Who doesn’t like to save money on travel? Whether you’re a budget adventurer or a luxury spender, it’s always nice to feel like you’re getting a good deal on transportation, accommodations and activities—especially if you have children, which multiplies the cost of exploring the world.
Used wisely, credit cards can be a very effective way of reducing travel costs. Not by going into debt, but by accruing points that can be cashed in for free or discounted rooms, flights, and more. Many travel-specific cards also offer benefits such as free checked bags, elite status with hotels or airlines, and even credit on travel purchases.
“These credit cards also often have no foreign transaction fees, which allows you to use them in other countries without racking up fees,” says Maggie Germano, a financial coach based in Washington, D.C.
There are a lot of credit cards to choose from, but we’ve got a few tips for choosing one that’s right for you.
Know what (or who) you use most
Airline and hotel credit cards—known in the industry as “co-branded cards”—can be tempting, with their promises of free flights or resort stays. But often, those cards don’t provide the most value for your spending. Their points may not be worth very much; they may have blackout dates on flights, or lots of properties that don’t accept points at all.
Most travelers will do best with a card that earns points that can be used on different types of travel, like the Chase Sapphire Preferred or American Express Gold card. You earn Chase or Amex points, which can be transferred to a number of different airline or hotel loyalty programs.
Then there are people who don’t want the hassle of comparing prices or shuffling points around. They’ll be best served by a good cash-back card.
There are some exceptions, though. If there’s a hotel chain or airline you use a lot, it can be worth having a card just to use with that company, so you can take advantage of perks like free stays, upgrades, free checked bags, and more. If you spend big with a specific travel brand, having a card will also help you reach higher tiers of their loyalty program more quickly.
Consider the annual fee
Many travel credit cards charge annual fees. Often they’re in the $100 range, but can go up to $695 (for the American Express Platinum) and even higher.
In some cases, the benefits of the card will easily offset the fees, says Forrest McCall, a personal finance expert and owner of the finance blog Don’t Work Another Day. He recommends doing a little legwork to determine if the card is worth the annual fee, starting with figuring out how much you spend on travel annually, as this will help you determine which card is right for you.
A site called Gigapoints will do the work for you, adding up your spending and pinpointing the card that will earn you the most points.
Speaking of sign-up bonuses: increasing your spending just to get extra credit-card points is not generally a wise move. But if you know in advance that you’ll be spending more—furnishing a home, planning a wedding, etc.—you can use that to your advantage. “If you have a large purchase coming up, finding a card with a large welcome bonus can be a tremendous option to earn free cash,” McCall says.
Keep your *actual* habits in mind
Lots of credit cards offer benefits that sound great but may not actually save you money. When you’re calculating the value of a card’s perks, take into account what you already spend on.
“For example, if you don’t usually check bags, or the airline that you’re loyal to offers free checked bags, a perk like free luggage check shouldn’t be counted in the math,” says Bobbi Rebell, a certified financial planner and host of the podcast Money Tips for Financial Grownups. Ditto for earning points on an airline that doesn’t fly out of your local hub, discounts on food delivery when you never order in, or airport lounge access that isn’t available in the places you like to visit.
A credit-card perk is only valuable if you’re going to use it; otherwise, it’s just fine print.
Watch for deals
Many credit cards offer “sign-up bonuses”—extra points, cash or other rewards for opening an account. Those bonuses can change, and sometimes they’re real blockbusters.
Before you sign up for a card, do some research. Maybe the card you’re considering tends to offer bigger bonuses at a certain time of year; it may be worth waiting to see. You might also get a better bonus if you’re referred by a friend who already has the card you want (they generally get extra points or cash, too).
Stay in your spending lane
It goes without saying, but we’ll say it anyway: Be responsible with your credit card choices.
Travel credit cards tend to have higher interest rates than other types of cards, so make sure you have the financial resources to pay off your balance every month.
If you have a weaker credit score, avoid applying for a bunch of fancy cards you won’t qualify for—it could ding your score even more.
And never go beyond your budget just to earn a free hotel night or a slew of frequent-flyer miles.
“Don’t forget that whatever money you spend to earn those rewards, you have to pay back,” Rebell says.