The Best Travel Credit Cards

Nov. 9, 2010— -- You can hardly watch TV for more than a few minutes before you are hit by a credit card commercial. Capital One is heavily promoting its "Venture" card, Chase is big on "Sapphire," and AmEx is pushing a new Gold card, but you also see others. With all the intense hype, however, readers question just what's really new:

"Are those widely promoted new credit cards really different, or is the current exposure mainly hype?"

My short answer is, "No, they're not really different, and, yes, there's a lot of hype. Even so, however, the cards may be good deals." Although we've covered this ground before, today's big promotional campaigns suggest that a quick update is in order.

What the Cards Do

Sapphire, Venture, and similar cards are all basically rebate cards—what I call "bank reward" cards. Each time you use the card you get points/miles/whatever that you accumulate in an account maintained by the issuing bank. When you want to use that credit, the bank actually buys whatever you've chosen.

The basic formula is that, with most reward cards, you earn one unit of credit for each dollar you charge to the card, and each unit of credit is worth one cent when you go to redeem it. Different cards modify that formula:

• With some, you earn up to two or even three points for each dollar you charge to the card. Most cards restrict those extra earning options to specific types of purchases: air tickets, groceries, gasoline drugstore items, and such.

• Some cards give you a higher value when you "spend" them, again usually limited to a few types of purchases.
• Most bank reward cards allow you to use your credit to buy anything you want. A few, however, limit point exchange to travel purchases. Several used to limit rewards to airline tickets, but very few now impose that limit.
• Many cards allow you to redeem credit for cash, again typically at the rate of one cent or less per unit.

Regardless of these variations, however, all bank cards use that basic approach.