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Credit card travel perks -- are they worth it?

Travel rewards cards can help you earn free flights or hotel stays, and they usually come with perks such as free checked bags, priority boarding, travel insurance and rental car insurance. But you need to weigh the value of rewards and perks against card fees and program restrictions.

Whether it's the holidays, spring break or summer vacation time, traveling to exciting destinations is always fun, but it can also take a toll on your pocket book.

Travel rewards cards can help you earn free flights or hotel stays. Other card perks help cut costs too -- free checked baggage is the most popular, according to a CreditCards.com poll. Many cards also come with rental car insurance, travel insurance, priority boarding and even free companion tickets on airlines.

But you need to weigh the value of the rewards and perks against card fees and program restrictions – such as blackout dates.

"You will see on airline sites or credit issuers sites...points to get to
this destination or that destination, but it doesn't mean its carte blanche for everywhere and certainly not for all times of the year or even all times of the day, so you may be limited on your choices," says Todd Mark of Consumer Credit Counseling Service of Greater Dallas.

Of course, watching reward points increase every month only makes sense if you pay off your credit card balance every month. Rewards cards tend to charge higher interest than other types of cards, and that interest cost may cancel out the value of any rewards you get.

"If you are carrying a balance, the least of your worries is how many miles you are getting and when you can you redeem your flights," says Mark.

So before you apply for another enticing airline or travel rewards
credit card, ask yourself a few questions about your travel habits:
How many trips will I take in a year for pleasure and what are the approximate costs?
Will I always check a bag when I travel? Estimate those costs.
How many cars will I pay to rent in a year?
How much will I pay in fees and interest on this card in a year?

These questions will help you determine the true out of pocket cost versus the possible rewards you could actually redeem.

"In summary, I don’t want people to open credit cards just for frequent flyer miles or points," says Mark. "What is best for you as far as annual fees, applications fees, what's the best limit, lowest interest rates, best grace periods, what is best for your financial goals? That's what we want people to search for."

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