Planes, Trains or Automobiles: Which Credit Cards Are Best for Each

Train Travel
Train Travel

If you're one of the millions of people planning a business trip or family vacation in the next few months, odds are you'll be making those plans with plastic. But before you slap down your card, make sure you're getting the most out of it.

With bonus reward points for everything from train travel to Disney vacations, charging your trip can save you money -- but only if you're smart about it.

The Basics

With any credit card, it's imperative to know your spending and bill-paying habits. Do you pay off your balance every month, or just make a minimum payment? Pay mostly via a debit card, or charge things directly?

If you tend to carry a balance month to month on your credit card, your primary concern will be getting a good interest rate, not racking up points for travel. Only once you've zeroed out your balance should you start to look at other features.

Once you start shopping around for travel rewards, keep an eye out for fees. Fees can sneak into any credit card agreement, but some travel cards have an annual fee to make up for its other perks. If the card is flexible and allows you to convert points into cash, you may be able to simply pay off the annual fee with points each year. And, as many cards offer the first year for free, you can try out the plan (or use it for your trip) and then switch back to a card without a fee when the time comes.

Now it's time to figure out what kind of travel rewards you can get. So, what kind of travel do you do?

• Road and rail warriors: Do you spend your daily commute stuck in traffic? Or take the train into your job? Both AAA and Amtrak offer credit cards with a variety of benefits tailored for its customers, including earning and redeeming points on car and train travel, respectively.

• World travelers: If your travels tend to take you across borders, you'll want to scratch out all cards that charge an international transaction fee. JP Morgan Chase (JPM) lets prospective customers sort through all the company's available credit cards by a variety of factors, including which ones are foreign-transaction-fee free. Bank of America (BAC) also allows visitors to its site to browse through all its cards, although the offerings of both cards and options pale in comparison.

• Creatures of habit: Hotel and airline cards are useful if you consistently stay with the same hotel chain or fly a particular airline. For example, the Starwood (HOT) American Express (AXP) card offers a great rewards program, but its high interest rate and international transaction fee ensure that it's not a great fit for everyone. If your preferred chain doesn't offer you a preferred deal, you might be better off simply signing up for those companies' loyalty programs.

%Gallery-158097% Not Sure? Start With What's in Your Wallet
If, after doing your research, you still don't see a card that's right for you, call your bank, current credit card company, or a competing one, and outline the features you want. You may find that they have offers and options of which you're unaware, especially if you're an existing customer. Conversely, you can obtain general information from another credit card company, and then call your own to see if they can match it.

It's not always necessary to open a new credit card to change your rewards program or eliminate your international transaction fee. Often, your credit card company can maintain your same credit history and annual percentage rate while switching you to a new card, without the hit against your credit report.

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Motley Fool contributor Molly McCluskey owns shares of Starwood. She tweets about travel, finance, and the finance of travel at @MollyEMcCluskey. The Motley Fool owns shares of Bank of America, Disney, and JPMorgan Chase. Motley Fool newsletter services have recommended buying shares of Disney and writing a covered strangle position on American Express.