Capital One Venture Rewards Credit Card
In 2010, Money magazine named the Capital One Venture card the best program for racking up airline miles. But while this card—like the others mentioned in this list—can help you get to where you want to go, the Capital One Venture card is the only one that will take care of you once you arrive. If you're traveling outside the United States, you can use this card without accruing any foreign transaction fees. And because Capital One is a Visa, you can also cash in on extras like travel accident insurance and lost luggage reimbursement. As far as points go, the Capital One Venture card is straightforward: You will earn two miles for every dollar, and if you charge at least $1,000 within the first three months, you'll earn 10,000 bonus travel miles. Points can be applied toward hotel rooms, flights, and even car rentals, and they never expire. Keep in mind that the annual $59 fee is waived during the first year, although you will have an 11.9 to 19.9 variable APR.
To skip the annual fee, consider the Capital One VentureOne card, which offers 1.25 miles per every dollar spent. You'll also be eligible for the 10,000 bonus miles if you spend $1,000 in the first three months. You can use your miles to fly for free without having to worry about blackout dates. Miles can also be redeemed for hotel stays and car rentals.
[See the Secrets to Successful Travel Bidding.]
PenFed Premium Travel Rewards American Express Card
When it comes to earning rewards, you can't do better than the PenFed Premium Travel Rewards American Express card. Not only will you earn points to put toward your next vacation, you'll actually earn extra points for traveling. Every flight booked with a PenFed card earns a whopping five points per dollar. And if you charge $650 within the first three months of activation, you'll automatically receive 20,000 bonus points (enough for a round-trip flight to many domestic destinations). Members of the PenFed Premium Travel Rewards program also receive automatic insurance for travel accidents and rental cars, as well as complimentary roadside assistance if they use their card to make reservations. Program members can also earn room upgrades and free breakfasts at participating hotels, the use of a complimentary rental car for one day at participating car rental agencies, special savings on airfare, and two free visits to more than 600 airport lounges throughout the world.
Here's the catch: To join this program, you must be a member or family member of the U.S. Military or a military association, a U.S. government employee, or an employee or volunteer at the American Red Cross. Other applicants can obtain a PenFed Premium Travel Rewards card by becoming a member of the National Military Family Association or Voices for America's Troops. You will be asked for a one-time donation of $15 or $20 (depending on the organization), and you do not have to retain membership to remain a PenFed customer. There is no annual fee for the credit card, and the introductory APR is a miniscule 4.99 for the first two years (after which you can expect it to rise to 13.99).
Of course, before racking up credit card bills while chasing rewards points, you'll want to make sure you can pay off your bill each month. Building up debt and interest payments will only make your travel dreams harder to afford.
Corrected 10/21/11: A previous version of this story erroneously stated that Capital One miles could only be redeemed for airfare. They can, in fact, be redeemed for a variety of travel related purchases, including hotel rooms and car rentals.