“The Ultimate Guide to Frequent Flyer Miles” by Travis Sherry .pdf
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Which Travel Credit Cards Have the Best Rewards?
Posted: 07/30/2013 5:09 pm
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Credit Cards, Credit Card Rewards Programs, Rewards, Travel, Travel News
Gearing up for your summer travel plans and looking forward to racking up the rewards on your credit card? Depending on which credit card you use, you could get some serious value for your travel. From double points for every dollar you spend on the card to $400 cash intro bonuses to two free flights, travel cards are going all out these days to attract new customers. So which travel credit card has the best rewards? We did a little research to help you out.
How Did We Test the Cards?
We researched the real-world dollar value of each card's travel reward program by seeing how much it cost to book actual hotels and flights at different times of year. Then those dollar values were compared to the number of points it took to book those same hotels and flights.
The same dates and locations were used for all the cards, and bookings were made during both the "high" summer season and "low" fall season. When possible, the identical hotels and flights were booked to further even the playing field. The final reward value was based on the actual dollar value a user would receive in rewards after a $100 credit card spend. Separate reward values were given for both hotel stays and flights.
To calculate the actual reward card value, we employed a basic formula. First we took the dollar value of the reward and divided it by the number of points required to purchase that reward.
Point Value = Reward Price / Number of Points Required to Purchase
Then we assumed a spend of $100, with 5% ($5) spent on high point rewards like hotel stays and flights. The remaining 95% ($95) was allocated to standard point earning spends.
Value per $100 Spent = (High Point Earn * $5 * Point Value) + (Standard Point Earn * $95 * Point Value)
If you want to know more, you can check out the full travel rewards card analysis.
Which Credit Cards Are the Best?
What does all that math mean? It basically means that we figured out which cards offer the best rewards when it comes to real-world dollar value. Here are the cards that were the best:
#1. Barclay Arrival World Mastercard: This card earns top status mainly for its $2 in flight or hotel value you earn for every $100 spent. But the reward that catches many people's attention is the intro bonus. Cardholders earn 40,000 bonus miles after spending $1,000 in the first 3 months of card membership, equal to an eye-popping $400 that you can spend on travel or even as a statement credit for any purchase you might make. When it comes to ongoing earnings, you earn 2 points per dollar spent on every purchase with no limits. To use rewards, cardholders can redeem points for a straightforward statement credit. As an added bonus, if the credit is used to pay for a travel purchase, users earn an additional 10% in points. This means if you spend 10,000 in points on travel you'll get a 1,000 point bonus deposited to your rewards bank -- a huge benefit we have not seen with any other rewards card.
#2. Capital One Venture Rewards Card: Yes, this is the card from those Alec Baldwin commercials. Coming in a very close second, the Capital One Venture Rewards Card also offers a fabulous $2 flight and hotel redemption value per $100 spent. And just like the Barclay Arrival World Mastercard, cardholders can book their travel however they'd like and with any airline or hotel they prefer. However, we ranked this card second because it didn't feature the 10% point bonus for booking travel that the Barclay Arrival World Mastercard did. Additionally, the Capital One Venture Rewards only offers a 10,000 point bonus (equal to $100), compared to the World Mastercard's 40,000 points. You also get a very generous 2 points per dollar spent on every purchase.
#3. Starwood Preferred Guest Credit Card from American Express: With an amazing $2.61 hotel point value, Starwood Preferred Guest Credit Card from American Express featured the highest hotel redemption value of any card in our study. While their value for flight redemption was much lower at $1.35 per $100 spent, it is still higher than some airline rewards cards. Users earn a hefty 4-5 points per $1 spent at Starwood hotels and 1 point per $1 spent on all other purchases. Additional perks include a 10,000 point bonus with first purchase and another 15,000 point bonus after spending $5,000 in the first 6 months.
#4. BankAmericard Travel Rewards: BankAmericard Travel Rewards credit card features a $1.50 travel value on both flights and hotels for every $100 spent. Cardholders who have another qualifying account with BofA will especially appreciate this card, as they will earn an extra 10% annual points bonus on their total yearly purchases. In addition, all cardholders will earn 10,000 bonus points after spending $500 in purchases in the first 90 days. Redeeming points is easy -- users need only to use their card to pay for their travel and their points are used as a statement credit towards their travel purchases. They can book their travel anyhow and anywhere they like; whether online, over the phone, or with a travel agent. And while the reward value is not quite as high as with the top 3 finishers in our rankings, unlike those cards the BofA Travel Rewards card has no annual fee.
Follow Jeff Hindenach on Twitter: www.twitter.com/jeff_hindenach
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