That about sums up what every globetrotting person dreams of and, like a Santa Clause of global exploration, credit card companies have come along with a dizzying amount of travel-focused credit cards offering all kinds of cash and miles gifts.
This year has been a pretty amazing one for credit card rewards. Chase has led the way with their 50,000-mile offer on the Sapphire Preferred Card but created even more buzz this summer when they launched the Sapphire Reserve and its 100,000-mile offer.
Not to be forgotten in Chase’s presence in the travel rewards market is Capital One, whose Venture Card may not have the miles offers of Chase, but their aggressive marketing with Hollywood types like Alec Baldwin, Samuel L. Jackson and Jennifer Garner have the card in the forefront of many mile-hungry consumers.
Other cards are begging for attention, too: Bank of America’s BankAmericard Travel Rewards and the Discover it Miles offer some solid perks that get lost in the flurry of attention showered on Chase and Capital One.
A big question we’ve had over this past year is, “Which one of these travel cards is the best?” You might think the answer is easy; it’s just a matter of which card gives you the most miles, right?
The question of which travel credit card is best requires a lot more than pure miles or points, though. Annual APR’s, annual fees, intro APRs and redemption bonuses all play a part in the decision.
As you can see, one mile doesn’t always equal one mile. Knowing that, we’ve decided to examine the five travel cards we mentioned above. The cards we’re going to rate are not affiliated with any airline or hotel.
The Criteria for the Best Travel Rewards Credit Cards of 2016
We’re judging these cards based on a sum total of all their benefits. One card could have the most miles with their introductory offer, for example, but that doesn’t mean it’s the best card out there.
In our opinion, a good travel credit card has a few of things going for it, which is why we’ve included a chart that covers 10 different categories:
- Intro miles bonus: How many miles you could get as a new cardmember (at the time of our research).
- Spending requirement to get bonus: How much would you have to spend to get those miles.
- Redemption value: How many miles do you have to use to get $1 in travel rewards.
- Highest possible cash value of promo miles: How much your promo miles are worth, including any bonuses for booking travel through the card’s travel portal.
- Miles transfer to frequent flyer programs: Does the card let you transfer your miles to an airline’s frequent flyer program.
- Miles on purchases: How many miles do you get for every dollar you spend with the card.
- Annual fee: Whether or not the card charges an annual fee, and, if so, how much.
- APR: The annual percentage rate on the card after any promotional APRs.
- Foreign transaction fee: Does the card have one.
- Reward bonus for booking on site: Any percentage bonuses if you book travel through the card company’s travel marketplace (Chase Ultimate Rewards, for example)
|Chase Sapphire Reserve||Chase Sapphire Preferred||BankAmericard Travel Rewards||Capital One Venture||Discover it Travel|
|Intro Miles Bonus||100K||50K||20K||40K||0|
|Spending Requirement for Bonus||$4K in 3 mon.||$4K in 3 mon.||$1K in 3 mon.||$3K in 3 mon.||N/A|
|Redemption Value||100 = $1||100 = $1||100 = $1||100 = $1||100 = $1|
|Cash Value of Miles||$1500||$625||$220||$400||Unlimited|
|Transfer Miles||Yes, multiple||Yes, multiple||No||No||No|
|Miles on Purchases||3:1 on dining/travel, 1:1 on rest||2:1 on dining/travel, 1:1 on rest||1.5:1 on all buys (1.65:1 if a BofA customer)||2:1 on all buys||1.5:1 on all buys (3:1 in 1st year)|
|Annual Fee||$450||$95 ($0 first year)||$0||$59 ($0 first year)||$0|
|APR||16.24%–23.24%||16.24%–23.24%||0% 1st year, 15.24%–23.24% after||13.24%–23.24%||0% 1st year, 11.24%–23.24% after|
|Foreign Transaction Fee||No||No||No||No||No|
|Bonus for Booking on Site||Yes, 50%||Yes, 25%||Yes, 10%||No||No|
We’re going to take a look at each category and figure out which cards perform the strongest, do a summary of the real miles you get out of the top cards, then offer up our selection for the best travel card of 2016. Also, there will be times when we mention how much the average person spends in a month or year.
The numbers we present are sourced from the Bureau of Labor Statistics’ 2015 stats on how much the average American family spends in a year.
