Travel Credit Cards Promise Savings, But At What Cost?

travel credit cardsTravel Credit cards that offer a sign-up bonus or cash back, or accumulate points that can be translated into savings on travel are surely worth a look. If just changing from one card to another will bring free flights, hotel stays, car rentals or funds to buy gear, why would any budget-minded traveler not do that? Often, we have to look beyond the headline to get to the real story.

Cardhub is back this week with an updated list of the Best Travel Credit Cards for 2013 featuring the best deals, selected from more than 1,000 different offers. Hoping to “help consumers save as summer vacation planning gets into full swing,” Cardhub told Gadling in an email this week that “the right credit card can save consumers hundreds of dollars on summer travel.”

That claim looks to be valid too. Switching to the Chase Sapphire Preferred Card, for example, will bring a 40,000-point reward bonus.

Thinking along the lines of airline points, that’s about what it takes for a round-trip ticket to Europe from North America. True, but airline points are not what we get with this offer. Those 40,000 points are redeemable for $500 in travel accommodations booked through Chase’s Ultimate Rewards program or a $400 statement credit. To get that, cardholders are required to spend $3000 during the first three months the card is open.Still, the most conservative result, $400 credit on the account, is a nice payday for doing very little work. But if transferring a balance from an existing account, there is a $150 charge, which eats away at the gain. Traveling with the card brings some advantages though. Chase charges no foreign transaction fees for purchases made abroad and there is no annual fee for the first year ($95 after that).

Some other factors to consider include the effect of trying to get this card on your credit score, even if declined. Planning on a major purchase in the near future, like a home mortgage? Real estate expert Anthony Gilbert lists applying for new credit cards and closing old ones as two of the six top things not to do before applying for a mortgage in a RealFX article.

“Too many credit inquiries over a relatively short period of time, are never a good thing for your credit score,” says Gilbert, adding “when you close any credit card, you may easily, yet innocently raise your “debt to credit limit ratio” – which can preclude a mortgage approval, or cause you to pay a higher interest rate.”

Speaking of credit score, you’ll need a pretty good one for the Chase Sapphire Preferred Card. The people at CreditKarma say the average score accepted by Chase is 730, considered excellent by those who track such things.

That’s not to say credit card savings are not out there. The $0 fraud liability guarantees, the lowest possible currency conversion rates and complimentary rental car insurance coverage offered by many cards can add up fast.


[Photo credit – Flickr user theMaykazine]

Save On Road Trip Expenses With The Right Credit Card

road trip

Planning a road trip anytime soon? Odds are the price of gas is a consideration if not a major concern. As gas prices continue to rise, travelers are looking for new ways to save. Tuning up the car, using smartphone apps to find the lowest price around, inflating tires properly and other money-saving measures can help. Using the right credit card can gain big savings too.

The current national average is $3.78 per gallon – nearly 14 percent higher than it was at the beginning of the year – meaning that gas prices exceed $4 per gallon in some states. Having the right credit card can help. But which to choose? Of the two types of credit cards – gas station-affiliated cards and generic gas cards- there are more than 1000 offers out there right now.

“The credit card market continues to offer surprisingly lucrative gas rewards without requiring consumers to fill up at one particular station or another,” says credit card authority Odysseas Papadimitriou, former Capital One executive and CEO of Card Hub, a credit card rating organization that just released its list of the Best Gas Credit Cards.

According to Card Hub, generic cards used for gas can produce some of the best savings.

The best generic cards?
Pentagon Federal Credit Union Platinum Rewards Card – This one offers those who pay at the pump points equivalent to 5 percent cash back on gas at any station plus 3 percent cash back at supermarkets and 1 percent on other purchases. While the card has no annual fee, belonging to PenFed Credit Union costs $15 and members do not have to be affiliated with the military.

Blue Cash Preferred Card from American Express – This card gives 3 percent cash back at gas stations, 6 percent at supermarkets and 1 percent everywhere else. The $75 annual fee is offset by a $150 initial bonus for spending $1,000 in the first three months.

TrueEarnings Card from American Express - Costco members get 3 percent cash back on gas purchases up to $4,000 (1 percent thereafter), 2 percent at restaurants, 2 percent on travel and 1 percent on everything else.

But what about gas station-sponsored cards?

“When it comes to choosing a station-specific gas credit card, it’s important to remember that value is inherently conditional,” says Papadimitriou. “In other words, you’ll have to get gas at the right station and oftentimes spend a certain amount each month or year in order to qualify.”

