How to choose the best credit cards for travel (By David Mai)

 

Traveling in a Post-Pandemic World

If there was one thing the pandemic taught us, it was that everybody became hesitant and unwilling to travel. Shaver (2020) of The Washington Post shared an interesting tidbit in which Americans were actually staying home less during the pandemic, according to research that tracks users' smartphone data. 

The quarantine fatigue affected nearly everyone who lived an active lifestyle or loved to be out and about in the world. It was simply not a safe time, and too many regulations were in place that deterred consumers from traveling for leisure. Consequently, the COVID-19 pandemic significantly impacted the travel and hospitality industry. Yet, there is no doubt that people will yearn to travel again when the pandemic is fully lifted. Around this same time, credit card companies have developed unique ways to retain business with consumers who look to maximize rewards and benefits for their journey.

A Little Preparation Goes a Long Way

            In the world of personal finance, “hacking” and utilizing credit cards can be a powerful ally when it comes to travel ventures. Consumers are often left wondering: with so many options, how could they select the right credit cards for their needs? 

            Reporter White (2021) of CNBC discussed two possible choices as Chase Sapphire Preferred/Reserve continued to market welcome bonuses and other benefits that have attracted the consumer’s attention. This includes (but not limited to) a whopping 80,000 bonus points (or $1000 redemption) when one spends $4,000 in the first three months after signing up. Like many other credit card companies, Chase understood that they would need more than just points to attract consumers. The Chase Sapphire Preferred/Reserve credit cards have been touted on Chase’s website as one of the top-tier credit cards. A complete list breaking down the benefits and details can be found on their website.

Choosing Among Competition

NerdWallet (2021) reported that the Chase Sapphire Preferred card continues to rank high among the best rewards credit cards available. In looking at competitors, American Express, Capital One, and World of Hyatt are just a few of the companies on a list of the 14 best travel credit cards available. The top 5 overall were Chase Sapphire Preferred, American Express Gold,  Bank of American Travel Rewards credit card, American Express Platinum, and Capital One Venture Rewards credit card. 

Furthermore, it is important to note this list is periodically updated as new changes can be introduced at this time. Consumers will have to do their own research and determine which is best suited for their needs in terms of flexibility, everyday spending, sign-up bonuses, and more. For example, one of the World of Hyatt credit card benefits included 30,000 bonus points after one spent $3000 in their first 3 months of opening. However, consumers may not want to be tied down to just hotels (e.g., hotels now compete with Airbnb), and so this catered to a very specific audience. 

Credit cards and Non-conformers

Of course, not everyone agreed that there is a need for a travel rewards credit card. Many are fine paying cash (or with an internationally accepted debit card). 

DeNicola (2020) of CreditKarma reported that it was fairly common for U.S. travelers to use traveler’s checks since the mid-nineties. However, the shift to the digital age made it more efficient and secure to manage our currency through online banking. From a consumer perspective, it is simpler to make a purchase today with one swipe of their card or ApplePay (via their iPhones). Then, online receipts are instantly given in the form of online statements; and consumers benefit from superior customer service to dispute any possible fraud or theft charges against stolen information. 

Conversely, cash and debit holders may find it usually much harder to dispute since there is a different process. Fontinelle (2021) of Investopedia went deeper into this topic by stating that it can take time to investigate and reverse any fraudulent charges. Therefore, if one needed the money for something immediately, they would not have access to those funds as quickly as credit card holders.

The Takeaway

            In summary, travel credit cards offer an extensive amount of resources and benefits from credit card companies to stay in business with consumers. In this digital age, credit cards have become more convenient to take with us on the go. People can also collect points that could later be redeemed for points & benefits. Moreover, numerous resources are available online to aid prospective travelers in discovering and narrowing the best credit cards for their specific needs. 

            Are you feeling safe to travel now? Or soon after the pandemic? Will that depend on how one’s lifestyle was prior to the pandemic? For example, did they travel often before the pandemic? And for what purposes?

            Do you also use travel credit cards? How did you pick the best credit cards for travel? Do you think the credit companies are taking effective measures to attract new customers and at the same time, retain their loyal customers during the pandemic? 

About the Author

David Mai is a junior at California State Polytechnic University Pomona. He has over five years of hospitality industry experience - specifically in the restaurant scene. In his free time, he enjoys reading a plethora of books (e.g., self-development, personal finance, and psychology). His plans after graduation include becoming a travel blogger and utilizing his learning and skill sets from the Collins College of Hospitality Management to provide extensive reviews of popular tourist hotels and eateries around the globe. His goals are to inspire the next generation on how to live on their own schedule and achieve financial independence.

References

14 best travel credit cards of April 2021. (2021, April 22). Nerdwallet. Retrieved April 25, 2021 from https://www.nerdwallet.com/best/credit-cards/travel1

17 best rewards credit cards of April 2021. (2021, April 22). Nerdwallet. Retrieved April 25, 2021 from https://www.nerdwallet.com/best/credit-cards/rewards

DeNicola, L. (2020, November 3). What to know about using debit cards for international travel. Credit Karma. https://www.creditkarma.com/credit-cards/i/no-fee-debit-cards-for-international-travel 

Fontinelle, A. (2021, April 16). 10 reasons to use your credit card. Investopedia. https://www.investopedia.com/articles/pf/10/credit-card-debit-card.asp

Shaver, K. (2020, April 25). ‘Quarantine fatigue’: researchers find more Americans venturing out against coronavirus stay-at-home orders. The Washington Post. https://www.washingtonpost.com/local/trafficandcommuting/quarantine-fatigue-researchers-find-more-americans-venturing-out-against-coronavirus-stay-at-home-orders/2020/04/25/fa1f01b2-84a3-11ea-a3eb-e9fc93160703_story.html 

White, A. (2021, March 23). Chase sapphire preferred and reserve cards launch massive 80k and 60k-point welcome bonuses. CNBC. https://www.cnbc.com/select/chase-sapphire-preferred-reserve-80k-60k-point-bonuses/

Photo: onetravel.com/going-places/all-about-credit-card-travel-insurance/