When you are looking for Good Travel Cards, the most important thing to consider is the rewards value they offer. This encompasses several factors, including the average rewards rate, the potential for annual rewards earnings, the value of sign-up bonuses, and how much your rewards are worth when you redeem them. Understanding these elements is key to choosing a travel card that truly benefits you.
To really understand if you’re getting a good travel card, it’s crucial to estimate how much you might earn in rewards each year. This starts with looking at the card’s average rewards rate across different spending categories and seeing how well these categories match up with typical spending habits. Essentially, we need to know if the card gives you high rewards in the areas where people spend the most.
To get a clear picture of average spending, we use data from the Bureau of Labor Statistics (BLS). According to the latest BLS data, the average total spending per consumer in 2023 was about $77,280. However, not all of this spending goes on credit cards to earn rewards. We need to subtract things like housing costs, vehicle purchases, and education expenses to focus on what we can actually charge. This leaves us with an estimated “chargeable” annual spend of around $25,500.
This chargeable spending breaks down into categories like this:
- Groceries: $6,000
- Dining out: $3,900
- Entertainment: $2,500
- Gas: $2,400
- Apparel and services: $2,000
Using these spending proportions, we can weigh the bonus categories of different good travel cards. For instance, since groceries make up a significant portion of average spending, a card’s rewards rate for groceries gets a higher weighting, around 26 percent in our calculations.
Another important aspect of good travel cards is the redemption value of the points or miles you earn. We also look at how much points or miles are typically worth across various issuer, airline, and hotel rewards programs. You can find more information on point valuations from resources like this Bankrate guide.
By combining these weightings and rewards valuations, we can estimate the average annual rewards earnings for a card. This tells you roughly how many points or miles you could earn if your spending is typical and you use the card for most purchases, and what those points are actually worth. We also use these point valuations to calculate the real value of a card’s sign-up bonus, helping to determine if it’s truly one of the good travel cards available.
After calculating all of these factors, we can score each card based on how its average rewards earnings, sign-up bonus value, rewards rate, and redemption value compare to other rewards cards. The better a card performs in these areas, the higher its score will be. This scoring system helps us identify and rank the good travel cards, making it easier for you to find a card that offers significant value and rewards for your travel spending.
