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A hotel credit card is a type of credit card that’s cobranded with a major hotel group. They work just like any other credit card, and you can use them to make purchases anywhere that a particular credit card network is accepted. The main difference is that when you use the card for purchases, you earn points, which allow you to save money on hotels. You can redeem those points for free hotel stays and additional perks with that hotel group.

Deciding which hotel credit card is right for you entails more than just finding a hotel you like. To know if a hotel credit card is worth it, you’ll want to know what to look for in a hotel credit card and the pros and cons involved, as well as how redemption rates can vary.

What Are Hotel Credit Cards?

As mentioned, a hotel credit card is a type of card that’s offered through a partnership between a credit card issuer, such as a bank or credit card network (like Mastercard or Visa), and a major hotel. Hotel credit cards are considered open-loop cards, which means you can use the card to make purchases anywhere that type of card is accepted. This is in contrast to a private label credit card, which you can only use at a particular store.

Hotel credit cards feature a rewards program, which allows you to earn points for purchases made with the card. You can use the points you earn toward stays at hotels, allowing you to save money on hotels. These cards may also come with automatic elite status, which might include free wifi, extended checkout, and complimentary breakfast.

Keep in mind that hotel credit cards are different from a hotel loyalty program, which incentivizes guests to stay at hotels. In return for their stays, guests can earn rewards like free nights and complimentary meals. Hotel credit cards allow you to earn rewards more quickly by making purchases on your card.

How Do Hotel Credit Cards Work?

Hotel credit cards operate how credit cards work usually. You’re given a credit limit and can use your card to make purchases to that limit. You can pay your balance in full each month, or you can opt to pay it back over time, though this will lead to interest charges accruing.

The main draw of hotel credit cards is that there’s a rewards program and various extra perks offered. You rack up credit card points for using your card and then can redeem them for free hotel rooms. Think of it like the hotel version of an airline credit card, which allows you to earn credit card miles for flights.

Each hotel credit card has a different rewards program and awards points at different rates. The amount you earn hinges on the hotel’s rewards policy as well as your card’s tier. That’s because the same card can have different tiers, with higher tiers enabling you to earn rewards faster.

What to Look for in a Hotel Credit Card

With so many hotel credit cards to choose from, here’s what you’ll want to pay close attention to when researching and comparing your options:

•   Hotel brand: As hotel credit cards only allow you to redeem credit card points for that particular hotel or group of hotels, which major hotel group the card is cobranded with is important. Where are their hotels located, and how many hotels are there? Can you redeem points for any of their hotels? Are there blackout dates?

•   Rewards program: You’ll want to look at the earning rate for the rewards program. Also investigate where there other perks, such as automatic upgrades, complimentary wifi and breakfast, and extended checkout. Some hotel credit cards even feature an anniversary bonus.

•   Sign-up bonus: Some cards feature an attractive sign-up bonus. For instance, you might earn a free night’s stay for simply signing up or points if you spend a certain amount within the first few months after opening your account.

•   Additional perks: Beyond the basics, a hotel credit card might offer extras like credit card travel insurance and airport lounge access.

•   Credit card tier: As mentioned, a single hotel credit card might have several tiers to choose from. The higher the tier, the quicker you can earn points, and the more opportunities to earn points. Plus, higher tiers usually come with more perks. However, higher-tier credit cards also can be harder to qualify for. You might need a stronger credit score, higher income, and lower debt-to-income ratio than you would to qualify for a lower-tier card. Plus, a higher annual fee might apply.

•   Annual percentage rate (APR): If you plan on carrying a balance on your card, it’s particularly important to understand the APR of the card. Further, look at the terms and fees. What will you be charged for a late payment? Are there foreign transaction fees? Some credit cards, for example, charge no foreign transaction fees.

•   Fees: If the hotel credit card comes with an annual fee, will you use it enough to offset the fee? Take the time to crunch the numbers before committing.

Advantages of Hotel Credit Cards

When weighing whether hotel credit cards are worth it, consider some of these potential advantages:

•   Faster rewards earning: Compared to a hotel’s loyalty program, you’ll likely earn points faster with a hotel credit card. Plus, with a hotel credit card, there are usually more opportunities to earn rewards, as you rack up points whenever you purchase something with your card. You might also earn additional points for booking at the hotel using your card.

