Travel credit cards can be one of the best ways to lower the cost of travel, whether you're taking a trip to visit family in another state or boarding a plane for a luxurious vacation overseas. Regardless if you collect airline miles, hotel points or flexible issuer-specific currency, they all perform the same function of making your future trip more affordable.

However, many travel rewards credit cards come with annual fees, ranging from a sensible $95 to a staggering $695 per year. Not only that, but travel rewards take time to understand, and you might be left wondering "Are travel credit cards worth it?"

What is a travel credit card?

Travel credit cards come in many variations, but the main three categories include:

Co-branded airline credit cards.

Co-branded hotel credit cards.

Financial institution rewards cards.

Airline credit cards

Airline credit cards include options like the Citi® / AAdvantage® Platinum Select® World Elite Mastercard®, the Delta SkyMiles® Gold American Express Card and the United℠ Explorer Card. These cards, and other airline-related options, earn miles in the respective airline’s loyalty program, which you can redeem for a flight when you have enough piled up. Terms apply.

Hotel credit cards

Hotel credit cards, such as the IHG® One Rewards Premier Credit Card, the Hilton Honors American Express Surpass® Card and the Marriott Bonvoy Boundless® Credit Card, perform a similar function and award you with hotel points redeemable for free nights. Terms apply.

General travel cards

You might also have heard about general travel rewards cards, such as The Platinum Card® from American Express, the Chase Sapphire Preferred® Card or the Capital One Venture X Rewards Credit Card. These cards earn flexible points that can be transferred to an array of travel partners, including airlines and hotels, redeemed for travel via a respective issuer's travel portal, or even used as cash back for statement credits. Terms apply.

No matter which travel rewards card you pick, learning how these rewards work will help you maximize their full potential.

Are travel cards worth an annual fee?

Although a downside, many travel rewards cards come with annual membership fees. Some are reasonable and cost $95 to renew every year. Others charge as much as $695 per year, as The Platinum Card® from American Express does (it could still be worth it for the right traveler, though). Terms apply.

The upside of travel rewards cards is they often come with benefits, statement credits and travel protections, which can offset the annual fees.

For example, Chase Sapphire Reserve® comes with a $550 annual fee. To a casual traveler, the price tag can seem steep. However, the card comes with an easy-to-use annual $300 credit good toward travel purchases. It also comes with up to $60 in DoorDash statement credits (through December 2024), complimentary Priority Pass Select membership and a Global Entry/TSA PreCheck/NEXUS credit every four years, as well as trip delay insurance, baggage delay reimbursement, auto collision damage waiver on rental cars and roadside assistance.

These perks alone can offset the amount to hold the card every year, plus you get to earn points toward travel by making everyday purchases with the card. To help you get there faster, Chase Sapphire Reserve® 10x total points on hotel stays and car rentals and 5x total points on air travel purchased through Ultimate RewardsⓇ.