With the right travel credit card, you can access luxury for less, earn discounted flights and hotel stays, and even net hundreds of dollars in cash back every year. But with so many different cards offering a range of perks and redemption options, it's easy to get overwhelmed.
To determine which card offers the best deal overall, CNBC Make It analyzed 35 of the most popular travel cards in the U.S. Using a sample budget based on data from the Bureau of Labor Statistics, we estimated how much money each card would save the typical American, as well as frequent travelers, after five years.
We also evaluated the ease of use of each card and potential downsides, including annual fees and interest rates.
Based on the data, here is our No. 1 choice, our runner up and some other good options that may be better suited to your lifestyle.
Capital One's Venture card offers the best return after five years for both average and frequent travelers, according to our analysis, when cardholders opt to redeem their miles to pay for travel expenses. That's largely because it has the best flat-rate offer of two miles for every dollar you spend. On top of that, the card offers 10 miles per dollar spent booking a place to stay on Hotels.com/Venture. Keep reading for our full analysis of the Capital One Venture card.
Despite its $450 annual fee, the Reserve is an excellent choice. It promises three points for all travel and dining expenses and one point on all other purchases, plus a sign-up bonus that amounts to $750 if redeemed for travel and an annual travel credit of $300. Chase also has a number of hotel and airline transfer partners that allow you to redeem points at an even higher value. What's more, the card offers premier benefits such as complimentary Priority Pass Select lounge access. Keep reading for our full analysis.
To determine which travel cards offer the best deals, CNBC Make It compiled a list of 35 highly rated travel credit cards. We vetted each card based on its reward offers, introductory and eventual APR, annual fee, bonus, recommended credit score, late fee, balance transfer fee, foreign transaction fee, redemption rates, transfer options, customer reviews and extra perks.
We then estimated how much money each card would save the typical American and a frequent traveler after one year, two years and five years. Our assessment heavily weighs the five-year return to avoid a large sign-up bonus skewing the results. We also assume that most people want a great card that they can stick with for years, especially since bouncing from card to card can be bad for your credit score.
To estimate the return, we used expenditure data from the Bureau of Labor Statistics to make a sample budget broken down by average annual spending in categories like gas ($1,909), groceries ($4,049), dining out ($3,154) and general purchases ($12,833). The general spending category includes shopping, entertainment, public transit, vehicle expenses other than gas, some household costs and travel expenses like airline fares ($403), hotels ($475) and vehicle rentals ($64).
For the average-traveler budget, travel expenses were drawn directly from the BLS. For the frequent-traveler budget, we revised these categories upward based on the expert recommendation that you should spend at least $8,600 on travel and dining each year to make getting a travel card worth it. We increased the expenses proportionally to the average budget, estimating annual airfare costs of $2,300, hotel costs of $2,700 and vehicle rentals of $400.
We also include a range for the estimated return because, in most cases, the value of a credit card's rewards vary depending on how they are redeemed. For instance, with the Chase Sapphire Preferred you can redeem rewards for cash back at 1 cent per point, or you can redeem for travel at 1.25 cents per point. We heavily weighed the top of each range in our consideration to highlight the potential of each card.
The estimates also incorporate bonuses and perks like travel credits that can be used to pay for flights. (Less quantifiable perks like TSA Precheck credits and free bag checking were considered for each card but not included in the estimated returns.) Estimates assume you have a high credit limit and that you use your card for 90 percent of the purchases you make in these categories, accounting for instances where you have to use cash or shop somewhere that doesn't accept your card. They also assume you don't carry a balance.
In the case of the Discover It Miles card, calculating the return was relatively easy, as users simply earn 1.5 miles per dollar on all purchases and can redeem at a rate of 1 cent per point. Because Discover matches all your miles your first year, we doubled your savings that year. For a card like the Uber Visa from Barclays, meanwhile, we calculated the potential returns in each category, since the card offers 4 percent back on dining, 3 percent on hotels and airfare, 2 percent on some online purchases and 1 percent on all other purchases.
