Thursday, October 4, 2012

Turning Groceries Into Getaways: What You Need To Know About Travel Credit Cards

Credit cards are everywhereit's hard to go a day without using one for something. Gasoline, groceries, internet purchases, restaurants, all of these things can be purchased with your small plastic rectangle. Those cash-only signs behind the register are getting more and more rare.

At the same time, world travel is getting easier and easier. Travel has become attainable for a larger part of the population than ever. International experiences are becoming an important part of higher education with the explosive growth of study abroad programs, and people of all ages are discovering that traveling the world helps them push their own personal development.

Why not feed your own love of travel with your preexisting spending habits?

Travel Credit Cards

The basic idea behind a travel credit card is simple. Making a purchase with the card generates points, generally at a rate of around one point to one dollar (points can be earned in other ways, too, but we'll get into that later). These points can then be redeemed for a variety of things, depending on the cardwith travel cards, this usually means free flights or upgrades.

You can see the power of this ideajust by doing the things you already do every day, you can build up points towards free tickets.

What to Look For

Different cards have different policies. Here are a few things you want to look for:

A Large Sign-Up Bonus: The quickest way to build points on your card is to choose one that has a large bonus just for signing up. Otherwise, you may not have time to build up your mileage before the trip.
The Rate of Points per Dollar: You want to maximize the number of points you get per dollar of spending, of course. If your trip is further in the future, this is a more important factor than the sign-up bonus.
Conversion Ratios: Credit card companies charge varying levels of fees for international purchases. Check with your company about the fees in the region you plan to travel tooif you can find a card that works well in your destination, you might as well use it!

What to Avoid

There are, of course, drawbacks and pitfalls to look out for. Here are a couple of the most common ones:

Your Spending Minimum: Most cards require that you use them a certain amount in order to receive the bonus points. Make sure that this limit isn't higher than what you'd like to be spending! Spending more to get the bonus can become a dangerous cycle.
Annual Fees: Many cards feature annual fees just to hold them, buried somewhere within the small type of the offer. Be careful! If you're not making more from the bonus points than you're paying in fees, it's not worth it!
Inflexible Redemption Options: Some cards may only let you redeem your points with certain

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