•   Additional perks: As mentioned, a hotel credit card might come with added benefits, such as free internet, extended checkout, complimentary breakfast, and room upgrades.

•   Travel-related benefits: You might be able to take advantage of trip protection, credits that you can use to pay for room service or spa treatments, and credit toward Global Entry or TSA PreCheck®.

•   Automatic upgrade to elite status: If a card offers an automatic upgrade to their hotel program’s elite status, you might be privy to room upgrades, credits toward room service, or concierge services.

Recommended: What Is an International Credit Card?

Disadvantages of Hotel Credit Cards

Here are some downsides of hotel credit cards to consider:

•   Limited uses: Because hotel credit cards are cobranded with a specific hotel brand, you can only use the rewards and perks when you stay at that particular hotel. Plus, there might be blackout dates, meaning you can’t use your benefits on those particular days, which are usually during times of high demand.

•   Possible annual fee: A card might come with an annual fee. The higher the tier, the higher the annual fee, if one applies. However, there’s a chance you could dodge this by focusing your search on no annual fee credit cards.

Recommended: What Is an International Credit Card?

Who Should Open a Hotel Credit Card?

If you’re someone who travels frequently and enjoys staying at major hotels as opposed to an Airbnb, then a hotel credit card could be a good idea. You’ll want to make sure you use the card enough to rack up points accordingly, and understand all the perks so you can make the most of them.

If the card comes with an annual fee, determine first whether the cash value of your points is enough to justify the cost. This could influence whether opening a hotel credit card makes sense.

Recommended: Credit Card Miles vs. Cash Back

How Redemptions and Earning Rates Vary on Hotel Credit Cards

The “earn and burn” rates for this category of rewards credit cards can vary greatly. Some offer two to five times or even higher the usual number of points when booking a stay at the hotel brand affiliated with the card. Plus, higher-tiered cards typically make it easier for you to earn points more quickly, perhaps with sign-up bonuses.

As no two hotel credit cards are alike, before deciding on a hotel credit card, look carefully at how you can earn points and how many points you can earn for certain types of purchases. By looking into how you can redeem your rewards and if there are any restrictions, you can also figure out how to make the most of your card.

How to Find a Hotel Credit Card

You might receive a hotel credit card offer via mail or in your email inbox. But your options aren’t limited to offers you’re preapproved for. Rather, the easiest way to find a hotel credit card is by way of an internet search. You can start by searching for your favorite hotel brands to see if they have a cobranded credit card available.

From there, you’ll want to narrow it down to a few options and compare how those hotel credit cards stack up against one another.

The Takeaway

Hotel credit cards are a category of rewards credit cards that allow you to earn hotel points through your spending on the card. You can then use those points toward hotel stays and other perks at the hotel chain affiliated with the card. When shopping around, you’ll find that there are a slew of options for hotel credit cards. It’s important to review details like the card’s rewards programs and other perks, as well as the APR and fees involved.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Does my marital status matter in a hotel credit card?

By law, credit card companies cannot consider your marital status when determining whether to offer you a credit card. By extension, whether you’re married or not doesn’t affect your odds of getting approved for a hotel credit card, nor should it impact your terms, rates, or benefits.

How much is charged by hotels on your credit card?

A hotel might charge your credit card when you book a room, check in, or at checkout. When your card is charged might depend on how you made your reservation and the hotel’s policies. If in doubt, read up on the hotel or booking platform’s policies.

Is your credit card charged when you check out?

If you’re booking for a prepaid stay, your credit card will be charged at the time you make your reservation. If it’s a standard booking, then the hotel will charge your credit card at checkout. Any incidentals — think room service, massage treatments, and meals at the hotel — will typically be charged at checkout.

Photo credit: iStock/Prostock-Studio

**Terms, and conditions apply: This SoFi member benefit is provided by Expedia, not by SoFi or its affiliates. SoFi may be compensated by the benefit provider. Offers are subject to change and may have restrictions, please review the benefit provider's terms: Travel Services Terms & Conditions.
The SoFi Travel Portal is operated by Expedia. To learn more about Expedia, click https://www.expediagroup.com/home/default.aspx.

