Top Cards for Summer Vacation: August 2019

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CREDIT CARDS
FOR TRAVEL
Summer 2019 from our partners

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 from our partners 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
Max. Rewards Rate on Travel
0% intro APR on Purchases
Annual Fee
No Foreign Transaction Fee
APPLY
UNLIMITED BONUS: Discover will match ALL the Miles you’ve earned at the end of your first year, automatically. For example, if you earn 35,000 Miles, you get 70,000 Miles. That’s $700 towards travel! The more you earn, the more you get.
1.5x Miles per dollar on all purchases
0% (14 months), 14.24% - 25.24% Variable after that
Yes
APPLY
50000 Miles once you spend $3,000 on purchases within 3 months from account opening
2 Miles per dollar on every purchase, every day
-
$0 intro for first year; $95 after that
Yes
APPLY
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
0% intro on purchases for 12 months, 14.24% - 24.24% (Variable) after that
$0
Yes
APPLY
Earn 50,000 American Airlines AAdvantage® bonus miles after $2,500 in purchases within the first 3 months of account opening*
Earn 2 AAdvantage® miles for every $1 spent on eligible American Airlines purchases*
-
$99, waived for first 12 months*
Yes
APPLY
Earn 15,000 bonus points after you spend $1,000 in purchases with your card within 3 months of account opening; redeemable for $150 in gift cards at thankyou.com
2X ThankYou® Points at Supermarkets and Gas Stations for the first $6,000 per year
0% 15 months on Purchases, 15.49% - 25.49% (Variable) after that
$0
No

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 it is 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 entertainment
$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 with the Discover it® Miles credit card (spoiler - they don't).

Let's Calculate the Rewards Value for Discover it® Miles Credit Card**

Rewards

Rewards Rate: 1.5x Miles per dollar on all purchases

Reward Bonus Offer: UNLIMITED BONUS: Discover will match ALL the Miles you’ve earned at the end of your first year, automatically. For example, if you earn 35,000 Miles, you get 70,000 Miles. That’s $700 towards travel! The more you earn, the more you get.

Fees

Annual Fee: $0

Foreign Transactions Fee: None

Calculate Rewards Value for the 1st year
{$20,425 x 1.5 Miles} x 2 = 61,275 Miles
61,275 Miles
= $612.75 Rewards
Value
Exclude Fees for the 1st year**
$612.75 - $0 - $0
=$612.75

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 Discover it® Miles credit card may be the card to use from now on and forever:
  • The rewards rate on all purchases is 1.5x miles. If used for all purchases during the year, the Discover it® Miles card can bring you back $612.75** or even more in the first year.
  • All the rewards that you earn are matched at the end of the first year (provided you are new cardmember). This makes you the master of your sign-up bonus. While the welcome bonus is fixed on most cards, here you can increase it infinitely. The more you spend with Discover it® Miles, the more you earn.
  • Having said that, there is no limit to how many miles you can earn. A lot of cards give you increased rewards only until you reach a certain limit. With Discover, there are no boundaries.
  • The rewards never expire. On most airline cards miles expire after some period of account inactivity. With the Discover it® Miles you'll never have to worry about losing your miles.
  • Miles are extremely easy to redeem. Most travel cards allow you to redeem miles only for what they consider travel purchases or devalue your miles when you redeem them for non-travel purchases. With Discover, earned miles can be redeemed as travel statement credits towards travel purchases or as cash deposited to your bank account.
  • You are not tied to one particular airline. Airlines reluctantly allow you to transfer miles to their partners, but other than that you can't use accrued miles for flights with other airlines. That's extremely disappointing, unless you don't fly one airline exclusively.
  • There are no annual fee and no foreign transactions fee. The Discover it® Miles is very cheap in maintenance, in fact, it's basically free. You get all your rewards and pay nothing for that pleasure.
All in all, the Discover it® Miles credit card is the perfect balance between fees and rewards.
  • UNLIMITED BONUS: Discover will match ALL the Miles you’ve earned at the end of your first year, automatically. For example, if you earn 35,000 Miles, you get 70,000 Miles. That’s $700 towards travel! The more you earn, the more you get.
  • Earn unlimited 1.5x Miles for every dollar spent on all purchases all with no annual fee.
  • No Blackout Dates. Simply pay for travel purchases like airlines, hotels, rental cars, and more with your Discover it® Miles card.
  • Miles Pay You Back. Easily redeem Miles as a statement credit for travel purchases. Or get cash.
  • Freeze your account in seconds with an on/off switch either on the mobile app or website to prevent new purchases, cash advances, and balance transfers.
  • Get your free Credit Scorecard with your FICO® Credit Score, number of recent inquiries and more.
  • Get an alert if we find your Social Security number on any of thousands of Dark Web sites.* Activate for free.
  • Click "APPLY NOW" to see rates, rewards, FICO® Credit Score terms, Discover Match® details & other information.

**All figures are hypothetical and may vary individually. No additional cost is based on the no annual fee offer. In this calculation we assume that a cardholder pays off balances monthly, so no interest is accrued.

User Questions About Travel Credit Cards

Which is the best credit card for travel rewards: Chase Sapphire Preferred ($95/year), the Discover it Miles ($0/year)? Cost...
The Chase Sapphire Preferred card is good for travelers and those who also spend a lot on dining as it gives 2 points for travel and dining purchases. All other purchases earn only 1 point per dollar. The sign-up bonus is quite standard for travel...
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I need a credit card to use on my next overseas business trip. What is the best travel card to get?
When you're looking for a travel credit card, there are a few key things you'll want. The first one is a card with no foreign transaction fee. This is a fee charged by the credit card issuer when they have to convert your money from one currency to...
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My family and I fly to Hawaii every 2-3 years for vacation. I want to get a travel credit card so I can start earning...
A travel rewards credit card that is not connected with any airline will be a good option for you. For example, it can be the Discover it® Miles. The card has no annual fee, no foreign transaction fee and it has a 0% intro APR on...
Read more
How to earn airline miles with a credit card?
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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