Intro Miles Bonus & Spending Requirements Winners: Chase Sapphire Reserve & BankAmericard Travel Rewards
Nearly every travel credit card gives you some sort of bonus when you sign up. The main perk is free miles deposited to your account if you can spend a certain amount of money in the first three months of having the card.
Don’t forget, though; the “first three months” starts the day you are accepted, not the day you get your card in the mail.
So, who reigns supreme in the introductory miles category? The hands down winner here is the Chase Sapphire Reserve, followed by the Chase Sapphire Preferred and the Capital One Venture:
- Sapphire Reserve: 100,000
- Chase Sapphire Preferred: 50,000
- Capital One Venture: 40,000
- BankAmericard Travel Rewards: 20,000
- Discover it Miles: 0
Don’t get tricked by the Discover it Miles card’s 0 intro miles; it’s a bit unique, and we’ll explain why in a few minutes.
You can rake in each of these miles totals by spending a certain amount of money within the first three months of owning the card. Here are the cards listed in lowest to highest spending requirements:
- BankAmericard Travel Rewards: $1,000
- Capital One Venture: $3,000
- Chase Sapphire Preferred/Reserve: $4,000
- Discover it Miles: Not applicable
As you can see, it’s easy to hit the mark with the BankAmericard. The Capital One and Chase cards require you spend a little more – $4,000. Are those numbers out of reach?
Not according to the Bureau of Labor Statistics (BLS), who says the average American family spends about $3,615 on food, gas, entertainment and miscellaneous spending every three months. With clothing, healthcare, utilities, phone, internet and other expenses thrown in the mix, it’s easy to spend $4,000 in three months.
Each one of these requirements is easily reachable for most American households. But once you have those miles, how far will they take you?
Redemption Values Winners: Chase Sapphire Preferred and Reserve
Every card we researched offered a base miles value of 100 miles per $1 (three cards offer redemption bonuses…more on that in a few minutes). If you convert how many miles you have into dollars, you can then use that cash value to purchase travel through your credit card’s travel portal (a website where you can book travel) or apply it to travel purchases you’ve already made.
The two Chase cards are different than the other three travel cards because, in addition to letting you use the cash value of your miles on travel purchases, you can also transfer the miles you’ve earned to airline and hotel miles/points programs. It’s a straight-up 1-to-1 transfer to the following programs:
- FlyingBlue AirFrance/KLM
- Singapore Airlines KrisFlyer
- British Airways Executive Club
- Southwest Airlines Rapid Rewards
- Virgin Atlantic Flying Club
- United Airlines MileagePlus
- Korean Air SKYPASS
- Marriott Rewards
- Hyatt Gold Passport
- IHG Rewards Club
- The Ritz-Carlton Rewards
If you’re wondering how far one year’s worth of Chase mile will go with these frequent flyer and loyalty programs, check out this great post from The Points Guy, who lays out several different ways you spend your miles.
So far, we’ve only talked about introductory miles offers and how much those miles are worth. Those offers are great, but you’ve got to think about long-term benefits. How many miles do you get when you use your card to pay for all the stuff you buy each month?
Miles on Purchases Winner: Capital One Venture
One of the great things about travel rewards credit cards – and any rewards card, for that matter – is that you rack up miles every time you swipe your card. Sometimes you get one point for every dollar you spend, and sometimes you get more.
A few of these cards give you extra miles in certain categories, which we’ll note. Here’s a ranking of best to worst based on overall miles-per-dollar, not including bonus categories/offers:
- Capital One Venture: 2 miles per dollar
- Discover it Travel/: 1.5 miles per dollar (3 per dollar the first year)
- BankAmericard Travel Rewards: 1.5 miles per dollar
- Chase Sapphire Reserve: 1 mile per dollar (3 per dollar on travel/dining)
- Chase Sapphire Preferred: 1 mile per dollar (2 per dollar on travel/dining)
Capital One Venture is the clear winner here with their double miles for every purchase. The bonuses on the Discover and Chase cards are pretty attractive, though.
But here’s the big question…
How Many Miles Will You Actually Get Each Year Based on Average Spending?
Remember those Bureau of Labor Statistics numbers we mentioned earlier? We’re going to expand on them a bit. We already know that we spend an average of about $3,600 on food, gas, entertainment and miscellaneous spending; that totals out at around $14,400 a year.