When you use your SoFi Credit Card to make a purchase on the SoFi Travel Portal, you will earn a number of SoFi Member Rewards points equal to 3% of the total amount you spend on the SoFi Travel Portal. Members can save up to 10% or more on eligible bookings.

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A retail credit card is a type of credit card that is a partnership between a bank or major credit card issuer and a retailer. Also known as a store credit card, retail credit cards usually come with discounts, rewards, and other perks that are specific to that retailer.

You might have received an offer for a retail credit card when you’re at the checkout at a brick-and-mortar store. Or you may have gotten an offer in the mail or while shopping online. When it comes to determining whether store credit cards are worth it, you’ll want to weigh their pros and cons.

What Is a Store Credit Card?

As mentioned, a store credit card is the same as a retail credit card. A store card is a credit card from a retailer, franchise, or group of stores. It might come with a sign-up offer, such as a one-time discount on your purchase. Other perks include a credit card points rewards program, special promotions, offers, and discounts on your purchases. Some might offer 0% financing on big-ticket purchases.

Store credit cards are not to be confused with retailer loyalty cards. Loyalty cards are a way to gain access to deals and promotions, and to earn points to swap for a discount on future purchases. However, they do not allow you to buy with credit, which is essentially borrowing money.

Recommended: Understanding Purchase Interest Charges on Credit Cards

How Do Store Credit Cards Differ From Other Credit Cards?

There are two main types of store credit cards: private label store cards and cobranded store cards. Private label credit cards differ more from other credit cards, as they are closed-loop cards, meaning you can only use the card at a specific retailer or group of retailers.

Closed-loop cards are more common than cobranded store cards. Cobranded credit cards are open-loop cards that partner with a major credit card network — think Visa, Mastercard, American Express, or Discover. As such, you can use this type of store card at the featured store or group of stores, as well as anywhere that particular credit card issuer is accepted.

Unlike private label cards, open-loop cards also may give you a chance to rack up points or scoop up rewards beyond spending in that specific store. Private label cards generally reserve rewards earnings for that particular store.

Benefits and Drawbacks of Store Credit Cards

There are both pros and cons to retail credit cards. Advantages include:

•   Easier to obtain: Retail credit cards are usually easier to qualify for than other types of credit cards. They typically require just a fair credit score. And because they report to the major credit bureaus each month, they still can help you build your credit when you’re starting out.

•   Often no annual fee: Many store credit cards don’t have an annual fee, which can save you money. This can be especially motivating if you don’t anticipate using the card that often.

•   Instant discounts: When you first sign up for a retail credit card, you might get a one-time discount on your first purchase.

•   Discounts, promos, and offers: As a store cardholder, you might be privy to exclusive ongoing discounts or special promotions and offers. The types of discounts and offers vary widely depending on the retailer and time of year. For instance, a retailer might offer a flat 5% discount on every purchase. Cardholders also might have access to special coupons and offers.

•   Rewards and cash back programs: Similar to other types of credit cards, you can earn points to use for store purchases or cash back.

•   Other perks: If you’re a cardholder for a particular retailer, you might receive other benefits, such as free or expedited shipping, financing on certain types of products, or more time to return items.

Here are some potential downsides of a store credit card:

•   High interest rates: Whereas the average credit card annual percentage rate (APR) was 21.47% in late 2024, interest rates for store credit cards average exceeded 30% for the same period. If you carry a credit card balance, it could take you longer to pay off your debt. Plus, you’ll owe more in interest.

•   Inflexibility in use: If you have a private label store card, or a closed-loop card, then you can only use the card to make purchases at that particular store or group of stores. Unless you shop frequently at that particular retailer, it might prove difficult to use often enough to make sense.

•   Lower credit limits: Store credit cards usually have lower credit limits than other types of credit cards. In turn, it could be harder to keep your credit usage down. A high credit usage, or credit utilization ratio, could hurt your credit score.

