How to Compare Travel Reward Credit Cards: part 2

Travel Reward Credit Card Best Buys Travel Reward Credit Card FAQ's Have a question? Send in your question and we'll do all we can to help answer it. Where appropriate user questions will be added to the FAQ's for future use.

What to look for...

When choosing a travel reward credit card there are quite a few factors you should take into consideration before you settle on your preferred choice of travel reward credit card.

The first, and possibly most important factor is first deciding what travel rewards you would like to earn and what travel services you currently use that perhaps you would like to save some money on.

- What travel rewards will you be able to earn?
Travel reward credit cards offer a range of different travel services that you can spend your well earned points or miles on.

However, the actual travel rewards on offer will depend on the travel reward credit card you choose. Travel reward credit cards offer travel rewards including flights, hotel stays, package holidays, cruises, entertainment or days out in the U.K. and even merchandise.

Airline travel reward credit cards for example, will allow you to earn flights on their airline and partner airlines. Whereas, a hotel travel reward credit card will allow you to earn hotel stays at their hotel chain.

Some travel reward credit cards will allow you to spend your travel points or miles on a wide range of travel services, from flights and hotel stays to package holidays, cruises and entertainment.

- ...and which travel companies can you spend your travel points or miles with?
Once you have decided upon which travel rewards you would like to earn and have a good idea about the travel companies you often use, you can then start to compare travel reward credit cards and look to see which cards offer the rewards you want, with the travel companies you use.

It is important that you choose a travel reward credit card that allows you to earn travel rewards you know you will actually use and benefit from. There isn't a huge amount of point in getting travel rewards for a budget European airline if you frequently travel to America on business, or you visit friends and family in Australia, unless of course, you also fly to and around Europe on a regular basis.

- How many travel points or miles will you earn?
Different travel reward credit cards will offer different amounts of travel points or miles for each pound you spend in purchases. Some cards also offer bonus points or miles when you first use the card to help get you started.

If you are looking to choose a specific airline or hotel travel reward credit card you may find you can earn double or extra points or miles when you fly on their airlines or stay at their hotel chains.

Comparing travel reward credit cards by the actual number of travel points or miles that you will earn can be a little misleading, so it's always best to first narrow down your choices by the travel rewards you will be able to earn and the travel companies you will be able to claim free travel with.

Different travel reward schemes may require more or less travel points or miles for a reward, so even if you earn less points for your pound on one travel reward credit card, you may find the card also requires less points for the same or a similar travel reward than a travel reward credit card that offers more points per pound.

- Does the travel reward credit card offer any additional travel perks?
Quite often specific travel reward credit cards for a particular airline or hotel chain will give you automatic access to their membership program.

Travel companies' membership programs offer their members exclusive benefits and perks, including priority check-in, access to VIP airport lounges, upgrades, special offers and discounts and other extra services.

- What is the typical APR, or interest rate for purchases?
Travel reward credit cards require you to spend money on purchases with the card to earn travel points or miles, so it's important to know how much interest you will be charged for the credit you use.

Unless you always clear your credit card balance in full and on time each month, you will be charged interest on your outstanding balance. So choosing a travel reward credit card with a competitive interest rate is important.

What to watch out for...

- Is there an annual fee to pay, and if so, how much is it?
Some travel reward credit cards, especially the airline specific ones, carry an annual fee. The annual fee is an amount of money you have to pay each year for holding the account.

If the travel reward credit card has an annual fee, it will also be reflected in the typical APR, so it may show a much higher typical APR than other travel reward credit cards, even though the interest rate on purchases is the same.

For example, a travel reward credit card with an annual fee of £60 and a standard purchase interest rate of 15.9% p.a., may show a typical APR of 20.8%. However, a card with no annual fee but the same 15.9% p.a. purchase rate would show a typical APR of 15.9%.

- Will the travel points or miles you earn expire?
Some travel reward credit cards will expire your travel points or miles after so many years if you have not redeemed them for travel rewards.

If you are looking to save up as many points or miles as you can before you redeem them for a travel reward, it's important to find out if and when they will expire so you can remember to redeem them while they are still valid.

This is an especially important consideration if you may not use your travel reward credit card that often, and will therefore earn travel points or miles on a more gradual basis.

If the travel points or miles do have 'expiry dates', it will usually be around 3 years, so you will still have plenty of time to save up your points or miles for a travel reward.

- Cash transactions
If possible, you should always try and use your debit card for any cash transactions that you need to make.

Using a travel reward credit card for cash transactions will not earn you any travel points or miles, and they may also carry a higher interest rate and handling fees.

Cash transactions include withdrawing cash from an ATM machine, getting 'cash back' at the supermarket, buying foreign currency or traveller’s cheques and also gambling transactions.

Don't forget!

- You can only earn travel points or miles on your purchases
Travel reward points or miles can only be earned on purchase transactions that you pay for with your travel reward credit card, this includes goods or services bought from retailers or companies.

Unfortunately, you can't earn travel rewards on cash transactions or balance transfers.

- Check for expiration dates
As mentioned above, some travel points or miles that you earn will expire after so many years. It's important to find out if the travel reward credit card you take out expires the points or miles you have earned after a certain period.

If your travel points or miles do expire, then find out how long you have to save them up and redeem them for a travel reward whilst they are still valid.

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