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Best Travel Rewards Credit Card

vacation calendarThere are lots of travel rewards credit cards on the market, but there’s usually some hitch that makes each of them a deal breaker: The annual fee is too high, the rewards aren’t worth the price, the APR is too steep or you get charged a fee when you use the card overseas.

But there is a card that has none of those problems, which is why it’s by far the best in class in the travel rewards category.

picture of the PenFed Amex Premium Travel Rewards Card

I’m talking about the PenFed Premium Travel Rewards American Express Card.

It has great rewards, a generous introductory bonus, low APRs and almost no fees.

You earn five points on airline purchases and one point on all other purchases. By way of comparison, Capital One’s popular Venture card gives you two points on all purchases, but there’s a $59 annual fee after the first year.

Of course, a fairer comparison would be with Capital One’s VentureOne Rewards card, which has no annual fee. But with that card, you only earn 1.25 miles per dollar.

So if you travel frequently, PenFed beats Capital One hands down, either Venture or VentureOne. It also beats most other cards, annual fee or not.

PenFed’s introductory bonus is a little less generous than on either Venture card, but not by much.

You get 20,000 points when you spend $2,500 during the first three months, which is worth $200 in tickets on any airline. With Capital One, you only have to spend $2,000 to earn 20,000 bonus miles.

Other cards have more generous intro bonuses, but they usually charge an annual fee.

When it comes to APRs, there’s no contest.

With PenFed, the rate is a low 9.99%, one of the lowest in the business. In addition, PenFed offers 0% for 18 months on balance transfers made before March 31, 2014. There is a 3% balance transfer fee, although it’s capped at $250.

Capital One’s lowest rate is 11.9% on the VentureOne card (13.9% on Venture), although there is a 0% APR on purchases for the first year (there’s no such offer on Venture). Neither Capital One card offers a balance transfer promotional deal.

The one thing PenFed and Capital One do agree on is foreign transaction fees: Neither one charges them. But many popular travel rewards cards do.

In addition to all of the benefits I’ve already mentioned, the PenFed card also comes with complimentary 24-hour concierge service. You also get two free Lounge Club visits at airports around the world after you spend $15,000 on the card in a calendar year. Many cards that offer those perks charge hefty annual fees, including many offered by American Express.

Best of credit card series

More in the series:

Best Small Business Credit Card

Best Credit Card For Everyday Use

Best Credit Card For Balance Transfers

PenFed has another credit card that made my best-in-class list, namely the PenFed Platinum Cash Rewards Visa Card in the gasoline rewards category. But that shouldn’t be a surprise.

You need to be a member of the Pentagon Federal Credit Union to be eligible to get these cards, but it’s simple to join. PenFed is open to most members of the U.S. military and their families, retired or active, and to employees or volunteers of the American Red Cross. You can also join by becoming a member of one of two charities that support the military and their families. There’s a nominal ($15-$20) fee to join either, but it’s well worth it.

Compare PenFed’s cards with the many other credit cards in our database.

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