Our Guide to the Best Travel Credit Cards
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Discover the methodologyDoes your job require a lot of travel? Are you an international island hopper? Or are you simply planning your dream vacation?
If you answered yes to any of those questions, you may benefit from a travel credit card. A travel credit card allows you to earn points on everyday purchases to then be converted into points that can be used towards your travel - from airfare to hotels, to cruises, plus many other perks.
Check out our guide to travel credit cards, how you may benefit from having one, and check out all of the perks that come along with the card.
What are travel credit cards?
Most Canadians will agree that travel is expensive. A good travel credit card can help offset the cost and make your dream vacation a reality. By using your travel card the right way, you could even have a trip for free. A travel credit card rewards you with points or miles every time you make everyday purchases.
In addition to earning points that can be redeemed for everything from plane tickets and hotel stays to cruises, vacation packages and more, there are also travel credit cards that offer additional perks. These include access to airport lounges, welcome bonus offers and travel insurance that can further help you save on travel.
How do travel credit cards work?
Travel credit cards work by providing points for purchases you make with that card. Those points can then be used towards travel purchases any way you see fit.
With some travel cards, they offer the same amount of rewards on every purchase. For example, you may earn 2 points for every $1 you spend with your card.
However, most travel rewards credit cards have what is known as a tiered rewards system when making purchases. The type of structure can vary quite a bit between card providers. You may earn more points on purchases made in certain categories, such as travel, groceries, gas and drugstores. All other purchases will have lower rewards points. When choosing a travel card, you will want to choose a reward structure that best aligns with your spending habits.
Good to know
Travel credit cards may offer even more points or miles when you make purchases with your main partner. Some loyalty programs have a network of partners where you can earn additional points or miles.
Advantages and disadvantages of travel credit cards
As with any credit card, there are pros and cons to a travel credit card. However, we will break down some benefits and possible disadvantages of a travel card.
One of the largest benefits of a travel credit card is that the more purchases you make, the more points and rewards you accrue. However, if you are not able to pay off your monthly balance, you will start incurring high-interest rates, therefore, making the cost of maintaining the card may outweigh the benefits.
Pros:
- Earn miles or points on purchases that you can use toward flights, hotels or other travel expenses.
- Some travel rewards credit cards can offer additional benefits and perks, including airport lounge access, introductory points or miles bonuses and free checked bags.
- A travel rewards credit card could help you achieve elite status faster in participating in airline frequent flyer programs or hotel frequent guest programs.
Cons:
- When choosing a travel rewards card, it's important to weigh the value of rewards earned against what you might pay for an annual fee or in interest if you carry a balance month to month.
- Some airlines and hotels may restrict the availability and have blackout dates for cardholders who wish to travel.
- The amount you have to spend to redeem an initial bonus may be outside the amount you can pay off and may not be worth the cost.
When should I use a travel credit card?
Travel credit cards are a great fit for frequent travellers, be it for business, international or luxury travel. By using your travel card on even things like everyday purchases, you are accruing points that can then be redeemed towards your travel.
The other perks of a travel credit card are not just that you can use points towards your travel plans, but you should also use it for things such as rental car insurance while travelling. You may even be able to get access to exclusive airport lounges just by being a card member.
How should I pick the best card?
Picking a travel credit card should be very similar to picking out a normal credit card. The card you choose should be based on the type of travel you enjoy, how you use your credit card (and on what purchases) and which additional travel benefits fit your lifestyle. Some things to consider picking the best travel card for you:
- Interest rates
- Annual fee
- Welcome bonuses
- Earn rate
- Types of rewards available (general vs airline vs hotel)
Check our comparison tool to quickly compare and find the best travel credit card for you.
Compare dozens of Canada's top credit cards now
What types of travel credit cards exist?
In general, there are three main categories of travel credit cards.
General travel rewards credit cards
The points earned with a general travel reward card can typically be used for any type of travel redemption, such as airline tickets, hotels, car rentals and cruises. Your points don't belong to one specific program which gives you more options on how to redeem your points.
