Travel credit cards deliver valuable perks and bonuses to frequent business or leisure travelers. They’re also a must-have when you’re on the road, making your way through airports, or arranging hotel stays. However, if you have bad credit, your card options will be limited. It can be difficult to find a card that offers decent terms while still providing enough utility to be useful for traveling. Difficult, yes, but not impossible.
Some specialized providers offer travel credit cards to consumers with damaged credit ratings. The best of these cards deliver rewards that compare favorably to standard travel cards. They aren’t that different than those available to people with strong credit score. These options offer reasonable terms that help keep your costs to a minimum. Here’s a look at four of the market’s best such offerings.
SKYPASS Secured Visa
Like many major airlines, Korean Air operates a customer loyalty rewards program. It is known as SKYPASS, and it offers an excellent secured credit card option. Available to people with damaged credit ratings, the SKYPASS Secured Visa delivers awesome perks to reward travel spending. Cardholders get 5,000 bonus points the first time they make a purchase, along with an additional point for every other dollar you spend. It also provides travel insurance coverage for up to $250,000. You’ll automatically get 1,000 bonus miles at renewal time if you choose to continue using the card.
Other perks include fraud protection, a helpful set of assistance services in case of travel emergencies, and miles that never expire. If you travel with Korean Air, you will also enjoy other incredible rewards when you use the card to make in-flight purchases. All this comes for just a $50 annual fee, and the variable interest rate maxes out at an appealing 18.49%.
Best Western Secured Card
Valid anywhere you could use a Mastercard, the Best Western secured credit card is a leading option for travelers who prefer domestic branding. Headquartered in Phoenix, Arizona, Best Western owns and operates upmarket hotels around the world. Cardholders get three points for every dollar they spend on a Best Western stay.
The card also delivers one reward point for every one dollar you spend elsewhere, along with 5,000 welcome points the first time you use the card to complete a purchase. Since it’s secured, it’s available even to consumers with heavily damaged credit. The annual fee is just $40, which works out to $3.33 per month. A fixed annual percentage interest rate of 21.24% applies to all purchases. That’s easily on the lower end of the range typically offered to poor-credit consumers.
Aeromexico Visa Secured Credit Card
Aeromexico’s secured Visa card delivers credit limits ranging from $300 up to $5,000. You must offer a deposit equal to your credit limit up front. However, it accumulates interest the whole time and your payment is fully insured by the Federal Deposit Insurance Corporation (FDIC). The card’s annual fee is a very affordable $25. You will get great travel rewards including accident insurance, rental car collision insurance, and emergency assistance for travelers. You can also set up automatic bill payments, and you’re fully covered with comprehensive fraud protection.
Additional bonuses include 3,500 welcome points when you make your first purchase, two points for every dollar you spend at gas stations and supermarkets, and one point for every dollar you spend elsewhere. If you ever fly with Aeromexico, you’ll also have your baggage fees waived. That saving will easily cover the card’s annual fee even if you only fly with the airline once a year. Even better, Aeromexico will offer to upgrade you to an unsecured card if you improve your credit score sufficiently within a year of opening your account.
LATAM Visa Secured Card
A major travel provider in South America, LATAM Airlines also operates in North America, Europe, Australia, and parts of Africa and Asia. LATAM offers a Visa-branded secured credit card to consumers with low credit scores. You’ll have to make a deposit, with the amount of the deposit setting your credit limit. However, your deposit earns interest and will be repaid in full when you close the account or qualify for an unsecured card.
Backed by U.S. Bank, the LATAM Visa secured travel credit card automatically provides collision damage waivers on car rentals, as well as $500,000 in travel insurance coverage. Cardholders get 5,000 points with their first purchase, and earn further points at a 1:1 clip for every dollar spent. You will also get 10% off LATAM Airlines flights (up to a maximum of $500 in savings per year). Even better, the annual fee is only $25 and LATAM Airlines will waive it for your first year. The one downside is a higher variable interest rate, which peaks at 25.24%. This is a little higher than many of the other cards we were able to find.
Alternatives to Secured Credit Cards
If you’re really in a bind, you can also consider prepaid travel cards. These cards are branded by major credit companies like Visa and Mastercard, ensuring they’ll be accepted just about anywhere. They usually offer you the opportunity to lock in foreign exchange rates. That can be helpful if you’re traveling to a destination for an extended period of time and want some insurance against currency valuation fluctuations. However, the down side is that you have to cover the entire sum extended by the card with an up-front payment. That can be difficult to manage if you’re talking about hundreds or thousands of dollars.
Generally speaking, finance insiders encourage people with poor credit to do their best to get unsecured cards, which don’t tie up their cash reserves. This helps make sure you have more money on hand to make your payments, preventing further damage to your credit rating. Secured cards are the next-best option though, followed by branded store and airline cards. Prepaid cards usually rank last, since they don’t do much to help improve your credit score.