When it comes to travel credit cards, itâ€™s easy to get caught up in how many miles (or points) you earn per dollar. Often times, thatâ€™s the deciding factor in why someone chooses one card over another.
However the ironic thing is that your rewards program might only be the second most important thing to consider. Why? Because sometimes the benefits are worth far more than the rewards. Here are five examplesâ€¦
1. First checked bags for free
As Iâ€™m sure you are aware, many airline cards give you the first checked bag for free. For example, you get this perk with the Delta SkyMiles and United/Continental cards.
Both of these airlines normally charge $25 per bag one-way (so $50 roundtrip). If a husband and wife fly twice per year, thatâ€™s a combined savings of $200 for having the card.
So how much would you have to spend to earn that much? Well take the Capital One Venture â€“ it gives 2 â€œmilesâ€ per dollar and each â€œmile is worth one cent when redeem for travel. That means to earn $200 worth, you would have to spend $10,000.
Conclusion? This can be an extremely valuable benefit even if you donâ€™t travel a lot. Make sure you factor in the value of the free checked bags when picking out a card.
2. Free (or discounted) companion tickets
At $95 per year, the Chase British Airways Visa card is definitely not cheap. Especially when you consider the fact that you are restricted to which airlines you can redeem your miles on (British Airways, American Airlines, and some international partners).
But if you donâ€™t travel alone, this card offers a lot of value. Why? Because every calendar year that you spend at least $30k, you earn a â€œTravel Together Ticketâ€ which is their name for a companion ticket. Itâ€™s totally free except for the usual taxes and fees you will have to pay, which you can read about here.
If you calculate the normal cost of a ticket (minus the taxes/fees) it is typically several hundred dollars or moreâ€¦ which is probably a higher value than the BA miles you would have earned on making $30k in purchases. This is why traveling couples should heavily weigh whether or not there is a companion ticket benefit included with their card.
3. Foreign transaction fees
If you travel internationally, then you already know what a pain in the butt these pesky fees can be. Getting slapped with a 3% surcharge for all your foreign purchases can add up fast.
On a $1,000 worth that would be $30 in fees. But a frequent traveler could easily spend $10k/year overseas and that could mean $300 in foreign transaction feesâ€¦ OUCH! And obviously, $300 in fees would be more than the value of say, 10,000 airline miles (assuming you earned 1 mile per dollar). This is why if you are a frequent international traveler, credit cards without foreign exchange fees should be on your shortlist.
4. Primary Car Rental Coverage
â€œAuto Rental Collision Damage Waiverâ€ is what the credit card companies call their rental insurance benefit. The reason they donâ€™t just call it â€œcar rental insuranceâ€ is because unfortunately, thatâ€™s not what is.
You see the credit card rental coverage comes with many rules and exclusions, one of which is that it is only secondary coverage â€“ that means it wonâ€™t pay out until you exhaust any and all other forms of coverage.
So if your regular car insurance policy covers you while in rental vehicles too, that means you will have to file a claim with them (and your credit card coverage will only kick in for what they donâ€™t cover). Typically that means Visa or MasterCard is only on the hook for paying your deductible.
The benefit of having primary rental coverage on your credit card is that it will pay out first. So if you get in a fender-bender with your rental, you wonâ€™t have to worry about the claim being counted against your personal policy.
A few airline cards offer primary coverage but most do not. So if you rent a lot, make sure you factor this benefit into the equation when deciding on which card to apply for.
5. Airport Lounge Access
If you ever have the privilege of traveling first class, then you already know how great these places can be. A first-class/VIP lounge is a nice place to kick back and relax while you wait for the flight. There will be free drinks, snacks, and amenities like internet and clean restrooms (the latter of which is a true luxury in any airport!).
Normally to get access to these, you need to cough up some money for a Priority Pass membership, which costs a few hundred per year. Or you need to have a first-class ticket in hand. The other way to get in free is with a high-end travel credit card. For example, the Delta Reserve card gives you free access to the Delta SkyClub Lounge.
For those who would normally be buying airport lounge access separately, it might be worth getting a credit card that comes with it.
Michael wrote this guest post. As the owner of CreditCardForum.com, heâ€™s constantly researching credit cards with no foreign transaction fees, companion tickets, and the other benefits mentioned abo