate, can be tricky. “Savvy travelers use tools like ExpertFlyer for help and often the best availability is unveiled many months, even a year before a flight,” says Rossman. Long story short, this is why most people are probably better off keeping things simple. “Use a cash back card or book travel at a standard valuation such as getting 1.5 cents per point on the Chase Sapphire Reserve or 1 cent per mile on the Capital One Venture,” says Rossman.

5. Have you explored other alternatives outside of travel rewards cards?

In reality, most people are probably better off with a cash back card, pros say. “Perhaps even a really simple, no annual fee 2% cash back card,” says Rossman. Bankrate research shows that most people prefer cash back anyway, because it’s so simple and universal.

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