We are all familiar with credit cards that offer rewards in the form of airline miles, as they are some of the oldest and most popular reward cards on the market. Later, hotels offered similar products that rewarded customers with points in their loyalty programs.
Although we have awarded Best Credit Card in America honors to airline and hotel cards in the past, this month we are focusing on finding the best products that offer travel rewards not associated with a particular travel provider.
So what kind of credit cards offer travel rewards without partnering with airlines, hotels or other travel companies? There is an emerging category of credit cards that are marketed to those who are disaffected by airline and hotel loyalty programs. These programs tend to offer points and miles for award flights and hotel stays, but can make it difficult to redeem rewards without blackout dates, surcharges, and capacity restrictions. So in response, several credit card issuers now operate their own loyalty programs that offer statement credits towards travel purchases from any provider.
Members of these credit cards programs can often book any airline, hotel, rental car, or cruise, and use their points or miles to receive a statement. This type of rewards program offers three clear advantages.
First, cardholders are not at the mercy of travel providers who can restrict award inventory or change the terms of their programs. But in addition, travelers can earn miles and points from their award travel, and even be eligible to receive perks and upgrades not offered to those traveling on awards booked from the travel provider. So cardholders get a free flight or hotel stay, without being treated like freeloaders. And finally, since the statement credit is issued against the entire purchase price, all taxes and fees are included.
This month, we judged cards based on the use of the bank’s points or miles, not rewards that can be transferred to the programs of third-party travel providers. Here are the best travel rewards credit cards in America.
The Winner: Barclaycard Arrival with $89 annual fee
Barclaycard has been known for offering reward cards co-branded with dozens of partners, but now it appears to be trying to go it alone in the travel rewards market. And with its initial offerings, it is definitely swinging for the fences.
The rewards: New applicants currently earn 40,000 miles as a sign-up bonus after spending $1,000 within the first 90 days of purchases. Cardholders also earn two miles per dollar spent on all purchases. Miles are worth one cent each as statement credits towards travel purchases, and cardholders receive a refund of 10% of the miles they redeem. Therefore, cardholders receive 2.2 cents in rewards value for each dollar spent.
The costs: There is an $89 annual fee for this card, but that is waived the first year. This card is also offered in a version with no annual fee, but with half the sign-up bonus and only double miles on travel and dining. In addition, Barclaycard deserves praise for offering this card with no foreign transaction fees.
1 st Runner-Up: Capital One Venture Rewards Visa Signature Card
The rewards: Capital One made a big splash in this field a few years ago by offering up to 100,000 miles to new applicants. And today, this card still offers double miles on all purchases, albeit with a more modest sign-up bonus. New cardholders receive 10,000 miles, worth $100, when they spend $1,000 on purchases within the first three months of opening an account. Miles can be redeemed for one cent each as statement credits toward travel expenses, so cardholders receive the equivalent of 2% returns on their purchases.
The costs: There is a $59 annual fee for this card that is waived the first year, and all Capital One products have no foreign transaction fees.
2nd Runner-Up: U.S. Bank FlexPerks® Travel Rewards Visa Signature® Card
The rewards: This U.S. Bank card takes a different approach to travel rewards. New applicants can receive 17,500 Flexpoints after their first $2,500 in spending. Cardholders earn one FlexPoint for every dollar spent, but double points for purchases in the category they spend the most money in each month, such as gas, groceries and airline travel. Points can be worth as much as two cents each towards airline, hotel, car rental and cruise awards, but travel must be booked through their FlexPerks Reward Center. For example, 20,000 FlexPoints can be redeemed for a ticket with up to $400 in value, and 30,000 points are needed for a ticket of up to $600 in value. So the value per point is relative to how closely the ticket costs to each $200 increment. Cardholders also receive a $25 airline allowance towards each award ticket for charges like food, drinks and baggage.
The costs: There is a $49 annual fee for this card that is waived the first year. There is a 2% foreign transaction fee for transactions in U.S. Dollars, and a 3% fee on all charges in another currency.
If you’re interested in learning about other credit cards, you can check out the rest of our Best Credit Cards in America series.
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