How to Find the Best Travel Rewards Credit Card for You
Most credit card comparison tools are either blog posts or static lists of credit cards. One of the oldest in the market is CreditCards.com, which has a page dedicated to travel and airline credit cards. The top result is the Capital One Venture Rewards Credit Card.
Is Capital One Venture the best card for everyone? As my research reveals, it depends upon your situation. I used the customizable tool at MileCards.com to review three different scenarios, and I received three different recommendations. Now more than ever personalized recommendations are important to earn the best rewards.
Scenario 1: The Frequent Flier
Bob flies United Airlines all the time for business. He is earning 50,000 miles every year from business travel and wants to top up those miles with a credit card. He spends about $3,000 each month on his personal credit card and about $800 of that is in restaurants.
Based upon Bob's information, the recommendation was the Chase Sapphire Preferred Card. The card allows you to earn 2 points for every $1 you earn on dining, and you can transfer the Sapphire points directly to United Airlines. Including the first year bonus, Bob would earn 91,600 points in the first 12 months. Capital One Venture doesn't allow you to transfer points to existing frequent flier programs, and would not have been the best option for Bob.
Scenario 2: The Infrequent Flier With Hawaii Dreams
Sarah never flies. A recent graduate, she wants to visit Hawaii soon, but only if she can get a free flight. And she doesn't want a card with an Annual Fee. She spends about $1,000 a month, and most of it is spent on groceries and gas.
After inputting Sarah's information, the Amex Everyday Credit Card was the top result. There is no annual fee on the credit card. You earn 2 points for every $1 spent in grocery stores, up to $6,000 each year. And Sarah can transfer those points directly to Delta Airlines. In the first 12 months, Sarah will earn 31,600 points. So long as Sarah pays her bill on time and in full every month, those points won't have cost her a dime. That would be enough for a flight anywhere in the continental United States and she would be on her way towards that Hawaii trip.
Scenario 3: The Big Spender
Emily has a big job and likes to spend what she earns. She spends $4,000 a month on her credit card and pays the balance in full every month. Her spending is evenly split between travel, clothing and restaurants. Emily is always looking for ways to get more free travel. And Emily isn't afraid to pay an annual fee if she is able to get value.
After inputting Emily's information, the top recommendation is the Citi Prestige Card. There is a steep $450 annual fee. However, the rewards are significant, especially in the first year. Although Emily has to pay the $450 fee, she will get $250 of air travel credit. So, on the next flight that she books using the Citi Prestige Card, she would immediately get $250 of her $450 fee back.
She would earn 3 points for every $1 spent on travel and 2 points for every $1 spent on travel. Even better, after Emily spends $3,000 she would receive a 50,000 point welcome bonus offer.
So, during the first 12 months, Emily would earn 135,200 points with a true cost of $200 (after the refund of the air travel). MileCards values those points at $1,993. Emily is more than happy to spend $200 to receive $1,993 of value.
The Best Travel Credit Card of 2015: It Depends
The right travel rewards credit card really depends upon your unique situation. It pays to do your homework and find the card that meets your specific needs. The Capital One Venture Rewards Card recommended by CreditCards.com isn't a bad card. But it may not be the best card for your situation. That is why is you should look for tools, like MileCards, that provide personalized results.
Just remember, these cards are only worthwhile if you have a lot of self discipline. If you don't pay your balance in full and on time every month, you will be hit with steep interest charges. The interest you would pay on your credit card debt would likely end up costing much more than the free travel that you receive. But if you have the discipline to make your payments on time every month, free travel awaits.
Nick Clements is the co-founder of MagnifyMoney, a price comparison and financial education website. You can follow him on Twitter @npclements.