Are you looking to maximize rewards earned from your adventures abroad? That was us years ago when we embarked on long-term international travel. Back then, we were also on a quest to find the ultimate best travel credit cards, preferably with no annual fees.
The list of credit cards for international travel targeting U.S. consumers is very long. So, how do you choose that best travel credit card? Let’s start with narrowing two main categories of travel credit cards you can choose from. Later, we will detail which travel credit cards we use for all our expenses abroad and why.
Airline Credit Cards
Airline credit cards are cards earning miles that you can redeem for air tickets. Tickets are tied to a specific airline though.
Advantages of Airline Credit Cards
The selling point is obvious. Earn points, earn a ticket. Airline credit cards may come along with other perks. These can include free checked bags, priority boarding, lounge access and in-flight discounts.
The number of miles earned per dollar spent varies with airlines and annual fees charged. Certain airline credit cards can help you earn the coveted elite status faster. The elite status let you earn even more bonus miles and gain access to certain airport lounges.
Disadvantages of Airline Credit Cards
The biggest drawback of this card type is that you are stuck with that airline. If you are flying with one or two major air carriers most of the time, then these cards make financial sense. But, if you are trotting the globe using a wide variety of air carriers, you may need dozens of such cards. This can be impractical.
Moreover, some perks for airline cards can be unimportant for certain travelers. For instance, we prefer traveling light with carry-on luggage and small backpacks. By doing so, we avoid checking in our bags that sometimes can get lost. Thus, the free checked bag perk is irrelevant for us.
Miles Devaluation
Also, once you are ready to redeem your miles, you may be up for unpleasant surprises. Those include blackout dates and restrictions on destinations. Moreover, airlines can increase the number of miles for redemption without any notice. While it does not happen often, this translates to earned points worth less. Sometimes, a whole lot less.
In May 2023, United Airlines announced massive mileage devaluation for many international routes.
| Route | Before | After | Increase (%) |
|---|---|---|---|
| From US to Australia | 40,000 | 55,000 | 38% |
| From US to Japan | 35,000 | 55,000 | 57% |
The devaluation was at a staggering 30% to 60% rate depending on the route. For instance, flying economy from the U.S. to Australia required 40,000 miles before. Now, it is 55,000 (37% increase). Other routes experienced even higher spikes, such as flying from the U.S. to Japan (57% increase).
Cash Back Travel Credit Cards
The second popular type of reward cards is cash back cards. The number of points per $1 spent varies with the category and the card issuer. Certain credit cards with annual fees provide much more attractive cash back rates.
Credit card companies allow you to use points for statement credit, gift cards, online shopping and travel booking. In fact, it became very lucrative for banks to have their own travel booking systems. You can reserve cruises, flights, car rentals and hotels through these websites. Banks typically outsource travel bookings to third-party firms which manage these booking resources.
Is the Credit Card Annual Fee Worth It?
Another choice you will face is whether to pay the annual fee. The simplest way to figure this out is to see if the extra cash back you get is justifiable.
Consider a credit card with no annual fee that provides 2% cash back on all purchases. We will use this card as a basis for comparison. You are thinking of getting a new credit card that provides 4% cash back on all purchases, but costs $200 a year. You gain an extra 2% cash back in exchange for $200/year. For this card to be worth it, you need to charge at least $10,000/year on it ($200/2%).
Of course, this analysis becomes a bit more involved if there are other perks. But, this is how we decide if a card with an annual fee is worth it.
Our Choice of Best Travel Credit Cards
We stopped using airline credit cards after encountering blackout dates, restrictions and devaluations. Instead, we prefer cash back cards with points that we can convert to the benefits of our choice. So, here are the cards that we use 100% of times when traveling.
1. Chase Sapphire Reserve Credit Card (Annual Fee)
We use the Chase Sapphire Reserve credit card to pay for our travel expenses and restaurants. This credit card comes with an annual fee of $550. But, the benefits you get in exchange by far outweigh this cost. It is especially true if you travel at least several months a year.