Sometimes we had to make assumptions. For instance, the Capital One Venture card rewards every dollar you spend booking on Hotels.com/Venture with 10 points, so we assumed you'd book 80 percent of your out-of-town lodging through Hotels.com/Venture throughout the year.
Once we had our estimates, we then weighed the returns against other factors including interest rates and fees, practicality, bonuses and other perks, such as lounge access and insurance coverage. Reward transfer opportunities were a top consideration, since redeeming your rewards through a frequent flier or hotel program can increase their value immensely or earn you luxury benefits for an affordable price.
We also considered redemption options, since a card that reimburses general travel purchases made anywhere by offering you statement credit in your account is significantly more convenient than one that requires you to use your points or miles via a specific travel portal.
Co-branded airline and hotel cards did not make our final list due to their often complex reward systems and potential to limit your travel options to a specific brand. But their lucrative offers certainly make them worth considering for some brand-loyal travelers.
Notably, none of the cards we include on this list have a foreign transaction fee.
For a travel card to be worth it, one expert recommends you should spend at least $8,600 on travel and dining each year. That comes out to be about five or more trips a year. Of course, the cost of a trip varies widely, so it's worth crunching the numbers yourself to see how much you spend on flights and hotels. A travel card can also come in handy for moderate travelers who dine out frequently, even if they do so near home, since many travel cards reward restaurant spending.
Travel cards can pay off for frequent travelers primarily because they offer the best rewards on travel expenses. Some cards, for instance, offer five points for every dollar you spend on a plane ticket. Cash back cards, on the other hand, generally offer a lower return of about 1 to 2 percent back, since flights fall into the general spending category. Plus, travel cards offer more valuable ways to redeem points toward travel, meaning you can use your rewards to pay less for a flight or hotel stay than you would using cash — sometimes much less.
Most travel cards that offer extra points for travel purchases let you book flexibly. That means you get points no matter if you book directly through your issuer's travel portal, such as Chase Ultimate Rewards, or use a site like Expedia or Kayak, or even purchase directly from an airline or hotel. Whenever you're booking a trip, it's easiest to find the best deal by comparing costs across many sites.
With some cards, you're more limited when you book travel using your rewards. If you have the Chase Sapphire Reserve and want to book a flight with points, for example, you have to purchase it directly through their portal. Capital One, meanwhile, lets you use Venture miles to fund travel purchases made through other sites. They simply reimburse the expense by removing it from your account balance.
Beyond rewards, there are perks. Some cards offer luxury lounge access when you're waiting to board a flight. Others provide free baggage check so you don't have to lug around your suitcases. Many offer extensive travel insurance, too, such as rental car insurance and reimbursement for lost luggage. If you're on the go a lot, these perks alone can make having a travel card worth it.
As with all rewards cards, it's important to pay your bill in full each month or the interest you owe will wipe out your potential gains, so travel cards are best for those who don't carry a balance.
Of all the general travel credit cards we assessed, the Venture card promised the best return after five years.
That's largely because the card has the best flat-rate offer of two miles for every dollar you spend, plus 10 points for every dollar spent booking a place to stay on Hotels.com/Venture. If you spend $3,000 on it within the first three months after opening your account, you can tack on 50,000 bonus points too, equal to $500 in travel. And compared to many travel cards, its annual fee is relatively modest: $95 after a free first year.
In terms of perks, Capital One offers cardholders a $100 credit toward TSA Precheck or Global Entry, both of which expedite the customs process for international travelers.
Note that with this card you can't transfer your points to an airline or hotel rewards program, and redeeming your points for cash back instead of travel credits will lessen the value of your reward. While one point is equal to 1 cent for travel, it only gets you 0.5 cents in cash.
Despite these drawbacks, the Venture card is our top choice because it requires relatively little effort to save travelers a lot of money.
