Travel credit cards are essential companions for frequent travelers, whether for business or leisure. They offer valuable perks and bonuses, making them indispensable while navigating airports or booking hotel stays. However, individuals with poor credit may find their card options limited. It can be challenging to find a card with favorable terms that still provides adequate utility for travel. Despite this challenge, it’s not an insurmountable one.
Some specialized providers cater to consumers with less-than-ideal credit ratings by offering travel credit cards. The top offerings in this category boast rewards comparable to standard travel cards, despite being tailored for individuals with damaged credit. These cards come with reasonable terms that help minimize costs. Let’s explore four of the best options available in this niche market.
SKYPASS Secured Visa
Korean Air offers the SKYPASS customer loyalty rewards program, accompanied by a noteworthy secured credit card option. The SKYPASS Secured Visa is accessible to individuals with less-than-ideal credit scores and presents enticing perks tailored to travel spending. Upon making their first purchase, cardholders receive a generous 5,000 bonus points, supplemented by one additional point for every dollar spent thereafter. The card also extends travel insurance coverage of up to $250,000 and rewards users with 1,000 bonus miles upon renewal.
Additional benefits include fraud protection, comprehensive travel emergency assistance services, and miles that never expire. Furthermore, cardholders enjoy exclusive rewards for in-flight purchases when flying with Korean Air. Despite its remarkable offerings, the card comes with a modest $50 annual fee and a variable interest rate capped at an appealing 18.49%.
Best Western Secured Card
The Best Western secured credit card stands out as a top choice for travelers who prefer domestically recognized brands. Based in Phoenix, Arizona, Best Western operates upscale hotels worldwide. Cardholders earn three points for every dollar spent on Best Western stays and one point for every dollar spent elsewhere. Additionally, users receive a welcome bonus of 5,000 points upon their first purchase with the card. Even consumers with severely damaged credit can qualify for this secured card. With a modest annual fee of $40, equivalent to $3.33 per month, and a fixed annual percentage interest rate of 21.24% for all purchases, it offers competitive terms within the spectrum typically available to individuals with poor credit.
Aeromexico Visa Secured Credit Card
Aeromexico’s secured Visa card offers credit limits ranging from $300 to $5,000, with an initial deposit matching the credit limit required. The deposit is fully insured by the Federal Deposit Insurance Corporation (FDIC) and accrues interest over time. With an affordable annual fee of just $25, cardholders enjoy comprehensive travel rewards, including accident insurance, rental car collision insurance, and emergency assistance for travelers. The card also facilitates automatic bill payments and provides robust fraud protection.
Upon the first purchase, users receive a generous welcome bonus of 3,500 points. Additionally, they earn two points for every dollar spent at gas stations and supermarkets, and one point for each dollar spent elsewhere. Aeromexico passengers benefit from waived baggage fees, offering substantial savings that can offset the card’s annual fee, even with just one flight annually.
Moreover, Aeromexico extends an offer to upgrade users to an unsecured card if they demonstrate significant credit score improvement within a year of opening their account.
LATAM Visa Secured Card
LATAM Airlines, a prominent travel provider in South America with global operations, extends its reach to North America, Europe, Australia, and parts of Africa and Asia. For consumers with low credit scores, LATAM offers a Visa-branded secured credit card, where a deposit determines the credit limit. However, the deposited amount earns interest and is fully reimbursed upon account closure or qualification for an unsecured card.
Supported by U.S. Bank, the LATAM Visa secured travel credit card features automatic collision damage waivers on car rentals and provides $500,000 in travel insurance coverage. Cardholders receive 5,000 points upon their first purchase and earn points at a 1:1 ratio for every dollar spent. Additionally, users enjoy a 10% discount on LATAM Airlines flights (up to a maximum of $500 in savings per year). Furthermore, the annual fee is just $25, with LATAM Airlines waiving it for the first year. However, the variable interest rate is slightly higher, peaking at 25.24%, compared to other available options.
Alternatives to Secured Credit Cards
In dire situations, prepaid travel cards can be an option worth considering. These cards, endorsed by major credit companies like Visa and Mastercard, boast widespread acceptance. They often allow users to secure foreign exchange rates, offering a buffer against currency value fluctuations during extended travels. However, the caveat is that users must prepay the entire card balance upfront, which can pose challenges when dealing with substantial sums.
Generally, financial experts advise individuals with poor credit to strive for unsecured cards, as they don’t tie up liquid assets. This ensures more funds are available to meet payment obligations, thus averting further damage to credit scores. Secured cards rank as the next-best alternative, followed by store and airline-branded cards. Prepaid cards typically fall to the bottom of the list, as they do little to contribute to credit score improvement.