The average earn rate on travel rewards cards has reached a cruising altitude of 1%, NerdWallet reports, but redeeming miles can be challenging. Unless you fly one airline a lot, go for one of the newer breed of cards that are airline agnostic. “The generic travel rewards cards don’t have blackout dates or restrictions,” says Ben Woolsey of Creditcards.com.
Go abroad a lot? More cards have no foreign transaction fee (27% vs. 4% in 2010). Only your plastic may not always work: Many countries are moving to a “chip-and-pin” technology available on few U.S. cards.
BEST FOR TRAVEL REWARDS
Barclaycard Arrival World MasterCard (barclaycardus.com)
APR: 15% to 19%
Annual fee: $89 (waived first year)
Sign-up bonus: 40,000 bonus miles if you spend $1,000 in first 90 days (buys a $400 flight)
Rewards: 2 miles per $1 spent; 10% miles back when you use them for travel
Why it’s a winner: Card not only comes with one of the largest sign-up bonuses but also has an impressive ongoing rewards rate of 2% with no caps. Miles can be applied as a statement credit when you spend on any kind of travel, be it flights, cruises, car rentals, or hotels. So you have a lot more leeway than an airline card. Plus, Arrival World MasterCard does not have a foreign transaction fee.
The caveat: Doesn’t have chip-and-pin technology, so it might not always work overseas. A salesperson can manually put through a magnetic strip card like this one, but you could have trouble at unmanned kiosks.
BEST FOR USING OVERSEAS
Andrews Federal Credit Union GlobeTrek Rewards (andrewsfcu.org)
APR: 8% to 18%
Annual fee: $0
Sign-up bonus: 5,000 points with your first purchase
Rewards: One point per $1 spent
Why it’s a winner: One of a handful of cards in the U.S. that come equipped with chip-and-pin technology while also having no foreign transaction fee and no annual fee. You can join the Andrews Federal Credit Union by first joining (for free) the American Consumer Council.
The caveat: Value of rewards on the GlobeTrek is average — and they cannot be redeemed for cash, only for travel and merchandise; this card is really only for use while traveling overseas.