The Motley Fool Canada’s top travel credit card picks at a glance:
|Scotiabank Gold American Express Card|| |
|American Express Cobalt ® Card|| |
|American Express ® Aeroplan ® Reserve Card|| |
|BMO eclipse Visa Infinite Card|| |
|BMO Air Miles Mastercard|| |
Our top pick: Scotiabank Gold American Express Card
In one respect our top pick for travel credit cards was easy. The Scotiabank Gold Amex is the only credit card from a major bank that doesn’t charge a foreign transaction fee. These pesky fees can amount to 2.5% or more and rack up each and every swipe when spending outside of your home currency. But it goes far beyond just the lack of foreign transaction fees. A generous welcome bonus, high rewards-earning opportunities, plenty of redemption offers, and a great suite of Amex credit-card perks make this a superb all-around travel card.
Runner-up: American Express Cobalt ® Card
The Amex Cobalt card lacks the no-foreign-transaction fee feature of the Scotiabank Gold Amex, so just like basically all other major cards, you’ll pay a 2.5% fee when you transact outside of Canadian dollars. Apart from that, though, there is just as much to like with the Cobalt card. There’s a great welcome bonus, a high rewards earn rate, and great American Express perks. One notable advantage with this card: you earn accelerated (2x) points when purchasing plane tickets. This is not the case with the Scotiabank Gold Amex.
Also consider: American Express ® Aeroplan ® Reserve Card
If you’re interested in upgrading your travel card experience, look no further than the Amex Aeroplan Reserve card. The price point is steep ($599 annual fee), but the features are too numerous to list. American Express notes that you can “earn up to $3,000 or more in value within your first year” once you combine the welcome bonus and some of the other generous perks like airport lounge access and the potential to earn a Worldwide Companion Pass. That’s no exaggeration, the earning potential with this card is high. Make sure to note too that you’re earning Aeroplan points here, which are among the more valuable in the world of points programs. If you’re a regular traveler and want to treat yourself, this card is well worth considering.
All of our top travel credit card picks:
Scotiabank Gold American Express Card
Top overall travel card
On Scotiabank’s secure website.
- 5x Scene+ points on eligible dining, grocery, and entertainment
- 3x Scene+ points on eligible gas, transit, and streaming services
- 1x Scene+ points on everything else
Up to 45,000 Scene+ points (worth up to $450 towards travel)
Credit rating: Good
Minimum income: $12,000
American Express Cobalt ® Card
Runner-up top overall travel card
- 5x Membership Rewards® on eligible food and drink
- 3x Membership Rewards® on eligible streaming subscriptions
- 2x Membership Rewards® on eligible travel and transit
- 1x Membership Rewards® on everything else
Up to 30,000 Membership Rewards® points in the first year (2,500 points per month for each month that you spend $500 on the card during the first year)
$155.88 ($12.99 monthly)
Credit rating: Fair
Updated: 03/01/2022. This post was not sponsored. The views and opinions expressed in this review are purely those of the author. American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information click the Apply now link. Conditions apply.
American Express ® Aeroplan ® Reserve Card
Great high-end card for travel rewards and perks
- 3x Aeroplan points on eligible purchases made directly with Air Canada and Air Canada Vacations (when Welcome Offer ends)
- 2x Aeroplan points on dining and food delivery
- 1.25x Aeroplan points on everything else
Earn up to 85,000 Welcome Bonus Aeroplan points. (25,000 points when you spend $3,000 within the first 3 months; and 5,000 points for each billing period in which you spend $1,000 during the first 12 months).
Credit Rating: Very Good
Updated: 05/12/2022. This post was not sponsored. The views and opinions expressed in this review are purely those of the author. American Express is not responsible for maintaining or monitoring the accuracy of information on this website. For full details and current product information click the Apply now link. Conditions apply.
BMO eclipse Visa Infinite Card
Top Visa travel rewards and perks
- 5x BMO Rewards on eligible groceries, gas, dining, and transit
- 1x BMO Rewards on everything else
Up to 40,000 BMO Rewards points and annual fee waived for 1st year
Credit rating: Very good
Minimum income: $60,000 (individual), $100,000 (household)
BMO Air Miles Mastercard
Top-rated no-fee travel card
- 1 BMO AIR MILE for every $25 spent and 3x miles for spend at participating AIR MILES partners.
Earn 800 AIR MILES when you spend $1,000 in the first three months ($80 value)
Credit rating: Good
What is a travel credit card?
Travel credit cards allow you to earn points or miles on eligible purchases, which you can redeem for travel-oriented goods and services. These include airfare, car rentals, hotel stays, vacation packages, and more. They also offer various perks, such as concierge services, airport lounge access, travel-related insurance, and zero foreign transaction fees.
Travel cards are tremendously popular, especially among avid travellers. They provide exceptional deals when it comes to rewards compared to other types of credit cards. The points are generally more valuable when used to cover travel-related expenses than redeemed for gift cards, statement credits, or everyday merchandise.
Due to their exceptional value, travel cards usually charge an annual fee. The annual fee can be pretty steep, but some brands charge reasonable fees or forgo them altogether.
What are the different types of travel cards?
There are several different ways to categorize travel cards. However, the flexibility of their rewards programs is one of the most critical aspects that can help you distinguish them from one another. Travel cards can be characterized as general or co-branded.
With a general card, you can redeem your points for travel-oriented rewards with any airline, hotel chain, vehicle rental agency, etc. You’re not limited to one brand and have numerous options to choose from when you decide to convert your points.
Co-branded cards have a partnership with a specific airline or hotel chain brand. If you hold this type of card, you redeem your points for rewards exclusively with that brand.
How do travel rewards programs work?