Chase Sapphire Reserve Benefits
Here are some benefits for the Chase Sapphire Reserve credit card. While the list is long, the most noteworthy perks are cash back on travel bookings through Chase.
- $300 annual credit on travel purchases
- 60,000 bonus points ($600) if you spend $4,000 in the first 3 months.
- 3% cash back: restaurants and food delivery services
- If you make travel purchases (flight, car rental, hotels, cruises) through Chase:
- 5% cash back on air flights
- 10% cash back on car rentals and hotels
- 3% cash back on all travel bookings (Airbnb, hotels, flights, taxi) outside Chase
- 1% on all other purchases
- Point redemptions on travel via Chase earn a 50% bonus
- Priority Pass membership with access to airport lounges
Note, the $550 annual fee is reduced by the $300 travel credit. This effectively makes the annual fee $250.
Hidden Unique Feature of Chase Sapphire Reserve
But, there is one feature that makes the Chase Sapphire Reserve credit card unique. And that is the 50% redemption bonus.
This bonus increases all cash back rates by 50% if you use points on travel bookings through Chase. For example, 3% cash back on travel becomes 4.5%. Cash back on car rentals and hotels turns into 15%. That is a lot of cash back. Also, the $600 sign-up bonus turns into $900. Finally, this 50% bonus makes 1.5% the minimum cash back that you get.
Why Chase Sapphire Reserve is Best for Airbnb?
We compared Chase Sapphire Reserve with other cards, such as Capital One Venture X and Amex Platinum. Chase Sapphire Reserve was the best option available for us, hands down. The main reason is this. We get 3% cash back on any travel purchases outside Chase. This turns into 4.5% cash back with the 50% redemption bonus. Let me explain how this works.
When we travel, we always shop for places to stay. We especially like Airbnb to book our accommodations for its unique locations. With Chase Sapphire Reserve, you earn 4.5% cash back on Airbnb bookings. The closest that this cash back gets is with the Capital One Venture X card. This card provides 2% cash back on travel purchases on third-party websites (e.g. Airbnb). So, we get extra 2.5% cash back when we spend on Airbnb or small guesthouses with Chase Sapphire Reserve.
The Capital One Venture X card costs $395, which is $155 cheaper than Chase Sapphire Reserve. To justify this extra cost, you need to spend at least $6,200 ($155/2.5%). We travel for at least several months a year and spend $6,200 or more on Airbnb, Uber and other transportation. Thus, this alone justifies paying the extra $155. If you are like us, the Chase Sapphire Reserve card is an excellent choice.
Priority Pass Membership
Also, the Chase Sapphire Reserve credit card comes with Priority Pass membership. The membership grants access to airport lounges, where you can eat, drink and relax before departure. You can bring two guests with your card.
The value of Priority Pass membership you get with the card is worth $469 (equivalent of prestige membership). If access to airport lounges is important to you, the Priority Pass membership alone justifies most of the Chase Sapphire Reserve’s annual fee.
Over the last 5-10 years, airport lounges became a bit crowded as more people joined Priority Pass. Still, this is an excellent perk. We used to hate going to airports. Now, we go there 3 to 4 hours earlier and spend time in lounges. And, we are no longer late for our flights. Moreover, you can bring 2 extra guests with your Chase Sapphire Reserve card.
There are many other benefits that I did not list here for this card. Some of them may be relevant for you, some not.
2. Capital One Quicksilver Credit Card (No Annual Fee)
Next is the Capital One Quicksilver credit card. This card used to be our default card before discovering Chase Sapphire Reserve. Quicksilver comes with no annual fee and no foreign transaction fee. The card earns a flat 1.5% cash back on all purchases.
We have looked for different cards with no foreign transaction fees and annual fees. The Capital One Quicksilver card is one of the few out there with 1.5% cash back. This is our top recommendation, if you hate paying annual fees and all extra cash back/perks do not matter to you.
Concluding Remarks
We hope you found this information useful and it will help you choose the best travel credit card for your needs. Feel free to ask any questions or contact us.