We can’t say for sure, based on the BLS’ numbers, how much Americans spend on travel, but we do know they spend about $3,000 a year on eating out as opposed to $4,015 in groceries. That’s an important number since the two Chase cards offer miles bonuses for those purchases.
Here’s a list of other yearly expenses you’d pay with your credit card:
- Utilities – $3,885
- Furniture & other household stuff – $1,818
- Clothes – $1,846
- Education – $1,315
- Health expenses (not including insurance) – $1,365
The grand total for credit card purchases, on average, is about $25,000. With that in mind, here’s how many miles you could potentially get with each card. We’re showing you the miles you get the first and second years, along with an overall total. (Chase bonuses on dining are included:
- Discover it Travel/: 75,000, 37,500 (112,500 after two years)
- Capital One Venture: 50,000, same (100,000)
- BankAmericard Travel Rewards: 37,500, same (75,000)
- Chase Sapphire Reserve: 31,000, same (62,000)
- Chase Sapphire Preferred: 28,000, same (56,000)
After two years, Discover’s 3-to-1 miles top the list, with Capital One in a close second. After three years, you’d get the same miles from the Discover and Capital One (150K), and in year four, the Capital One rewards card surges ahead (200K to 187.5K).
And How Many Miles Can I Get in the First Two Years, Intro Miles Included?
The final piece to this miles puzzle is the overall total of miles you can get after two years, intro offers included. While some cards perform strong in the miles-per-dollar category, other cards with more intro miles make up for their weak miles-to-dollar rewards with big up-front offers.
Here’s a list from most to least:
- Sapphire Reserve: 162,000
- Capital One Venture: 140,000
- Discover it Miles: 112,500
- Chase Sapphire Preferred: 106,000
- BankAmericard Travel Rewards: 95,000
As you can see, the Sapphire Reserve leads the way with the most miles, with the Capital One Venture in second and Discover’s travel rewards card in third.
If you run the numbers out to four years, the Capital One will be 16,000 miles ahead of the Sapphire Reserve. It will take you about nine years to earn more miles on the Discover Card than you do on the Reserve.
Seems like the Sapphire Reserve is the way to go, right? At first glance, yes. But then there’s the annual fee.
Annual Fees Winners: BankAmericard Travel Rewards, Discover it Miles
The Chase Sapphire Preferred Card has the highest annual fees by far of the five travel cards. Here they are, listed from lowest to highest:
- BankAmericard Travel Rewards: $0
- Discover it Miles: $0
- Capital One Venture: $59
- Chase Sapphire Preferred: $95
- Chase Sapphire Reserve: $450
The BankAmericard and Discover are the clear champs in this category.
Yearly APR Winner: Discover it Miles
The APR part of this comparison is pretty straightforward with one exception, which we’ll get to after giving you the best-to-worst list:
- Discover it Miles: 11.24% – 23.24% (0% the first year)
- Capital One Venture: 13.24% – 23.24%
- BankAmericard Travel Rewards: 15.24% – 23.24% (0% the first year)
- Chase Sapphire Preferred and Reserve: 16.24% – 23.24%
If you pay your credit card balance off in full, every month, you won’t have to worry about APRs. If you carry a balance, then, according to a study by Value Penguin, you’re probably carrying around $15,000 in debt across four cards ($3,750 per card).
Let’s assume one of those cards is the Chase Sapphire Preferred or Reserve, and your good credit gets you the lowest rate on the Preferred and Reserve: 16.24%. Here’s how much more interest you’ll pay per month and year as compared to the other cards:
- Discover it Miles: $35/month
- Capital One Venture: $41/month (+$72/year over Discover)
- BankAmericard Travel Rewards: $47/month (+$144/year)
- Chase Sapphire Preferred and Reserve: $50/month (+$180/year)
What’s not included in this list is the BankAmericard’s penalty APR of up to 29.99%, which kicks in indefinitely whenever you make a late payment. That’s a big knock against the card, especially since it’s got some pretty average benefits.