A travel card functions very much like a standard points card, but its rewards program is geared toward travel-related goods and services. Each travel card has a unique structure that determines how you can earn and redeem points.
Two different models dictate how you collect rewards points on your purchases: a flat earn rate or bonus earn rate.
Under a flat-earn-rate model, you garner the same number of points on every dollar you spend, no matter what you charge to your card. One spending category isn’t more profitable than another, which enables easy and efficient tracking of points.
Under a bonus-earn-rate model, the number of points you collect per dollar varies by the spending category. For example, you might earn two points for every dollar you spend on gas, groceries, and dining and one point for every dollar you spend on everything else.
How you’re able to redeem your points depends on the redemption model(s) your travel card employs. Some are straightforward, while others are more intricate and will necessitate some time to decipher.
The simplest model is one where the value of each point stays constant, regardless of the reward. This type of model enables you to quickly calculate the exact dollar value of a particular reward and the number of points needed to gain access to it.
Some travel cards come with complex models where the value of each point fluctuates according to the reward. The points’ worth can vary based on factors such as your flight destination, the date of your departure, and whether you use them to cover airfare or accommodation. Under this redemption model, determining the optimal way to utilize your points may entail some research on your part.
Certain travel cards also allow you to transfer your points to other loyalty and frequent flyer programs. In some cases, it’s advantageous to use points through an alternative rewards program, as you can extract more value out of them. Again, you’ll have to crunch some numbers to determine if a transfer is warranted. Still, it’s always nice to have this option available.
What types of perks and benefits do travel cards offer?
Besides lucrative rewards programs, travel cards offer a wide array of perks and benefits, which can save you a nice sum of money and make your trip more enjoyable.
The best travel credit cards come with a travel insurance package, which protects you from trip cancellations, flight delays, theft, accidents, emergency medical care, lost baggage, and more. Travel insurance is a key benefit you should inquire about when scouting for a travel card.
Travel cards routinely offer other perks, including concierge services, airport lounge access, sign-up bonuses, free baggage checks, discounted tickets, hotel and flight upgrades, and priority boarding.
What credit score do you need to get a travel card?
In most cases, you’ll need a credit score of at least 660 before the card issuer approves your application. A score between 660 and 724 is considered a “good” credit score and should be sufficient for most travel cards. However, the minimum credit score required varies; travel cards with top-tier rewards programs and benefits demand higher scores.
Is it worth getting a travel credit card?
Whether it’s worth getting a travel card or not will depend on your lifestyle, budget, and spending habits.
Travel cards are geared primarily to those who frequently travel, as the rewards and perks are skewed heavily toward travel-related goods and services. If exploring the globe is your passion, a travel card can save you a nice chunk of change on flight tickets, hotel stays, car rentals, and other travel expenses. And when you factor in the other perks and benefits you’ll have access to, keeping one in your wallet when you travel is a no-brainer.
Conversely, if you consider yourself primarily a homebody, you’ll find travel cards less appealing. You may be better off with a cash-back card or other rewards card that allows you to redeem points on your everyday shopping. Also, many travel cards charge an annual fee, which may be hard to justify if you don’t take full advantage of all they have to offer.
How can you pick a travel card?
1. Decide the type of travel card you want
The first critical decision you’ll have to make is whether you’d prefer a general card or a co-branded card. A general travel card is an excellent option if you value flexibility — you’ll have an abundance of choices at your disposal when you decide to redeem your points. General cards are ideal if you’re chiefly concerned with keeping your travel costs low. With a wide range of airlines and hotels to choose from, you’re bound to find a deal that fits neatly within your budget.
Suppose you travel routinely with a particular airline or have a preferred hotel brand you book your accommodation with. In that case, you could reap more benefits and cost savings by opting for a co-branded card. You’ll naturally have fewer options when converting your points to rewards, as you’re restricted to a specific brand.
However, co-branded cards often provide superior benefits and perks that general cards don’t offer. These include complimentary lounge access, seat upgrades, free checked bags, priority boarding, and discounted companion fares.
2. Consider your spending habits
Evaluate your spending patterns to see what expenses constitute the bulk of your budget. Ideally, you’ll want a travel card that earns you the most points from these spending categories. That way, you can extract as much value as possible with each purchase you make.
If you can’t find a suitable travel card that aligns with your spending habits, one that employs a flat-rate points model will usually suffice.
3. Compare rewards programs on cards
Evaluating rewards programs is crucial, as you’ll want to ensure you’re getting the most out of the points you earn. Besides browsing the specific travel-oriented rewards a card’s program offers, you should assess the dollar value each point is worth.
Determining these values may require diligent research and number crunching, especially since there are several types of loyalty and frequent flyer programs in Canada, each one with a unique points-redemption model.
The most gainful programs offer a ratio of $0.01 per point, so this should be your benchmark. Here’s a quick way to assess how good of a deal you’re getting on a specific redemption:
Step one: Verify the cost of the reward in dollars.
Step two: Find out how many points you need to redeem for the reward.
Step three: Divide the cost in dollars by the number of points required.
For example, suppose a particular reward requires 10,000 points and the dollar value is $85. In this case, each point would be worth $0.0085.
4. Consider the fees
Most travel cards’ annual fee ranges from $100 to $150, but some charge higher rates. While you may scoff at the notion of having to pay an exorbitant annual fee, the rewards and benefits travel cards provide can easily offset the cost. Still, if you’re dead set on avoiding yearly fees, travel cards are available that don’t charge one. Bear in mind, though, that the rewards and perks associated with zero-annual fee cards aren’t as lucrative as those found on their pricier counterparts.
Foreign transaction fees should also be on your radar, especially if you’re prone to splurging abroad. The costs can quickly add up, so be sure to select a travel card that eschews foreign transaction fees if you anticipate heavy spending during your trips.
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