•   Deferred interest: A retail card might offer 0% financing for a period of time. Here’s the potential catch: If you don’t pay off your purchase before the promotional period ends, you might be on the hook for all of the interest owed from the purchase date onward.

To recap, here are the major pros and cons to keep in mind when considering if you should get a store credit card:

Recommended: Difference Between Credit Card Issuer and Credit Card Network

Are Store and Retail Credit Cards Worth It?

A store credit card could be beneficial if you are building credit from scratch or are new to credit. As they typically are easier to qualify for and often don’t have an annual fee, you can use it at your leisure to build credit.

It can also be worth it if you are a loyal devotee and shop frequently at a particular retailer. That way, you’ll make the most of ongoing discounts, exclusive sales, promotions, offers, and additional perks.

When to Consider Getting a Store Credit Card

As mentioned, if you’re building credit from scratch and don’t want to worry about annual fees, a store credit card could be a good choice for you. It could also be a solid option if you shop at that retailer enough to make use of the card’s perks.

A store credit card can also be a good idea if you don’t need a card with a high credit limit. Ideally, you’ll be able to pay off the balance in full each month.

When Not to Consider a Store Credit Card

If you don’t anticipate using a card very often or prefer a card that you can use more widely, then it might be best to forgo opening a store credit card.

A store credit card also is probably not the best choice for you if you tend to carry a balance. That’s because the higher-than-average interest rates can gobble up any savings you’ve earned on rewards and discounts.

Alternatives to a Store Credit Card

Not sure a store credit card is worth it for you? Here are some of the different types of credit cards to look into:

•   Cash back credit card: A cash-back card is a type of rewards credit card that offers rewards in the form of cash back, which can offset your spending on the card. For instance, with a card that offers 1% cash back, you’d get $1 back for every $100 you spend. The SoFi credit card is an example of a cash-back card, offering unlimited cash-back rewards on all eligible purchases.

•   Airline credit card: Airline credit cards are a kind of travel credit card cobranded with major credit card networks. Similar to a store or retail credit card, you’ll receive perks with a specific airline company if you make purchases on the card. Airline credit cards typically are open-loop cards, which means you can use the card anywhere that type of card is accepted.

•   Hotel credit card: Hotel credit cards are offered through partnerships between a hotel and a credit card network. With a hotel credit card, you get points toward that particular hotel’s rewards program. The card might also come with other benefits.

Recommended: Instant-Use Credit Cards

The Takeaway

A store credit card could be a good idea if you are building credit from scratch or if there’s a card offered by a retailer you love and shop at often (you could access valuable perks). Otherwise, it might make more sense to look at other options with greater flexibility in use and lower interest rates.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Are store credit cards good for credit?

Store credit cards can help you build credit from scratch. They tend to be easier to qualify for than other types of credit cards. And if you practice good credit card habits, such as keeping a low credit usage and paying on-time, they can positively impact your score.

Will a store credit card build my credit limit?

Adding another credit card, no matter the type of credit card, can help build your credit limit. When you open a credit card, you receive a credit limit on top of those of your existing cards. For instance, let’s say you open a store credit card with a $2,000 limit, and your credit is capped at $10,000 among your other cards. By opening a store card, your credit limit will have increased to $12,000.

Should I cancel an unused store credit card?

You might consider closing an unused store credit card, but doing so could negatively impact your credit. That’s because it will lower your credit limit, which in turn increases your credit usage. Plus, it can impact your length of credit, which also plays into your score.

Will closing a store credit card hurt my credit?

Closing a store credit card could negatively impact your credit in two ways. First, it can lower your credit utilization ratio because your overall credit limit will decrease. Second, it could shorten the length of your credit history, which also impacts your credit score.

Photo credit: iStock/Prostock-Studio

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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When you check into a hotel, the hotel is very likely to ask you to put a credit card on file. This is true even if you are using points for a free night or if you have already prepaid for your stay. When you give the hotel your credit card, they will usually place a small hold on your credit card. This is typically a relatively small amount, but it can range from $20 to $200 above the price of your room.

Hotels use these credit card holds because the exact amount of your final bill is not known at the moment of check in. You may charge items to your room, grab some drinks from the minibar, extend your stay, or even cause damage to the property. Once you checkout and your final bill is settled, the hotel credit card hold will usually drop off of your credit card account.

