Traveling can be expensive, but it can also be very rewarding – literally! Tons of banks offer rewards for those individuals who are regularly using their cards for travel transactions. These rewards come in various different types ranging from discounted rates, free accommodation, rental car insurance, and free travel miles. In this article, we will talk about cash-back credit cards and how they can be a great financial tool for those who regularly go out and travel. On that note, if you’re interested in getting a cashback credit card to specifically earn travel-related rewards, you should definitely check out this Chase Freedom Unlimited review. Chase is among the best options for cash-back credit cards on the market right now because they offer market-topping cash-back rates as well as plenty of travel benefits.
What is a cash-back credit card anyway?
Most of you are already familiar with what a credit card is and how it works. Well, cash-back credit cards are just simply a particular type of credit card that gives cardholders a chance to regain a portion of their spending. This cash-back system works by applying a certain percentage to your expenditures and turning it into points. Let’s say you’re a cardholder of a certain cash-back credit card that offers you a 5% cashback. This means that you will get 5% of the value of your purchases back on all your purchase transactions. Note that this rate will vary across different banks and can also vary depending on the type of transaction.
What makes a cash-back credit card great for regular travelers?
Most, if not all, banks that offer cash-back credit cards lean more towards offering higher cash-back rates for travel-related transactions. This is because the average spending on travel-related transactions is comparatively higher as compared to other types of transactions, like restaurant spending, grocery, drugstore, and other types of purchase transactions. Because banks understand that the amount of public spending is higher with travel-related transactions, they want to target their cash-back programs to this specific area, which can lead to better incentives for those who regularly travel.
What are the travel-specific benefits of cash-back credit cards?
- Trip cancellation/interruption insurance – one of the most frustrating experiences when traveling is cancellations and interruptions. In most cases, the fees and charges that you pay are non-refundable and non-transferable, which means that you will have to wait to be rebooked and rescheduled. The advantage of having cash-back credit cards is that some banks allow you to recover the amount you paid through insurance. This means that you won’t have to deal with a compromised travel plan in case something goes wrong on the part of the travel company or airline.
- Rental car insurance – a lot of frequent travelers usually rent a car on their arrival destination. Another advantage of having cash-back credit cards is that they usually offer an extended insurance policy on the car that you have rented. This can provide you with peace of mind, which can be invaluable when traveling across the country and all the more when traveling abroad.
- Purchase protection – usually, when we travel, we cannot help but buy things to keep as souvenirs or remembrances. In some cases, these purchases can be quite expensive and valuable. Naturally, we would want to protect our purchases against any sort of damage or theft. Luckily, cash-back credit cards also offer purchase protection for all types of purchases. This can be very helpful, especially on purchases including electronics like smartphones and laptops.
- Extended warranty – In relation to purchasing protection, another layer of benefit that cash-back credit cards provide is an extended warranty. This is obviously extremely advantageous, no matter if you’re a regular traveler or not. Having an extended warranty claim attached to your purchases means that you’ll have a sense of security and peace of mind with the things that you have bought long after you initially purchased them. This will help you maximize your purchases at the end of the day.