Travelling may not be a priority right now due to the COVID-19 pandemic, but there’s no doubt that many people will take to the skies in the future. When you’re ready to start trip planning again, you should prepare yourself with the right travel credit card.
Having a travel credit card will not only earn you points, which will give you discounts on flights and hotel stays, but it’ll also give you some perks that will make you feel like a VIP. Since every travel credit card comes with different benefits, you need to know what to look out for before you apply. Here are the benefits that a good travel credit card should have.
Points that are actually useful
What’s arguably the most crucial benefit of a travel credit card is the points you earn. Think of your points as currency. The more you have, the more valuable they are. You’ll want to choose a points program that will benefit you the most. For example, if you’re loyal to an airline or hotel chain, getting a co-branded credit card is definitely worth your while. Many of the bank travel programs can be valuable too. With American Express Membership Rewards, you can use your points on any travel you book. You can also use their fixed points program, or you can transfer them to airline and hotel partners, so you have many options. Choose wisely, but note that you don’t need to stick to just one program.
The cost of medical insurance outside of Canada can be expensive, which is why you should never travel without having medical insurance. Fortunately, most travel credit cards come with a good travel insurance policy, but it’s the details that matter. First off, travel medical insurance is a must, but you need to find out how many days of travel you’re covered for. If your card only gives you 15 days of insurance and you’re away for longer than that, you’ll need to top up your policy. You’ll also want to ensure that your travel credit card includes trip cancellation, trip delay, lost/delayed luggage, hotel/motel burglary, and car rental insurance.
If you’re going to sign up for a new travel credit card, you want to do it when there’s a generous welcome bonus. Many cards offer a sign up bonus of 25,000+ points, which can be a good value depending on how you use them. The Amex Business Platinum Card typically has an insane welcome bonus worth up to 75,000 points. Those points have a minimum value of $750, but they could be worth more if you transfer them to one of the airline or hotel partners. While welcome bonuses are appealing, note that you’ll usually need to meet a minimum spend requirement within the first three months of card membership to get it.
Once you’ve been into an airport lounge, it’s tough to go back to the common areas. It’s not like lounges are super luxurious, but it’s nice having access to food, drinks, and better seating. Here’s the thing, many credit cards come with free lounge access. Priority Pass is the largest lounge network in the world, so if you’re getting a new credit card, see how many passes a year you get. For reference, a Priority Pass Membership typically costs US $99 a year and $32 a visit. If a credit card gives you 4 free passes, that’s nearly CAD $300 in value you’re getting every year. Some premium travel credit cards will provide you with unlimited free access to lounges, so they’re ideal for frequent flyers.
A few travel credit cards out there will give you increased status with various hotel loyalty programs. This may not seem like a big deal, but it can mean a lot if you happen to stay at hotels a lot. For example, the American Express Platinum Card gives you Gold Elite Status with Marriott Bonvoy. With that status, you get 25% more points on your stays, room upgrades when available, late checkout, a welcome gift, enhanced WiFi, and more. Normally, getting Gold Elite Status would require you to stay 25 nights, but you get it instantly with the right credit card.
Extra travel perks
Finally, there are the extra travel perks that can save you money if you take advantage of them. Some benefits are obvious such as free checked bags that come with many Aeroplan credit cards. Not only does the cardholder get their first bag checked free, but so do their travelling companions on the same itinerary (maximum of 8 people). Considering that a checked bag typically costs $30-50 one-way, that’s a lot of money saved.
Many Aeroplan and WestJet credit cards also give you a companion voucher. This voucher allows the second passenger to travel at a significantly discounted price when the primary cardholder is paying a full fare. Depending on where you’re flying to, you could easily save hundreds of dollars.
With the Marriott Bonvoy credit cards, you get a free annual night worth up to 35,000 points. This is an excellent perk since a hotel in that price range will easily cost more than the annual fee you’re paying for your credit card. In other words, you’ll always be getting more value than what you’re paying in annual fees.
No foreign transaction fees
Although no foreign transaction fees is not a common benefit, it’s great to have it since you can save quite a bit of money. In case you didn’t know, most credit cards charge a fee of 2.5% whenever you make a purchase in any currency besides Canadian dollars. Many people don’t realize this happens since the cost is added right into the currency exchange rate. 2.5% may not sound like a lot, but it certainly adds up. Why pay that extra fee whenever you’re abroad when you don’t have to?
It’s unlikely you’ll get all of the benefits listed above with a single card, so you’ll need to decide on the most important features to you and apply accordingly. Alternatively, you could get more than one card and use the one that gives you the most value in each situation.