Airline rewards credit cards
Airline credit cards allow you to earn points or miles for a specific airline. If you are a frequent flyer and typically fly with one specific airline or a network, having an airline credit card could be beneficial for you.
Hotel rewards credit cards
While free flights may be more appealing to some Canadians, others may be more interested in getting a luxury stay at a nice hotel. Hotel rewards credit cards also typically include benefits that will enhance your stay with things like early check-in and late check-out.
Which travel credit cards are internationally accepted?
Any travel card with a Visa, Mastercard, or American Express logo is internationally accepted. Visa and Mastercard are the most widely accepted networks. This means you should be able to use your card at any merchants that take cards around the world.
Good to know
We recommend checking with the bank to see if you can use your card in the country of your destination. It is also always recommended to let your bank know you will be travelling internationally so they do not block purchases.
Can I get a travel card with bad credit?
If you are in a situation with bad credit, it may be difficult for you to obtain a credit card specifically related to travel. There are steps you can take to improve your credit score by obtaining a secured credit card. Once you have built up your credit, you may then be able to qualify for a travel credit card.
If you are unsure of where to begin to start fixing your credit score, check out our guide on how to obtain a secured credit card.
Which credit cards cover rental car insurance?
Most travel cards offer rental car insurance as a benefit. Travel credit cards provide collision damage waiver and loss damage waiver insurance which means you would be covered for any damage to the rental car itself, including if it were lost or stolen.
You will have to pay for your rental car by using your travel credit card and then decline the collision, damage and loss waiver insurance offered by the rental agency for your card's coverage to apply.
Keep in mind the rental car insurance with most travel credit cards will not provide third-party liability or personal injury insurance. In other words, it will only cover you for the cost of the rental car.
Which travel credit card offers the best rewards?
The types of rewards a travel credit card offers will vary slightly depending on the issuing bank. It will boil down to what you want out of your travel credit card and how you want it to work for you. You may want a card that earns you the most points or if you are more fee sensitive, you may prefer a card that has no foreign exchange fees. We have compiled a list of some of the travel credit cards in each category.
| Credit score required | Travel credit card | |
|---|---|---|
| Overall Travel Credit Card | Excellent | CIBC Aventura® Visa Infinite™ Card |
| Travel Card for Earning Travel Points | Fair | American Express Cobalt® Credit Card |
| No Foreign Transaction Fees | Excellent | Scotiabank®* Gold American Express® Card |
| No-Fee Travel Credit Card | Good | MBNA Rewards Platinum Plus® Mastercard® |
Check out our comparison tool for a thorough breakdown of these travel credit cards and more. Find the one with the best rewards for you!
Compare dozens of Canada's top credit cards now
What kind of travel insurance is offered on a travel credit card?
Many Canadians know that when they travel there is always a possibility that a medical emergency could happen and that it can end up being costly. This is why most people opt to have some form of travel insurance in place before they embark on their trip.
Some travel insurance credit cards will cover you for any health issues or medical emergencies that might occur while you are travelling.
For example, a travel credit card like the Scotiabank Passport Visa Infinite Card will cover you with:
- 25 days of emergency medical insurance
- Up to $500,000 in travel accident insurance
Keep in mind that not all travel credit cards are created equal and this extends to what amounts of travel insurance a card provider will offer.
Good to know
If your travel credit card does not provide travel insurance or you want additional travel coverage than what is offered by your credit card, check out our travel insurance guide.
If I cancel my travel credit card, what happens to the points I've collected?
The short answer: it depends. If you have a travel credit card that is a co-branded credit card meaning the bank has a partnership with an airline or hotel, you can cancel the card and your points will remain safe and valid.
However, if you have a travel credit card that is not co-branded and is directly from a banking institution, you could risk losing all of the points that you have accumulated.
Always make sure to read the fine print when signing up for a travel credit card or making the decision to cancel your card.
Good to know
You may want to think twice before closing your travel credit card. Did you know that cancelling or closing a credit card once it is paid off can harm your credit score? Refer to our guide on how cancelling or closing a credit may affect your credit score.
