Passport, Malaria Pills and…a Different Credit Card?
Travel credit cards lost some of their sparkle when the British Airways 100,000-mile signup bonus and the Capital One Venture’s Match My Miles program ended, but they still have substantial value for frequent flyers both at home and abroad. Domestic cards, though, are judged on slightly different criteria than their foreign counterparts.
Domestic: from sea to shining sea, on any airline you want
If you travel within the country frequently, you probably have different priorities than someone who’s often flying abroad. You may be more willing to sacrifice comfort for a cheap ticket on a one-hour flight from Boston to Newark, but would spring for a mimosa to ease the 18-hour flight to Hong Kong. In that case, you’d want a travel rewards card that allows you to:
[*]Earn and use miles on multiple airlines
[*]Book through travel sites like Expedia
[*]Earn bonus miles on hotels, rental cards and such
Because travel within America is so highly variable and can be judged on so many different metrics, you’ll want a card that lets you earn miles as easily on Southwest as it does on Delta. If you get tied down to one airline, you might find yourself swallowing $200 in higher ticket prices or having to fly from Albuquerque to Los Angeles by way of Chicago.
The Discover Escape and Capital One Venture Rewards both give travel credits rather than regular miles. With, say, the Chase Sapphire, you receive a rewards bonus for buying your ticket through Chase’s Ultimate Rewards booking service. Other branded cards will pay out directly in their airline’s miles or hotel’s points. The Escape and Venture, though, simply give a travel credit to cover expenses you’ve already incurred. You can trade 20,000 Discover miles for a $200 credit that defrays a $100 hotel stay, $50 in gas and $50 in car rentals. Traditional airlines credit cards often require you to save up enough miles to purchase a ticket: a flight from JFK to SFO on Virgin America would cost 11,000+ miles, but you couldn’t redeem 5,000 miles and pay the rest in cash. What’s more, you’d still have to pay the taxes and fees on your ticket even after forking over the miles. With a flexible travel miles credit card, you can split the ticket’s cost between miles and dollars.
International: big alliances fly, foreign transaction fees don’t
When traveling abroad, inter-airline flexibility is somewhat less of an issue. Since so many airlines or airline partnerships fly all around the world, you can gain value by racking up miles through a loyalty program independent of your credit card. You should try to find an alliance that covers most of the destinations you fly to.
Airline alliances allow for some interesting opportunities. Take, for example, Virgin Atlantic’s partners, which include Air China, All Nippon Airways, and the other Virgin lines. Of the alliance, Virgin Atlantic’s the go-to line for flights from the U.S. to England. However, redeeming miles comes with a catch: the miles cover airfare only, not taxes and fees, and Virgin Atlantic has a notoriously tax-heavy ticket price. On a flight from SFO to Cape Town, South Africa, taxes make up 2.8% of the ticket price on American Airlines but are a whopping 13.8% on Virgin. Savvy travelers can, however, do an end run around Virgin’s end run: booking on affiliate All Nippon Airways costs the same number of miles, but far less in fees.
Your international travel card should have no foreign transaction fees. Most credit cards charge 3% of any transaction processed overseas; many credit unions charge only 1%. However, the best travel cards swallow the fee altogether, resulting in significant savings. Take the Capital One Venture, which has a $59 annual fee. If you spend only $2,000 abroad, you’ll make up for the fee in F/X savings alone. While this is becoming standard with the major international travel cards, it never hurts to make sure.
The fewer restrictions, the better
Credit cards often ask you to give up a little freedom for a little more bang for your buck. The classic example is retail credit cards, which give high rewards on in-store purchases but are mostly useless outside of their own store. But when it comes to airlines, flexibility doesn’t necessarily have to be sacrificed. If you want the ability to book and fly wherever you want, whenever you want. Accepting a card that limits your options too much may cost you more than you earn in rewards.
I've been trying to decide between Capital One Venture and the Chase Sapphire. I think the turn off for me with the Sapphire is that I wont get any type of rewards when I book my trip thru Expedia and Hotwire which I do very often. It seems like with the Sapphire, its too many restrictions on how you can earn points. They can only be earned thru a Preferred Merchant. If I'm wrong, please correct me. I'm still struggling with the decision but this blog is helpful.