Top Cards for Summer Vacation: June 2018

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CREDIT CARDS FOR TRAVEL Summer 2018

The sun shines more and more each day, flowers are in bloom and you already feel how hot it is getting - summer is here. Summer holidays are almost here, and you are in need of dire preparation. You can lift in spirits and let CreditLand experts do all the work! With the cards we've selected, you can start getting ready for your summer holidays right now - by the due date you'll have enough miles and points to give yourself a nice little trip.

We picked up the creme de la creme of travel rewards credit cards and made them compete against each other in the vicious fight of rewards and bonuses. Take a look at our candidates and see who won in the summer rewards race.

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Summer Travel Cards Winners

In order to make sure that you get the least biased comparison possible, we came up with criteria that will help you choose a card most suitable for everyday use and miles accrual. First of all, a real travel card should charge you low or no APR. You should be able to take off on holiday and pay any time later. Secondly, think about additional fees. Sometimes you may look at enticing bonuses and forget about an annual fee that can take from you right what you've gained.

However, bonuses are crucial if you want to use miles or points to pay for your holiday - they often make up a good portion of your flight ticket or cover all of it. You also need to consider the rewards rate on non-travel purchases, because this is what basically gives you miles when you are not traveling. Below you can see the comparison of cards by these principal parameters.

Bonus Offer
Rewards Rate on All Purchases
Rewards Expiration
Annual Fee
No Foreign Fee
Capital One® Venture® Rewards Credit Card
50000 Miles once you spend $3,000 on purchases within 3 months from account opening
2 Miles per dollar on every purchase, every day
Miles won't expire for the life of the account and there's no limit to how many you can earn
$0 intro for first year; $95 after that
Yes
Discover it® Miles
We'll match all the Miles you've earned at the end of your first year. For example, if you earn 30,000 Miles, you get 60,000 Miles.
1.5x Miles per dollar on all purchases
Rewards never expire
$0
Yes
Capital One® VentureOne® Rewards Credit Card
20000 Miles once you spend $1,000 on purchases within 3 months from account opening
1.25 Miles per dollar on every purchase, every day
Miles won't expire for the life of the account and there's no limit to how many you can earn
$0
Yes
Earn 60,000 American Airlines AAdvantage® bonus miles after making $3,000 in purchases within the first 3 months of account opening*
-
18 months from your last activity date*
$99, waived for first 12 months*
Yes
Earn 50,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening
Earn 1X Points on All Other Purchases
No expiration and no limit to the amount of points you can earn with this card
$95, waived for first 12 months*
Yes

Why to Choose a General Travel Rewards Card Over a Co-Branded Card

Above you can see our top five general travel cards. One might wonder where the typical airlines cards like the Southwest Credit Card or Delta Credit Card are. Point is, a co-branded card can give you some airline specific perks (which may still be of no use to you if you are not a frequent traveler), but other than that it's not very suitable for everyday use. Let's figure out why and see how co-branded cards compare to general cards. So, the travel cards' advantages are the following:
  • Easy Redemption You can redeem rewards for any travel purchases, including airline tickets, hotel stays, car rentals and more.
  • Flexible Options You can book your reward flight any time with any airline.
  • No Limitations No limits to award seats availability, no blackout dates, and you don't have to have a flexible traveling schedule.
  • Lower Fees Low or no annual fee (annual fee can eat up to half of your earned rewards).
  • Earning Rewards You get more rewards on all purchases, while with co-branded cards you only get 1X on all purchases and higher rewards in limited categories.

Getting More Rewards vs Saving on Interest & Fees

When it comes to your actual earnings, every detail is important. In most credit cards' offers fees and rewards counterbalance each other, and for each prospective card you need to consider what dominates. Some premium credit cards have hefty annual fees and are worth it for only those who spend the equal or more for plane tickets.

On the other hand, sometimes a card boasts low fees, but has no rewards either. Thus, it's a matter of calculation. In order to determine the card's worth to you we need to count its rewards value. We don't take into account any interest payments, because we take as a basis that you don't carry a balance and you are never late with your payments - this is the only way you can get any profit from a rewards credit card.

What is rewards value and why is it important?

The rewards value is how much you are going to get back with the card, how much money you are going to pocket. To calculate it, we need to put together all your expenses per year. Since individual spending can vary, we will take average annual spending per person. We don't take expenses that don't earn rewards like mortgage, cash advances or balance transfers.

Generally during a year, you have a lot different expenses, which you can't put all in one category, so cards with a good rewards rate on all purchases and a good sign-up bonus will earn you more simply because all in all you spend much more in different categories altogether than in one selected category, even with increased bonuses. That's why in the game of rewards all expenses are important. Let's see how much an average person spends per year:

Utilities, furniture and other housing expenditures
$3,637
Food (at home), dining and entertaiment
$6,176
Travel
$5,260
Other expenses (including clothing and health insurance)
$5,352
Total:** $20,425
How do we calculate the rewards value for the first year?

