Credit Cards

Here’s What You Absolutely MUST Look for if You Want a Great Travel Credit Card

best travel points credit card singapore

Jeff Cuellar

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In Singapore, we NEED to travel every few months (or weeks) just to keep our sanity in today’s high-stress working environment. Seriously, travel is the best way to prevent work-related mental breakdowns and is probably the biggest reason why there aren’t a higher number of IMH self-referrals!

The bottom line is this – we all need a holiday every now and then.

So whether you travel three or four times a year for holiday or you travel that many times a month for business – having the right travel credit card can have a huge impact on your travel plans.

That’s because depending on the travel credit card you apply for, you can earn numerous money saving perks such as FREE flights, stays at hotels, cash back and other rewards.

 

What You Should Look for Before Signing Up for that New Travel Credit Card

Is there really a “perfect” travel credit card out there? The answer is no. Each travel credit card offers varying rewards that are catered to certain types of people. They key is to find a credit card that fits your lifestyle, travel frequency and spending habits.

For example, if you’re a regular business traveller, you’ll want to get a travel credit card that offers a huge sign-up bonus (ex. 35,000 air miles), extra points when making purchases both locally and overseas (ex. Department stores), hotel booking discounts  and useful travel perks such as petrol discounts that you can use abroad.

Here’s what you should look out for when signing up for a new travel credit card:

 

A Great Frequent Flyer Sign-up Bonus

There’s only one simple rule when it comes to the sign-up bonus travel credit cards offer – the more, the better! But how much of a bonus is worth considering when it comes to a good travel credit card?

The answer: anything over 30,000 frequent flyer miles – if you’re a frequent flyer. The reason why 30,000+ points is what you’ll want to look for is a matter of simple maths – the more points you get from the start, the easier it will be to get that FREE flight earlier!

If you only get a sign-up bonus of 10,000 points but the miles rewards chart says you need 25,000 for a one-way trip to Japan, then it’ll probably take you a while before you can accumulate the 15,000 points needed for the flight (and a LOT of spending to get there!).

But if you get a huge bonus of 30,000 and you only need about 22,500 for one-way flight to Japan, then you’ve already earned a free flight. However, some cards will require a “spending minimum” before giving you the sign up bonus – so always check the fine print!

If you’re not a frequent flyer, the miles may not be as important to you as a travel credit card’s other perks such as petrol discounts, free travel insurance and lower interest rate.

 

Low Spending Minimum with Good Miles per Dollar (or Bonuses)

Many travel credit cards offer some decent “bonuses” on air miles accumulation whenever you spend a certain amount each month. What’s a good spending limit to adhere too that won’t get you into credit card debt because you’re chasing rewards?

The answer: $1,000 is a good spending minimum to adhere to. Just make sure you’re paying off your card in full each month! You can spend more than that provided you have the budget to do so.

To maximise your allotted spending minimum to earn the most points, you’ll need to compare the points systems offered by each travel credit card. Also, keep in mind that some travel credit cards will offer “bonus” points for purchases made at certain retailers as well.

Let’s look at an example:

  • Travel Credit Card A: if a travel credit card is offering you 1.2 air miles per dollar for every $2,000 you spend and 1.5 air miles per dollar for any amount after, that’s 1,200 air miles points you’ll be earning per month on a minimum spend of $1,000 each month. So $1,000 a month = 1,200 air miles.
  • Travel Credit Card B: if travel credit card offers you 1 air mile for every $1.20 you spend but gives a bonus of 300 air miles for every $500 spent (up to a minimum of $1,000), you would earn 1,433 each month on a minimum spend of $1,000. So $1,000 a month = 1,433 air miles.

So the bottom line is to choose a card that offers you the most points for a “safe” spending minimum of $1,000 a month – unless you have budget to comfortably pay more.

 

An Annual Fee That’s Worth the Expense

Depending on the travel credit card you’re looking for, the annual fee can range from $100+ to $300+. However, some cards will give you the option to waive the annual fee for the first year.

Is there any fee that’s worth/not worth paying? Well, that depends. Because you see, the travel credit cards with the higher annual fees tend to be the ones offering the best perks and rewards while cards with lower annual fees might only offer a frequent flyer programme and not much else.

If you’re a frequent traveller, paying up to $300 a year for a travel credit card that gives you faster air miles accumulation, FREE access to VIP airport lounges, FREE access to hotel loyalty/rewards, air miles sign-up bonuses, retail/restaurant/petrol discounts and FREE travel insurance – then the fee is well worth it as long as you’re using your card (wisely) enough to maximise those rewards!

When is the $200+ to $300+ annual fee not worth it? Simple, when you’re not using it enough to take advantage of the perks that come with the card. In that case, you’re paying the credit card issuer up to $300+ a year just to take up wallet space!

 

Final Note: If you’re a frequent flyer looking for the best travel credit cards available, don’t worry – we’ve done your homework for you. You can read about the best travel credit cards out there by reading our recent article on the 3 Best Credit cards for Frequent Flyers in Singapore.

Even if you’re not looking for a travel credit card, that’s OK. Because chances are good you’ll find the right rewards, shopping, petrol or entertainment credit card with our Credit Cards Wizard.

What do you think is the best travel credit card out there? Share your thoughts with us on Facebook! For even more useful information on everything personal finance, visit MoneySmart today!

 

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Jeff Cuellar

I'm known by many titles: copywriter, published author, literary connoisseur, ex- U.S. Army intelligence analyst, and Champion of Capua.