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Ever since the pandemic wreaked havoc on the travel industry and car companies like Hertz and Avis sold off their fleets to avoid bankruptcy, rental cars are harder to come by than ever.
That's not great news if you, like many Americans, are looking to take a summer vacation. Gone are promotions advertising $9.99-per-day economy rentals. Currently, a Kayak.com search for car rentals in Denver for the first week of June start at $149 per day, turning what you may have hoped would be an easy, week-long joy ride into a $1,000+ expense.
Unfortunately, there's not much that having a credit card with car rental insurance can do to lower rental car costs, other than help pay if the car gets damaged. However, you can use travel rewards and/or cash back to make your vacation more affordable.
Below are some of our top-rated travel cards that let you redeem your rewards for car rentals. We pulled these selections from our best travel credit cards list. With each of the cards ahead, you can earn hundreds in travel rewards within your first year of account opening that you can then use to offset the cost of renting a vehicle. Depending on your spending habits, some of these cards can help you earn up to $2,000 over the next five years according to our methodology.
Before you sign up for a new card, it's important to make sure you can pay off your balance on time and in full each month, since many of these cards have high interest rates.
Credit cards that can save you money on car rentals
Best for earning rewards on rentals
Capital One® Venture® Rewards Credit Card
Information about the Capital One® Venture® Rewards Credit Card has been collected independently by Select and has not been reviewed or provided by the issuer of the card prior to publication.
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Rewards
5X miles on hotel and rental cars booked through Capital One Travel℠, 2X miles per dollar on every other purchase
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Welcome bonus
Earn up to 100,000 miles: 50,000 bonus miles after spending $3,000 on purchases within three months of account opening; plus an additional 50,000 bonus miles after spending $20,000 on purchases within 12 months of account opening.
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Annual fee
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Intro APR
N/A for purchases and balance transfers
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Regular APR
17.24% to 24.49% variable on purchases and balance transfers
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Balance transfer fee
3% for promotional APR offers; none for balances transferred at regular APR
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Foreign transaction fee
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Credit needed
Excellent/Good
Pros
- 5X miles on hotel and rental cars booked through Capital One Travel℠
- Global Entry or TSA PreCheck application fee credit up to $100 every 4 years
Cons
- No introductory APR
- There’s a $95 annual fee
- Estimated rewards earned after 1 year: $1,466
- Estimated rewards earned after 5 years: $2,931
Rewards totals incorporate the miles earned from the welcome bonus
Best welcome bonus
Chase Sapphire Preferred®
On Chase's secure site
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Rewards
5X points on Lyft rides through March 2022, 2X points on travel and dining worldwide, 1X points on all other purchases
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Welcome bonus
Earn 80,000 bonus points after spending $4,000 on purchases in the first 3 months from account opening. Plus earn up to $50 in statement credits towards grocery store purchases within your first year of account opening
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Annual fee
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Intro APR
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Regular APR
15.99% to 22.99% variable on purchases and balance transfers
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Balance transfer fee
Either $5 or 5% of the amount of each transfer, whichever is greater
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Foreign transaction fee
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Credit needed
Excellent/Good
Pros
- Points are worth 25% more when redeemed for travel via Chase Ultimate Rewards®
- Transfer points to leading frequent travel programs at a 1:1 rate, including: IHG® Rewards Club, Marriott Bonvoy™ and World of Hyatt®
- Free DashPass subscription for a minimum of a year when you activate by December 31, 2021
- Travel protections include: auto rental collision damage waiver, baggage delay insurance and trip delay reimbursement
- No fee charged on purchases made outside the U.S.
Cons
- $95 annual fee
- No hotel-specific perks or credits
- No introductory 0% APR
- Estimated rewards earned after 1 year: $1,306
- Estimated rewards earned after 5 years: $2,328
Rewards totals incorporate the points earned from the welcome bonus
Best for luxury travel
Chase Sapphire Reserve®
On Chase's secure site
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Rewards
10X points on Lyft rides through March 2022, 3X points on travel worldwide (immediately after earning your $300 annual travel credit), 3X points on dining at restaurants including eligible delivery services, takeout and dining out, 1X point per $1 on all other purchases
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Welcome bonus
Earn 60,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening
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Annual fee
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Intro APR
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Regular APR
16.99% to 23.99% variable
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Balance transfer fee
5%, minimum $5
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Foreign transaction fee
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Credit needed
Pros
- $300 annual travel credit for travel purchases
- Global Entry or TSA PreCheck application fee credit up to $100 every four years
- Priority Pass™ Select lounge access at 1,000+ VIP lounges in over 500 cities worldwide
- Points are worth 50% more when redeemed for travel via Chase Ultimate Rewards®
- Special benefits at The Luxury Hotel & Resort Collection
- Free DashPass subscription for a minimum of a year when you activate by December 31, 2021
- $60 DoorDash credit in 2021
- Complimentary year of Lyft Pink membership
Cons
- High $550 annual fee, but it can be offset by taking advantage of all the card’s perks
- No introductory APR
- Estimated rewards earned after 1 year: $1,469
- Estimated rewards earned after 5 years: $3,346
Rewards totals incorporate the points earned from the welcome bonus
Best for earning cash back
TD First Class℠ Visa Signature® Credit Card
Information about the TD First Class℠ Visa Signature® Credit Card has been collected independently by CNBC and has not been reviewed or provided by the issuer of the card prior to publication.
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Rewards
3X miles earned on every $1 spent on travel and dining, plus 1X mile earned on every $1 spent on everything else
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Welcome bonus
25,000 miles when you spend $3,000 within the first 6 billing cycles
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Annual fee
$89, waived for the first year
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Intro APR
0% APR for the first 12 billing cycles on balance transfers
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Regular APR
14.99% variable
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Balance transfer fee
$5 or 3% of transfer, whichever is greater
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Foreign transaction fee
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Credit needed
Pros
- 3X miles on every $1 spent on travel and dining
- 25,000 miles when you spend $3,000 within the first 6 billing cycles
- 0% APR during the first 12 billing cycles on balance transfers
- No fee charged on purchases made outside the U.S.
Cons
- No additional travel credits, like TSA PreCheck/Global Entry application credit
- Points aren’t worth more if you book travel through a special portal
- Estimated rewards earned after 1 year: $752
- Estimated rewards earned after 5 years: $2,403
Rewards totals incorporate the points earned from the welcome bonus
Our methodology
To determine which cards will put the most money back in your pocket, Select evaluated 35 popular travel credit cards offered by major banks, financial companies and credit unions that allow anyone to join. We compared each card on a range of features, including travel rewards (points and miles), annual fee, welcome bonus, introductory and standard APR, one-time perks, annual perks, redemption rates, as well as factors such as required credit and customer reviews when available.
Select teamed up with location intelligence firm Esri. The company's data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.
Esri's data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.
We then estimated how much the average consumer would redeem over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee and assume that you are paying your credit card balance on time and in full each month so as not to incur interest charges.
It's important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)
Our final picks are weighted heavily toward the highest five-year returns, since it's generally wise to hold onto a credit card for years. This method also avoids giving an unfair advantage to cards with large welcome bonuses.
While the five-year estimates we've included are derived from a budget similar to the average American's spending, you may earn a higher or lower return depending on your travel habits.
Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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