5 Questions to Ask Before Getting Your Next Travel Credit Card

Blog Post11/10/2015
Debt Management

With fall in full swing and the holidays just around the corner, that also means it’s time for peak travel season. For many, it’s also an opportunity to cash in on some attractive signup bonuses offered by travel credit cards as you prepare for holiday spending. While it’s easy to get swept up in enticing, seasonal offers, do your research first to make the most of your credit —whether you’re flying or buying.

1. What Does My Credit Look Like?

It’s important that you understand what your credit scores are before you start the application process. Federal law gives individuals free access to their credit reports for each of the three credit reporting bureaus. This is a great opportunity to make sure there isn’t anything on your credit report that shouldn’t be there.

Credit reports can give credit card issuers a snapshot of what type of borrower you might be. If they see that you currently owe a lot of money, you might be seen as a higher risk. If you always pay your bills on time, you might be seen as someone worth extending credit to. Keep in mind that when you apply for any credit card and the issuer pulls your report, it counts as a hard inquiry and will be listed on your report. As a result, your score may be impacted, so be aware of this when applying for your travel card.

2. What Are the Perks?

If you do a lot of travel, especially around the holiday season, it might be worthwhile looking into a travel card for surprising perks and rewards. Some travel cards may offer earned miles on more than just one specific airline and a rewards rate of 2 percent. In order to compete with travel awards cards, airlines are also looking to sweeten their deals, offering free checked bags. Depending on the card and how often you travel, you could save hundreds of dollars over time, putting your savings far above that of general travel card rewards.

3. Does the Card Fit My Needs?

Think long and hard about the credit card you’re applying for. Do you have a loyalty to one brand? If so, co-branded credit cards from an airline or a hotel might be the best option. Do you like having a lot of choices when it comes to travel? Then you might want a card that’s attached to a transferable points program. This allows you to transfer points to a number of different loyalty programs.

Also look into which cards offer more benefits for domestic versus international travel, since their rewards programs can vary widely. Some travel cards waive foreign transaction fees, which is great for global travelers, while others will save you on frequent, short-haul domestic flights.

4. Do I Know all the Card’s Terms?

Being aware of the different terms that come with a credit card is extremely important. Make sure you understand whether the card has an annual fee and if this fee is waived for the first year. It’s also important to understand what kind of interest rate the card carries. A lot of credit card issuers are starting to get rid of transaction fees when you use their cards in foreign countries, but there are still some that may charge you an extra fee of up to 3 percent.

5. Are There Any Limitations?

Say you spent the year racking up mileage points only to be blocked from redeeming them during the holiday travel season due to blackout dates. While most commuters know when to book ahead of time, for many people, it’s hard to anticipate future travel plans.

Since airlines and hotels are constantly changing their rules, you want a card that’s flexible, so you can use it for the travel you want, when you want it.  Look for a card that has no blackout dates for travel redemption. No matter what travel card you go with, always check for blackout dates before booking any trips.

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