The calculation is pretty simple: we take annual expenses of an average American (the ones that earn rewards) and multiply them by the rewards rate. If the card has a bonus offer, we add it to the earned rewards. We assume that bonus offer is earned by default, as well as all expenses are put on a credit card. All calculations are hypothetical and vary depending on the credit card spendings.

With these operations you get a number in miles or points, but we need to know how much real profit you are going to get, so we divide this number by the redemption rate. Redemption rate varies, but generally it is 1 mile/point - one penny, so we take it as a rule. Therefore, dividing the sum in miles by 100 you get your rewards value in dollars.

Card's Rewards Value for 1st Year =
Your Annual Spending
x
Rewards Rate
+
Sign-up bonus
Redemption Rates
How does it work in real life?

Whenever possible, bank will charge you high fees on everything they can. Naturally, these fees lower the rewards value of your card since they eat off the big portion of your much-needed rewards. An annual fee of a travel card can go up to $500 or more.

A foreign transaction fee can also be nasty. If you go abroad and pay with your card, you need to keep track of additional charges. Banks tend to charge a fee of around 3%, and that's a severe leakage of your funds. Try to avoid cards that have any fees at all. Just the rewards.

So, in order to see how the card really benefits you, you need to count the rewards value and then deduct all the fees. The sum you get is the net profit of that card. That is what you want to focus on when choosing a card. In the calculation below, you can see how fees affect your rewards value through the example of the Capital One® Venture® Rewards Credit Card.

Let's Calculate the Rewards Value for Capital One® Venture® Rewards Credit Card **

Rewards

Rewards Rate: 2 Miles per dollar on every purchase, every day

Reward Bonus Offer: 50000 Miles once you spend $3,000 on purchases within 3 months from account opening

Fees

Annual Fee: $0 intro for first year; $95 after that

Foreign Transactions Fee: None

Calculate Rewards Value for the 1st year
{$20,425 x 2 Miles} + 50,000 = 90,850 Miles
90,850 Miles
= $908.5 Rewards
Value
Exclude Fees for the 1st year**
$908.5 - $0 - $0
=$908.5

Compare Travel Rewards Credit Cards by Rewards Value and Fees

Finally, let's get to the sweet part and compare the cards that you can use to finance your trips. Here we've assembled all the criteria that can anyway affect the profitability of the card. Pay attention to important parameters, such as bonuses and fees. The rewards value of each card is presented in the first row.

Choose a Compromise Between Big Rewards and High Fees

When you are looking for that one card, you may want some ready-made advice to see and follow. We've spent time comparing all the general travel cards and came up with the best one that combines high rewards and low losses. See why the Capital One Venture card may be the card to use from now on and forever:
  • The rewards rate on all purchases is 2 miles. If used for all purchases during the year, the Capital One Venture card can bring you back $908.5** and more.
  • The Capital One Venture card gives you a nice sign-up bonus of 50,000 miles that you can spend on your travel purchases.
  • Having said that, there is no limit to how many miles you can earn and the rewards don't expire for the life of the account.
  • Miles are easy to redeem. You can redeem your miles as a statement credit on past travel purchases or pay for your new travel purchases.
  • You are not tied to one particular airline.
  • Annual fee is waived the first year and there is no foreign transactions fee.
All in all, the Capital One Venture card is the perfect balance between fees and rewards.
  • Enjoy a one-time bonus of 50,000 miles once you spend $3,000 on purchases within 3 months from account opening, equal to $500 in travel
  • Earn 2X miles on every purchase, every day. Plus earn 10X miles on thousands of hotels; learn more at hotels.com/venture
  • Receive up to $100 application fee credit for Global Entry or TSA Pre✓®
  • Fly any airline, stay at any hotel, anytime
  • Travel when you want with no blackout dates
  • Miles won't expire for the life of the account and there's no limit to how many you can earn
  • No foreign transaction fees
  • $0 intro annual fee for the first year; $95 after that

** All figures are hypothetical and may vary individually. No additional cost is based on the no annual fee offer for the first year. The annual fee will be $95 after that. In this calculation we assume that a cardholder pays any balance off monthly, so no interest accrues. Otherwise, interest charges eat away any value provided.
Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank about the terms & conditions.

User Questions About Travel Credit Cards

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You can earn frequent flyer miles without boarding a plane every month and even without leaving house at all. The bottom line to mile earning is to spend, but in a smart way. There are two options to consider when choosing a credit card for...
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