Can't decide between an airline credit card or travel rewards card? Ask yourself these 3 questions

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With the right type of credit card, you could save serious money on your next trip. The tricky part is choosing the right one: a standard travel rewards credit card or an airline credit card.

There are some key differences between the two types of credit cards, and personal considerations that may affect your decision. To help you hone in on the right card for you, CNBC Select outlines three questions to ask yourself before applying.

These two credit card categories may sound interchangeable, but they are in fact very different.

An airline credit card is a co-branded credit card for a specific airline, and its rewards can only be redeemed with that airline and its airline alliance partners. For instance, the miles you earn with the Delta SkyMiles® Gold American Express Card can only be redeemed with Delta or its SkyTeam alliance partners, such as Air France or Aeroméxico.

Though airline credit cards are less flexible in terms of award-redemption opportunities, they offer benefits catered to those who are loyal to a particular airline. These perks include airline lounge access, complimentary checked bags, waived foreign transaction fees and benefits designed to help you earn elite status faster.

For example, if you hold the Delta SkyMiles® Reserve American Express Card, you receive access to Delta Sky Club® lounges and free checked bags when you fly Delta. (Effective 2/1/25, Reserve Card Members will receive 15 Visits per year to the Delta Sky Club; to earn an unlimited number of Visits each year starting on 2/1/25, the total eligible purchases on the Card must equal $75,000 or more between 1/1/24 and 12/31/24, and each calendar year thereafter.)

A travel rewards credit card, earns points that can be redeemed for a variety of travel. You can typically use travel rewards to book directly through the bank's travel portal or by transferring points to hotel or airline partners.

For example, the Capital One Venture X Rewards Credit Card (see rates & fees) lets you earn Capital One miles, which can be redeemed through the Capital One travel portal for different travel purchases including flights, rental cars and hotels. You could also transfer your Capital One miles to one of its many airline and hotel partners.

Both types of credit cards present great opportunities to save money on travel, and one is not inherently better than the other. Everyone has different needs, travel habits and preferences, so it's best to analyze your travel style and find the card that works best for you.

For starters, ask yourself the following three questions:

1. How do you typically travel?

If you tend to fly more than three times per year, an airline credit card may be a solid fit, especially if you live in a city that serves as a hub for a particular airline. For example, Atlanta is a hub for Delta, so a co-branded credit card such as the Delta SkyMiles Reserve American Express Card could make sense if you live near Atlanta.

If your travel style varies — a mix of cruises, road trips, train rides, etc. — a travel rewards credit card may better suit you since you'll be able to accrue and redeem points for more than just airfare on one airline.

2. Where do you want to go?

Once you have a destination in mind, it's easier to know which credit card to get.

If you'd like to travel around Europe, you'll probably fly with more than one airline, use other modes of transport and stay at different hotels. In that scenario, earning transferable points such as Amex Membership Rewards® points or Chase Ultimate Rewards® points makes more sense than earning airline miles as they offer greater flexibility.

Some of the best cards for earning these points are the Chase Sapphire Preferred® Card and the American Express® Gold Card.

On the other hand, if United Airlines flies everywhere you want to go and you're staying with friends, the United Club℠ Infinite Card is a great choice. It earns United miles, comes with United Club lounge access and gets you free checked bags.

3. What is your budget for an annual fee?

Many airline credit cards and travel rewards cards come with an annual fee. Some cards offer solid benefits for a fee that's under $100. But cards that allow you to earn more points and miles and come with a wide variety of benefits can have a much higher annual fee.

While paying an annual fee isn't necessarily a bad thing, it's important to remember to stay within your budget and not pay for a new card when you won't be able to maximize all its benefits.

Here are CNBC Select's picks for the top airline credit cards:

• Best for American Airlines: Citi® / AAdvantage® Platinum Select® World Elite Mastercard®
• Best for JetBlue: JetBlue Plus Card
• Best for Delta: Delta SkyMiles® Platinum American Express Card
• Best for Southwest Airlines: Southwest Rapid Rewards® Priority Credit Card
• Best for United Airlines: United℠ Explorer Card
• Best for Alaska Airlines: Alaska Airlines Visa® credit card 
• Best airline card with no annual fee: American Airlines AAdvantage® MileUp®

Here are CNBC Select's picks for the top travel rewards credit cards:

• Winner: American Express® Gold Card
• Runner-up: Capital One Venture Rewards Credit Card (See rates and fees)
• Editor's choice: Capital One Venture X Rewards Credit Card
• Best welcome bonus: Chase Sapphire Preferred® Card
• Best for luxury travel: Chase Sapphire Reserve®
• Best for lounge access: The Platinum Card® from American Express
• Best for no annual fee: Discover it® Miles
• Best for paying rent: Bilt Mastercard®
• Best for low interest: Choice Rewards World Mastercard®
• Best for students: Bank of America® Travel Rewards for Students

When you're deciding whether to apply for an airline card or a travel rewards card, you need to consider the advantages and drawbacks of each choice.

Airline cards are helpful if you're loyal to a specific airline because you'll earn miles with that program. In addition, many airline cards can help you earn elite status more easily or may grant you elite-like perks like free checked bags, priority boarding and access to the airline's airport lounges. But there are downsides to earning miles with a single airline because it may not fly where you want to go or may not be the best deal for that particular route.

Travel rewards cards offer the most flexibility. Many travel cards allow you to transfer the rewards you earn to various airlines and hotels, allowing you to pick the best deals. This type of card also typically offers a variety of general travel benefits, such as trip delay insurance, lost baggage coverage and access to larger networks of airport lounges. On the flip side, with a travel rewards card, the best redemptions can be harder to find or complicated to book and you usually won't get airline-specific benefits.

Keep in mind, if you've assessed your situation and feel you can benefit from both types of cards, you can have one (or more) of each card type.

Airline credit card: Pros and cons

Pros

• Earn miles with your favorite airline
• Fast-track your way to elite status
• Unlock valuable benefits with a specific airline (priority boarding, free checked bags, airline lounge access, etc.)

Cons

• Locked into a single loyalty program
• Limited options for using rewards for other types of travel
• Fewer general travel perks, like travel insurance

Travel rewards card: Pros and cons

Pros

• Flexibility to use rewards for hotels, rental cars, flights and more
• Exceptional travel protections
• Versatile airport lounge access benefits

Cons

• Few, if any, airline-specific perks
• Certain redemptions are more complicated
• May not be able to transfer rewards directly to your favorite airline

When deciding between an airline credit card or a travel rewards credit card, ask yourself the above three questions to narrow down the best choice for your travel needs.

As long as you earn the welcome bonus, make the most of your card's travel benefits and stay within your budget, either type of credit card can enhance your travels while simultaneously saving you money on flights and other expenses.

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For rates and fees of the American Express® Gold Card, click here.

For rates and fees of The Platinum Card® from American Express, click here.

For rates and fees of Discover it® Miles, click here.

Information about the American Airlines AAdvantage® MileUp®, Alaska Airlines Visa® credit card, Bank of America® Travel Rewards for Students, Citi® / AAdvantage® Platinum Select® World Elite Mastercard® has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.