We recently got a travel rewards credit card. Here's the thought process we went through …
If you pay off your credit card balance every month in full, it makes perfect sense to get some kind of rewards credit card. Using a rewards credit card, for the most part, results in an interest-free loan for a few weeks, plus a little bit back for the privilege.
The kind of rewards credit card that makes the most sense depends on a number of things, particularly what activities you enjoy, and where you shop.
We recently signed up for a Marriott Bonvoy Boundless Visa card, which we'll use for most of our purchases for a bit instead of our beloved Chase Sapphire (also a rewards card).
I'll explain our thought process.
Travel rewards credit card for swim meets
I'm a highly infrequent flier and don't travel that much besides.
Our daughter is a competitive swimmer and travels to a number of meets year-round. She's also going to be looking at colleges soon.
As such, my wife has made a series of fairly regular trips out of town for several days at a time and staying in hotels.
She asked me to research travel rewards programs to see if they would be worth the trouble. Our Chase Sapphire has been a great rewards card, and the rewards are flexible (as in cash back). Because they're flexible, though, they're typically smaller. A travel rewards program, she surmised, would give rewards that were more restrictive, but larger.
I started my search with the hotels they liked
I asked her to list the hotels she stayed at and liked. (Staying at hotels for this purpose has less to do with cost and more to do with actually getting a restful night's sleep, because the swims will be better, all other things being equal.)
From there, I looked up the companies that owned those hotels. It wasn't a long list:
- Hilton
- Wyndham
- Marriott
- IHG
- Radisson
- Choice
- Hyatt
It wasn't surprising that they all had rewards programs and branded travel rewards credit cards. It also wasn't surprising that the rewards for each were really great if you purchased hotel stays at their hotels.
Signing up for the cards had some pretty nice bonuses, equivalent to a few nights free. That would get us mostly through one swim meet which would otherwise cost us hundreds of dollars for a hotel.
Seeing that it was worth it, we continued.
We did a trade analysis for the best single hotel brand
Actually, my wife did most of the thinking on this one, because I didn't really go to any of the hotels.
We went into this with the intent of picking one travel rewards card. We could have applied for more than one, but that has disadvantages:
- More than one card means more spending to get sign-on bonuses. There was a spending trigger for the big sign-on bonuses for each card. Usually this was $3,000 in the first three months, and the point equivalent of a couple hundred dollars showed up. Doing this for more than one card, though, means separate spending, and we didn't necessarily want to commit to that.
- Multiple cards means more keeping track of spending to build up points. Rewards credit cards are usually an automatic perq. Use the card, get rewards. With multiple cards floating around, there's an extra decision about which one to use, and that's a lot of work and bookkeeping. We wanted to keep things relatively simple.
- Multiple cards means higher debt capacity, and that can affect credit scores.
So we looked for the best single hotel company with the hotels that would best match what we needed over the next couple of years.
We considered the proximity of the hotels to the pools, how good the stays were that we knew about, where our daughter's teammates usually stayed. We also leaned away from the cheapest hotels even if they were nearby.
The ranking process was more “arrival at the one that sounded best” more than any kind of quantitative analysis.
Anyway, after a bunch of looking at hotel maps, considering their previous stays, and sleeping on it, we arrived at the Marriott brand and the Marriott Bonvoy rewards program.
Finally, Bold or Boundless?
The Marriott Bonvoy Visa Signature credit card came in two consumer flavors: Bold and Boundless.
Marriott Bonvoy Bold Visa was the no-annual-fee flavor and Marriott Bonvoy Boundless Visa came with a $95 annual fee.
The Boundless card was the one we ended up getting. We plan to spend $3,000 in the first three months, which gets us three free nights. That's easily worth the $95 right there. The no-annual-fee card started us off with 30,000 points, which wasn't nearly the same.
Additionally, we get double the points on most regular purchases compared with the no-annual-fee version.
If we continue next year with the Boundless card, we'll get another free night after we pay the $95 annual fee, which basically is our money back, more or less.
Overall, the choice was pretty clear for us. The three free nights were something we could attain easily and more than covered the cost of the annual fee.
Takeaway: Things to consider with a travel rewards credit card
First, consider whether you even benefit from one. This requires looking at your activities. If you don't travel a lot, then some other kind of reward card may be better.
Second, find one that you'll enjoy using the rewards. This assumes that you actually use the rewards, of course, but if your free nights are going to be out of the way, or miserable, it doesn't make sense. Consider availability of the hotels you're likely to use, as well as the amenities there.
Third, decide which tier of card makes the most sense for how you expect to use it. Often (but not always) the card with an annual fee is better for “bigger spenders.” Also, the sign-up bonuses for the card can more than pay for the annual fee.
Lastly, decide when it's time to part ways with it. Interests change. We may end up not needing hotel stays as much, in which case we'll consider moving onto another rewards program.