What Is a Hotel Credit Card Hold?

A hotel credit card hold is a type of credit card hold that happens when you stay as a guest at a property. When you check in to a hotel, they typically will ask for a credit card to put on file. The hotel will then put a hold on your card to account for any incidentals or other charges during your stay, such as room service or perhaps wifi fees (yes, some places still charge for that).

You are not responsible for paying the amount of the hold unless and until it becomes an actual posted charge. It may, however, decrease your total available credit in terms of your credit card limit, and can impact your credit utilization ratio.

How Hotel Credit Card Holds Work

Hotel stays are one of a few types of expenses where you may not know the exact final amount of the charge initially. When you go to the supermarket and buy a week’s worth of groceries, you will be immediately charged for the cost of that food — no credit card hold required. But when you check into a hotel, the management will put a hold on your card to account for any extra charges or damages that could occur in the future. Even if you’ve found a great travel deal or used points for your stay, this kind of hold is typical.

What Can You Be Charged For?

Most hotels will put a hold on your credit card to account for any extra or additional charges that might come from your stay. Here are a few things you might be charged for:

•   The cost of your room (if not prepaid)

•   Additional nights if you extend your stay

•   Room service

•   Other items charged to your room (such as minibar snacks or an on-demand movie)

•   Damages to the property

Recommended: Breaking Down the Different Types of Credit Cards

How Long Does a Hotel Hold Your Credit Card?

Generally a credit card hold is processed by the card network itself (e.g. Visa or Mastercard) and not by the merchant. So the hotel itself likely does not have any control over how long the hotel credit card hold amount stays on your account. Generally, most hotel credit card holds will drop off within one to a few days after you check out.

If you’re still seeing the hold on your account after that, reach out to your credit card issuer to see if you can get it removed.

What Are the Benefits of a Hotel Credit Card Hold?

A hotel credit card hold doesn’t offer very many benefits to the consumer — it’s more just an artifact of how credit cards work. A hotel credit card hold may provide some semblance of protection for the hotel itself in the case of needing to get payment for additional charges or damages.

But from the consumer side of things, a hotel hold on your credit card is just something to be aware of and account for, since it will generally lower your amount of available credit.

Other Methods of Reservation

You have a variety of different methods of payment that you might use to pay for your hotel stay. You might use your credit card points, cash, or a debit card, or otherwise prepay for your stay.

But it’s important to know this: No matter how you reserve and pay for your hotel room, the hotel is likely going to ask you for a credit card to put on file and put a hold on your card when you check in. It’s quite typical throughout the industry.

Recommended: What Is the Average Credit Card Limit and How Can You Increase It?

Booking a Hotel Using a Credit Card Hold

One of the most popular ways to book a hotel is with a credit card. Using a credit card to book and pay for your hotel allows you to not have to give a cash deposit or another form of payment when you check in and check out.

If you pay for your hotel room with a debit card, credit card rewards, or cash, you’ll likely also have to show a credit card when you check in. The hotel will generally put a small temporary hold on your credit card account at that time.

Best Practices for Managing Credit Card Holds

It’s unlikely that you have any control over a hotel putting a temporary hold on your credit card. That said, it’s still important to understand what that means and how you can manage it.

Most hotel holds on credit cards are relatively small amounts, even as little as $20. However, if you have a credit card with a lower overall credit ceiling or if you are close to maxing out your credit, this practice may end up limiting your total available credit. You’ll want to be aware of that to minimize the chances of your credit card being declined.

How Do Hotel Credit Card Holds Help Hotels?

Hotel credit card holds help hotels by making sure that they have access to your card in case there are additional charges or damages by guests. In many cases, there are no additional charges. You can make a credit card payment for the total amount of your bill and settle your account.

But if there are any additional charges, a credit card hold helps the hotel to know that your card has at least a certain amount available to pay.

Credit Card Hold vs Debit Card Hold

Holds can be issued on both credit cards as well as debit cards. In both cases, a hold is temporary and for a specific amount. Once the charge is finalized, the hold will usually be automatically removed.

