There are many ways to save money while traveling, from booking flights in advance to taking advantage of last-minute deals. However, using a travel rewards credit card is one of the easiest and most effective ways. These cards allow you to earn additional cashback rewards and points for travel-related expenses.

How do travel rewards cards work?

Travel rewards cards work like any other credit card. Once approved for the card, you will receive a credit limit to spend. When you spend money on the card, you have the opportunity to earn cash, points, or airline miles that can be redeemed for their cash value or applied to travel expenses like airfare, Uber rides, and more.

What makes a travel rewards card different from other rewards credit cards is that it offers larger rewards for travel-related categories, such as:

– Dining at restaurants

– Transportation expenses (taxis, trains, car rentals, etc.)

– Airline tickets

– Fuel

– Streaming services (for long trips abroad)

In general, using your card for these categories allows you to earn more cashback or rewards points compared to everyday expenses like groceries or retail shopping.

Additional travel perks:

Some travel credit cards offer useful benefits that can enhance your travel experience, such as:

– Free travel insurance for cardholders

– Free mobile device insurance (great if you lose your phone abroad)

– Free access to exclusive airport lounges

– Free or low-cost upgrades on hotel stays and rental vehicles

– Priority seating selection on planes and trains

These additional perks are more common for travel rewards cards with an annual fee, which is how card companies justify the extra charges. Typically, travel rewards cards with no annual fee do not offer many additional perks.

Travel rewards credit cards:

1. American Express Cobalt Card

Annual fee: $12.99 per month ($155.88 per year)

Although it comes with a monthly fee of $12.99, it offers many benefits and perks, including mobile device coverage, 1:1 point redemption with most global frequent traveler programs, shopping coverage, and even free room service/amenities at select hotels.

The Cobalt card also features substantial cashback rewards:

-5x points when dining out

-3x points on streaming services

– Double points on travel and transit

-1x point on all other categories

2. BMO AIR MILES Mastercard:

Annual fee: None

If you're looking for a travel rewards card with no fees, the BMO AIR MILES Mastercard may be suitable for you, especially if you travel frequently.

Cardholders will earn 3 times the miles when shopping with AIR MILES partners, including Shell, Budget, Samsung, Alamo, National Car Rental, and 2x miles at participating grocery stores.

If you want to get the most value from your miles, you can redeem them for airline tickets and travel expenses through the AIR MILES program. However, you can also use points to purchase specific goods (like Samsung phones) or redeem them for cash value.

3. KOHO Premium Prepaid Mastercard:

Annual fee: $84 per year (30-day free trial)

The KOHO Premium card comes included with the KOHO Extra plan, which includes:

– Optional credit-building feature for $7 per month (instead of the usual $10 monthly fee)

– Unlimited electronic transfers

-2% cashback on groceries, dining, and transit

-5% cashback on all other categories

-6% cashback with select merchants

– No foreign exchange fees

Note that the KOHO Premium card is not a credit card but a prepaid debit card.

However, it offers rewards similar to what you would get with a travel rewards credit card. Additionally, the card has no extra foreign exchange fees, making it a great card for those who travel frequently abroad.

You can use KOHO's credit-building service to start building your credit history for a small monthly fee.

4. TD Aeroplan Visa Infinite Card:

Annual fee: $139

The Aeroplan loyalty program was created by Air Canada in 1984, allowing members to earn points and rewards every time they travel with Air Canada or its partner airlines.

Aeroplan is a member of the global Star Alliance network, and Aeroplan members can earn and redeem points on all 26 Star Alliance member airlines.

The TD Aeroplan Visa Infinite Card allows cardholders to take advantage of Air Canada benefits, such as free checking of their first bag and the ability to quickly track their progress toward Aeroplan Elite status.

Additionally, the card offers 1.5x points on eligible fuel and grocery purchases, double points with over 150 Aeroplan partner brands, and 1x point on all other purchases.

If you link your TD Aeroplan card to your Starbucks app, you can earn 50% more points when buying coffee through the app, helping with late-night flight trips.