Best Credit Cards For Travel Rewards 2021
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Who’s ready to start traveling again? No? Just me? Well while you’re waiting to get back out there you could be earning reward points that will save you so much money on travel. Today I’m going to show you the best credit cards for travel in 2021.
I love travel hacking. I mean, I’m obsessed with racking up credit card rewards and taking trips. At least I was before 2020. But I still love it. I have points burning a hole in my account that I’m itching to use in 2021!
Travel rewards allowed my husband and I to take a 5-day vacation to an all inclusive resort in Mexico, flight and everything, for a grand total of $75. Most of that was the ride to and from the airport!
Best Credit Cards For Travel Rewards
Before we start, a few rules and recommendations. You should know your credit needs to be 700 or above to travel hack. If it’s not watch my video through to the end I’m going to tell you how to raise it.
You can’t put your mortgage or utilities on a credit card but you can put your phone, internet, Netflix, groceries, etc all on the card.
You must pay the card off. Every. Single. Month. If you pay interest it negates the benefits and you’ll end up paying a regular price for a vacation but you’ll pay it to the bank instead of the business and the bank doesn’t need any more of your money.
Your First Four Cards
In your first year of travel hacking, you’ll probably start with four or five of the best credit cards for travel, at least that’s what we did. You can get them all yourself but we switched off (I’d get one then my husband would get one and so on.) This put more time between applications and kept our credit higher.
Here are the first four (well, probably five) cards to get. The order isn’t as important as the timing on the cards. You’ll see why at the end.
Chase Sapphire Preferred
Earn 50k to 60k bonus points after you spend $4,000 on purchases in the first 3 months from account opening. Chase points are great because you can transfer them to dozens of hotel and airline partners so you don’t have to be loyal to just one. And when you book through the Chase Ultimate Rewards portal your points are worth 25% more. So 60k points are worth $750 toward travel.
The card has a $95 annual fee so you have to subtract that from the reward but It’s still so worth it. You’ll also want to pay attention to the Chase 5/24 rule once you get a few cards in your wallet. It’s the reason why most hackers recommend starting with Chase cards.
CapitalOne Venture
CapitalOne Venture offers cash back instead of points making it a great card if you plan to take a trip where an Airbnb or cruise are involved (RIP cruises, I miss you.)
50k to 60k bonus points once you spend $3,000 on purchases within 3 months from account opening. That’s just $1,000 per month Each point is 1 cent so that’s $500 to $600 in travel expenses you can wipe out.
So say you want to take a cruise for $900. Open your card, put $700 per month on the credit card and pay for your cruise sometime within that 3 month window. That’s $3000 so you’ll be able to erase at least $500 from that cruise meaning it only really cost you $400.
The card has a $95 annual fee but so you’re really only getting $400 off but I’ll take that. And you get Global Entry for free which is $100, that’s a great perk.
Chase Ink Business Preferred
This one’s for you to time if you have a big purchase coming up. New cardholders can earn 100K Chase Ultimate Rewards points by spending $15,000 within three months of opening an account.
I know what you’re thinking, but Jen I don’t have a business. Do you earn any money outside of a w2 job. Do you babysit, sell crafts, drive uber, anything? It doesn’t even have to be profitable; you can still call it a business. Fun fact, Uber is on the NYSE and it still isn’t profitable.
A Hotel or Airline Card
Your fourth and fifth card should be a hotel or airline card. You have many options for the best credit cards for travel hotels and airlines but for me, two stand out from the rest.
Southwest
Southwest has the coveted Southwest Companion Pass that allows you to bring a companion on any flight for free (plus $11 each way for taxes and fees.) You can get it by taking 100 flights but you’ll pay at least $15k in flights alone. OR you can get it through Southwest credit cards.
Now, this may be a 2 card operation. If you want to do it on one card you’ll need the Southwest Rapid Rewards Premier Business Credit Card and you’ll need to spend $25,000 in the first six months of account opening, $5,000 in the first three months. The bonus on that is currently 100K points then spending $25k will get you another 25k points
If you don’t want to spend that much in six months you can get a personal and a business card from Southwest. Start with the personal card (there are rules restricting you from getting a personal card if you have a business card but not the other way around,) Southwest Rapid Rewards Plus and spend $12k within nine months of account opening, only $2,000 has to be in the first three months. Then get a Premier Business Credit Card and spend $3,000 on purchases in the first 3 months for a 60k point bonus. Thus you’re spending $15k to get the pass instead of $25k.
Timing is super important to getting the Southwest companion pass because it’s valid in the year you qualify and the entire following calendar year so you could have almost two full years with it! BUT! You must earn all 125,000 points within ONE CALENDAR YEAR (that’s January 1 to December 31) And if you’re using credit card rewards, you must earn them before the end of your December billing cycle.
So Nov through March are the only months to sign up for a Southwest card and if you sign up in Nov or Dec you have to make sure you don’t spend more than $2k on the card because you don’t want to get that first bonus until after Jan 1.
Hyatt or Hilton
If you’re not in the window for the Companion Pass, go for the Hyatt or Hilton. Hyatt gives you the best redemption value of any hotel card. It can’t be beat. And I love their all-inclusive resorts.
The only reason I’d wait on the Hyatt is if your credit score is below 750. Then I’d go with the Hilton Honors American Express Card for the simple reason that it’s the best hotel card with no annual fee. The length of your credit history matters so having a no annual fee card will help you build that.
Plus it has a redemption as big as some cards with a hefty annual fee. Earn 100,000 Hilton Honors Bonus Points after just $1,000 in eligible purchases in the first 3 months. And you’ll get a $100 statement credit after your first purchase made within those first 3 months.
Travel Rewards Tips
What if your credit isn’t strong enough to start travel hacking now? Start with no annual fee cards that will prolong your credit history.
If your credit score isn’t high enough to get a regular credit card start with a secured credit card. Credible has a portal where you can compare cards to find one that’s right for you.
I hope that was helpful and you’re able to get these best credit cards for travel and take many more vacations in the future.
Jen Smith is a personal finance expert, founder of Modern Frugality and co-host of the Frugal Friends Podcast. Her work has been featured in the Wall Street Journal, Lifehacker, Money Magazine, U.S. News and World Report, Business Insider, and more. She’s passionate about helping people gain control of their spending.