The best gas station cards include:

Marathon Credit Card - This brings a 25-cent rebate, but the offer has a catch. That $.25 is for each gallon of Marathon gas purchased during months a cardholder charges at least $1,000, $0.15/gallon for spending between $500 and $999.99 and $0.05 for spending less than $500. This card does not have an annual fee or an initial bonus.

Chevron & Texaco Credit Card – This card provides a $0.30/gallon, up-front discount on Chevron and Texaco gas for the first 60 days after opening the account. After that, you get $0.20/gallon off during months that you spend more than $1,000 in qualifying purchases and $0.10/gallon off when you spend $300-$1,000. Qualifying purchases include most charges made with your card with a maximum of $300 in discounts each calendar year.

Card Hub also notes other ways to save on gas, like shopping at certain grocery stores. Kroger, Safeway and others offer discounts at affiliated gas station chains based on how much you spend at their stores. For example, spending $100 at Safeway will save you $2 on the next 20 gallons of ExxonMobil gas you buy.

That idea is especially powerful when travelers combine it with the respective station’s co-branded credit cards.

Looking for other ways to save on gas? Check out this video:


[Photo credit – Flickr user little peppercorn]

Travel Credit Cards Worth A Look In 2013

travel credit cardsHaving the right travel credit card can save hundreds of dollars via rewards, low interest rates, and credit-building capabilities. Knowing which one to choose is another matter. The right choice can make a significant contribution to our travel budgets. This week, online card comparison site Card Hub released its list of Best Credit Cards for 2013, a number of which are designed with travelers in mind.

Here are a few of the highest-rated cards that the experts at Card Hub say we should consider.

At the top of the list for travelers, the Capital One Venture Card, has long been one of the most popular and rewarding credit cards. This one provides those with excellent credit the equivalent of 2% cash back across all purchases. Spend $1,000 during the first three months to score a $100 initial rewards bonus. A $59 annual fee doesn’t take effect until the second year.

The PenFed Premium Travel Rewards American Express Credit Card, also designed for those with excellent credit, has the miles equivalent of 5% cash back on airfare purchases, regardless of the airline flown. Unique to this card, benefits can be redeemed for either cash or travel. That’s a flexible option that not all cards offer.

“It therefore saves you from having to peruse rewards flights in order to see how much your miles are worth and provides far more redemption flexibility than most other cards in its class,” said CardHub in a statement.To get the PenFed Premium Travel Rewards American Express Credit Card, travelers with great credit will need to join the Pentagon Federal Credit Union (anyone can) for a $15 fee.

PenFed also has a Platinum Rewards card that is one of the best gas credit cards on the market. Road trippers will like the equivalent of 5% cash back on every dollar you spend at stand-alone gas stations with no annual fee.

Not so “excellent” in the credit arena? There are cards for you too.

travel credit cardsTravelers with limited or no credit might like Capital One Cash Rewards for Newcomers. This non-student card is good for consumers just starting to establish their credit worthiness, as it does not charge an annual fee but still offers 2% cash back on travel as well as 1% on everything else. That combination can often be hard to find.

Students might like the Journey Student Rewards card from Capital One. This one is designed to give rewards and encourage good credit practices at the same time.

In addition to generous rewards without charging an annual fee, the Journey Student Rewards card from Capital One also promotes good habits. On top of the 1% base rate you earn on all purchases, you get a 25% rewards bonus each month you make an on-time payment.

Bad credit? All is not lost. Secured or partially-secured cards can be the way back from dark credit days

The fully-secured Harley Davidson Secured Credit Card is one of the best secured cards on the market. Normally marketed to people with bad credit, this fully secured card is unique in that it gives rewards and does not charge an annual fee. After 12 months of responsible use, cardholders may be considered for an unsecured credit card.

Capital One Secured MasterCard is actually a partially-secured card. Charging a $29 annual fee, making it the least expensive partially-secured card on the market, cardholders may get a credit line that is in excess of their security deposit, giving you more available credit and expediting the credit building process.

Before applying for any cards, be sure to know the details and limit the number of cards applied for. Excessive inquiries into your credit worthiness can hurt your ongoing credit score.

Looking for more sources of travel credit card information? CreditCardCouncil.com offers these suggestions:


[Photo Credits- Flickr user Andres Rueda]