One important difference to note: Because a debit card is tied directly to your bank account, you may be charged additional fees if the hold triggers an overdraft on your account.

In either scenario, it can be wise to understand your total available balance and how any temporary holds affect it.

Recommended: Understanding Purchase Interest Charges on Credit Cards

The Takeaway

It is common practice in the hotel industry to request a credit card at check-in and place a temporary hotel credit card hold on the card. This temporary hold is generally around $20 to $200 higher than the outstanding balance on your hotel room. This hold helps to protect the hotel if you have any additional charges or damages to the room. The temporary hold will usually be cleared within a few days of checking out.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

What happens to your card limit when you use it to hold a room?

The amount of credit that you have available to use on your credit card account is reduced by any pending credit card charges like hotel room holds. Your available balance will be at this lowered level until the charge is finalized, which may take a few days after you check out. Make sure that you understand your available balance to limit the chances that your card is declined.

How long does a hotel hold your deposit?

Generally, most hotels will put a temporary hold on your credit card when you check in. This hold usually lasts for a few days after you check out, when it will usually disappear. If you see a hotel credit card hold on your statement longer than that, contact your credit card issuer to see if they can remove the hold.

How much do hotels hold on credit cards?

The amount that hotels hold on credit cards will vary by hotel. Usually the hold will be anywhere from $20 to $200, plus any outstanding balance owed on the room. This helps to protect the hotel over any extra charges or damages that might occur. If you’re not sure how much the hold will be for, you can ask the desk clerk when you check in for the policy at that specific hotel.

Photo credit: iStock/ferrantraite

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.

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Credit reports serve as a record of how you have handled the repayment of any loan or debt that you’ve taken out. The items that are contained in your credit report primarily come from information collected by the three major credit bureaus. If you’ve ever had a credit card, student loans, or other type of debt, you likely have a credit report.

Many lenders might look at your credit report when they are considering whether or not to extend you additional credit. Your credit score is also calculated in part from information that’s included on your credit report. These are two good reasons to regularly look at your credit report and make sure the information in it is accurate.

What Is a Credit Report?

At its simplest, a credit report is a compilation of information regarding past debts, loans, or credit card accounts that you’ve managed. Your credit report will contain basic information about you, as well as information on the various accounts you’ve had in the past. This might include the name of the creditor, the dates the account was open, the monthly payment amount, if applicable, and any current or outstanding balance.

Recommended: When Are Credit Card Payments Due?

How Does a Credit Report Work?

The issuers of most credit cards, loans, or other forms of debt report information about that debt to the most popular credit bureaus — Equifax®, Experian®, and TransUnion®. Each credit bureau compiles its own information, though there is usually a lot of overlap between the information that appears on credit reports from different credit bureaus. Lenders typically send updated information to the credit bureaus each month, or if any information about your debt changes.

Recommended: Tips for Using a Credit Card Responsibly

Credit Report Information and Your Credit Score

It’s important to understand the relationship between the information on your credit report and your credit score. While these two things are related, they are not the same thing. As information on your credit report changes, your credit score updates as well. This means that it’s possible for your credit score to change every month (or even more often).

Further, while the information on your credit report influences your credit score, you won’t find your credit score listed on your credit report. Rather, you’ll have to go to lenders or credit monitoring websites for that information, both of which can allow you to check your credit score without paying.

Information Provided By a Credit Report

In addition to information about your accounts, your credit report may include other information about you. As one example, a credit report from Experian consists of four sections:

•   Personal information: This includes details such as your name, address, employment information, and any past names you’ve used.

•   Accounts: You’ll see both open and recently closed accounts listed.

•   Inquiries: Both hard and soft credit checks will appear, though only hard pulls affect your credit score.

•   Public records: This is information about you gathered from public records, including bankruptcies.

How Is a Credit Report Made?

Each of the major credit bureaus has its own process for how it generates a credit report. It’s typical that the credit bureau will have an informational section with details about you, sourced from loan applications and/or public records.

Another section of most credit reports is a listing of your open and recently closed accounts. Lenders will often report to the credit bureaus information about the amount, payment history, and status of accounts you have with them.