The Chase Sapphire Reserve has an intimidating $450 annual fee, but this premier card is a great option nonetheless. The fee is offset by its offer of $300 in travel credits every year, and the rewards add up. For every dollar you spend on travel and dining, you earn three points, plus one point on all other purchases. When you first get the card, you also qualify for 50,000 bonus points as long as you spend $4,000 in the first three months of opening your account.
What makes the Reserve special is its redemption options. Every point you redeem on travel is worth 1.5 cents. That means its 50,000-point bonus can have a value of $750. Chase also offers 13 transfer partners, so you can trade your points in for United MileagePlus miles, for example, and find a seat in business class.
The card's premium perks include Priority Pass Select lounge access in more than 1,000 airports throughout the world and extensive travel coverage in the event of trip cancellation or lost luggage.
Its counterpart, the popular Chase Sapphire Preferred, only requires a $95 fee after a free first year, but it doesn't provide the annual $300 travel credit. It offers lower reward rates on travel spending and a lower redemption rate. According to our analysis, even with the fee, the Reserve will save travelers more over five years.
If you have particular priorities, a different card might be best for you. Here are some other great options.
Elite travelers want luxury, and with the Platinum Card from American Express, that's exactly what you get. The card offers Priority Pass Select membership and complimentary access to the highly regarded American Express Centurion lounges, plus Delta Sky Club access when you fly directly with Delta. As for hotel perks, cardholders receive free nights and other benefits with the American Express Fine Hotels & Resorts program, and they qualify for Gold elite status with Hilton and Starwood hotels.
The card does require a hefty $550 annual fee but users also receive up to $200 per year in Uber credits and $200 in annual airline credits which you can use to check a bag or purchase in-flight refreshments. For rewards, the card offers five points on all hotels and airlines booked with American Express Travel, two points on other travel bookings through the site, such as vacation packages, and one point on all other purchases. When you sign up, you also receive 60,000 bonus points as long as you spend $5,000 in the first three months. That's $600 toward travel or gift cards.
The Platinum card is technically a charge card, which is similar to a credit card, except with a charge card you have to pay off your balance in full each month or you'll be hit with a late fee. If you want to have the option to carry a balance on the Platinum card, you have to enroll in the card's Pay Over Time feature.
If you care more about savings than perks, there may be better premier options, such as the Barclays Arrival Premier World Elite Mastercard: With a modest $150 annual fee and an unlimited two miles per dollar on all purchases, that card can earn you more over five years, according to our analysis.
But five points back on all hotels and flights can add up if you travel a lot. And if you're looking for the most comprehensive set of premier benefits, the Platinum Card from American Express is the way to go.
If you want to rack up rewards as you travel and get straight cash back, the Uber Visa from Barclays is your best choice.
The card promises 4 percent cash back on restaurant spending, a return that's hard to beat even among cash-back cards. It also offers 3 percent on hotels and airfare purchases, 2 percent on some online purchases and Uber rides, and 1 percent on all other purchases.
It now offers a $100 sign-up bonus and doesn't require an annual fee. If you spend $5,000 a year, it promises a $50 credit for online subscription services.
A lot of travel cards offer cash back at unfavorable redemption rates — for instance, the Chase Sapphire Preferred gives you 1.25 cents per point on travel costs, but only 1 cent per point in cash — so if you want to redeem for cash, the Uber Visa from Barclays will earn you the most.
The Bank of America Travel Rewards Card makes life easy: You don't have to pay an annual fee or keep track of your spending. You simply get 1.5 points for every dollar you spend on any purchase, plus a 20,000-point bonus if you spend $1,000 in the first three months of getting the card.
What sets the card apart from its close competitor, the Discover It Miles, is its bonuses for Bank of America customers. Those with a Bank of America checking account get a 10 percent bonus on all their rewards, which effectively earns them 1.65 points per dollar. Meanwhile, if you have a Bank of America account or Merrill Edge or Merrill Lynch investment accounts with a combined $20,000 in them, that bonus turns into 25 percent, and it can be as high as 75 percent if your accounts hold $100,000.
Like this story? Subscribe to CNBC Make It on YouTube!