5 Ways to Cut Costs on Travel Cards
Travel reward credit cards are an ideal way for you to cut down the cost of airline tickets, hotel stays and even car rentals. However, some offers are less than ideal because they incorporate far higher fees than you would pay with a traditional credit card.
Keeping this in mind, remember that it is up to you to find low cost rewards programs that focus on the options you want. In fact, the following are the best ways for you to see lower costs associated with these credit cards.
#1: Know the Interest Rate
Interest rate costs will vary by company. If you are a good company, you should qualify for a decent interest rate. Traditionally, even the best travel cards hsve higher interest rates than non-reward programs. Compare several companies to find out which one offers the lowest fee for borrowing.
#2: The Annual Fee
Many travel rewards cards do carry annual fees. These fees can range from just $40 up to several hundred dollars. The terms and conditions will tell you if there is an annual fee prior to you applying. Some travel rewards cards do not come with any fee. Others offer no annual fee for the first year and then charge an annual fee for the years after.
#3: Have a Good Credit Score
If you have a good credit score, you may qualify for the more lucrative rewards program that some lenders offer. Many of the biggest companies offering travel rewards will qualify you for a stepped offer. For example, a Signature card may offer you the best rewards over the Gold card. If you do not qualify for the Signature card due to a lower credit score, you may get the Gold instead. The Gold card may have more fees, fewer rewards or additional limitations.
#4: Know You Can Actually Use the Rewards
There is no benefit to you in obtaining a travel rewards card you cannot use. Know:
- Which airlines are a part of the program
- Which hotels are a part of the program
- Are there blackout dates or other limitations
Be sure these are benefits you will use. If not, look for a card that offers better travel rewards for your particular needs.
#5: Maximize Rewards Points
From introductory offers to long term earning, be sure you take full advantage of the bonus points the company offers. Many companies offer a stepped rewards program where you will earn more points for some types of purchases than others. Use the card to fund your everyday purchases, too. Even earning just one point per dollar adds up over the course of the month. However, do pay down your debt to avoid costly finance charges.
By taking these steps, you can reduce the amount of money you pay out to get travel rewards. The first step is to read through the terms and conditions and to know what they actually offer. Find out if there are restrictions or limitations on the bonus. The company must provide you with this information before you apply, but they also have the ability to change those terms later on, with proper warning for you.