Onto the final judging category…
Redemption Bonuses on Miles Winner: Chase Sapphire Reserve
We’ve knocked the Reserve a bit for its high annual fee and interest rate, but this card rules the redemption bonus category:
- Chase Sapphire Reserve: 50% (50K miles becomes 75K, or $750)
- Chase Sapphire Preferred: 25% (50K miles becomes 62.5K or $625)
- BankAmericard Travel Rewards: 10% (50K miles becomes 55K miles, or $550)
- Capital One Venture/Discover it Miles: 0%
That 50% boost on the Reserve’s miles is a tremendous bonus, and definitely one of the best perks in the entire travel card category. That alone may be enough to push unsure consumers to sign up for it, but we’re not such an easy sell.
Before we get to the winner of the best travel card of 2016, we want to find out what the real value is of the miles you get with the Chase Sapphire Reserve Card.
We’re singling this card out because it’s been hailed as the hottest new card of 2016 by sites like The Points Guy, the Money Wizard, Business Insider, TIME magazine’s Money section and The Motley Fool.
Analyzing the Sapphire Reserve will also show you all the miles-related numbers you have to crunch to figure out how much your “real miles” total.
Real Miles (With All Fees) Included Winner: Chase Sapphire Reserve
Now, remember how we said that choosing the best travel card of 2016 is more than just looking at miles? You have to take a lot of factors into consideration in order to say, for sure, which card offers the best miles.
Chase Sapphire Reserve does offer the best deal on miles, but it’s not as clear-cut as it seems, and you have to take a lot of twists and turns to get to the conclusion. Those twists and turns include annual fees, travel credits, and reservation bonuses. Here’s how we deemed the Sapphire Reserve the best card for miles:
Two-year miles total: 162K (100K bonus w/62K more in purchases)
- Miles cash value $1,620
- Miles cash value if booked through Chase Ultimate Rewards: $2,430
- Annual fee: $900
- Travel credits: Up to $600
- Annual fee minus credits: $300
- Interest paid above Capital One Venture on $3,750 balance: $216
- Annual fee plus interest: $516
- Two-year miles value after it’s all said and done: $1,914
The Chase Sapphire Reserve offers other perks, like a $100 credit to your statement if you sign up for the Global Entry program that helps you get through security faster at airports. You also get free entrance to Priority Pass lounges across the world, as well as free breakfast at luxury hotels.
See Also: Marriott Rewards Premier Card Review
All of this sounds overwhelming, ridiculously lavish, and it is, for people who will use all these benefits. If you’re a traveler who bounces around the country and world several times a year, this card is definitely worth it.
If you’re the average American who doesn’t travel a lot and has limited vacation time, then those extra perks probably won’t come into play and you’re left with the numbers we crunched a few seconds ago.
And here’s another thing to keep in mind…once you get into year two with your Chase Sapphire Reserve, your yearly miles total will average out to about 31,000. If you cash those in through the Ultimate Rewards program, they’re worth 46,500.
After you do the math on the annual fee, interest and travel credit, you’re paying $258 in fees, or 25,800 miles, which leaves you with 20,200, or more than 20,000 less than what you’d accrue with the Capital One Venture after you pay its annual fee.
The Best Travel Card of 2016 Winners: Chase Sapphire Reserve and Capital One Venture Card
For us, deciding which travel card held the title of 2016’s best took a lot more math than what you’d find on other sites. This is part of the deal when you try and cut through all the noise and clutter.
We decided on a tie because, while the Chase Sapphire Reserve offers you the best benefits up front, the Capital One Venture card is the best choice in the long run, even when you throw in all the perks associated with the Sapphire Reserve.
Sure, those who get the Reserve will have access to upgrades at luxury hotels and access to airport lounges, but, if the numbers are right, the average American consumer will not travel enough to take advantage of those extra perks.
The Capital One Venture has no annual fee the first year and 2:1 miles on everything you purchase. It’s a simple, low-maintenance card with an affordable yearly fee of $59 and the second lowest APR of the cards we analyzed.
If you want a quick deal with tons of miles, go for the Sapphire Reserve. However, if you’re in it for the long-term, the Capital One Venture is by far the best card for collecting miles for travel purchases.
Ready for more of our in-depth analysis of travel cards? Read our detailed guide on the Best Airline Travel Card of 2016.
More on Credit Cards:
- 7 Credit Card Hacks You Can Use to Raise Your Credit Scores & Reap Rewards
- Good Credit Scores and How to Get There: A Detailed Guide For Moving From Average to All-Star
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