Why Is a Credit Report Important?

Your credit report is important because it is one of the sources of information that’s used to calculate your credit score. And your credit score can help determine whether you are approved for other financial products, like a credit card. If your credit score is too low, you may not be able to be approved for a new credit card or loan, and if you are approved, you may have to pay a higher interest rate.

Additionally, your credit report matters because many lenders will often refer to it when determining whether to approve you and under what terms. Sometimes, they may look at what’s known as a tri-merge credit report, which combines the three credit reports from each of the major credit bureaus.

Recommended: How to Avoid Interest On a Credit Card

How to Get a Credit Report

One good way to get your credit report is through AnnualCreditReport.com . This is a website authorized by federal law and brought to you by the three major credit bureaus.

You are typically able to get a copy of your credit report from each of the credit bureaus every year and may be able to do so every week as well. Note that you can only get your own credit report to review — checking someone else’s credit report isn’t an option.

When to Get a Credit Report

It is a good financial habit to regularly review your credit report. As mentioned, you can get a free copy of your credit report from each of the major credit bureaus.

By reading a credit report regularly, you can make sure that there’s no inaccurate information on your credit report. If you have incorrect information, it could have a negative impact on your credit score.

What to Look For in a Credit Report

As you regularly review your credit report, there are a few common credit report errors you’ll want to look out for. These include:

•   Typos or incorrect information

•   Information belonging to someone with a similar name

•   Closed accounts that are still marked as open

•   False late payment

•   Duplicate debts or accounts

Monitoring Your Credit Report

If there is any incorrect or erroneous information on your credit report, you’ll want to dispute that with the credit bureau. Disputing a credit report is a relatively straightforward process, and it’s an important one.

Generally, most credit report disputes must be submitted with documentation. Look for instructions on AnnualCreditReport.com or at each of the credit bureau’s websites.

The Takeaway

If you’ve been using credit cards, loans, or other financial products, it’s likely that you have a credit report with each of the three major credit bureaus. Your credit report contains identifying information about you as well as information about your open and recently closed credit accounts. Regularly monitoring your credit report and correcting any incorrect information is a good financial habit to have.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Can negative information remain on my credit report for long?

Yes, negative information can remain on your credit report, even after you have closed your account. Most negative information will stay on your credit report for seven years, though some information (like bankruptcies) can stay on your credit report even longer.

How do I get my credit report?

You can get your credit report through AnnualCreditReport.com. You’re able to get a free copy of your credit report from each of the credit bureaus, often on a weekly basis.

Who is eligible to view my credit report?

You can view your own credit report, but in most cases, you will not be able to check someone else’s credit report. The only time someone else can view your credit report is if they have a legitimate reason, and they usually require permission to do so. This might include a potential lender that’s viewing your credit report to determine whether they want to extend you additional credit.

What errors might be present in my credit report?

While the major credit bureaus make every attempt to ensure that all credit reports are completely accurate, errors have been known to happen. Possible errors might include typos, accounts from someone with a similar name, duplicate accounts, or false late payments, among other errors. This is why it’s a good idea to regularly review your credit report and dispute any incorrect information.

What is the most important thing on a credit report?

Arguably all of the information contained in your credit report is important and worth taking the time to review. Perhaps most important is information on your accounts, as the details reported there have the potential to impact your credit score and thus your borrowing opportunities.

Photo credit: iStock/Deepak Sethi

SoFi Relay offers users the ability to connect both SoFi accounts and external accounts using Plaid, Inc.’s service. When you use the service to connect an account, you authorize SoFi to obtain account information from any external accounts as set forth in SoFi’s Terms of Use. Based on your consent SoFi will also automatically provide some financial data received from the credit bureau for your visibility, without the need of you connecting additional accounts. SoFi assumes no responsibility for the timeliness, accuracy, deletion, non-delivery or failure to store any user data, loss of user data, communications, or personalization settings. You shall confirm the accuracy of Plaid data through sources independent of SoFi. The credit score is a VantageScore® based on TransUnion® (the “Processing Agent”) data.

*Terms and conditions apply. This offer is only available to new SoFi users without existing SoFi accounts. It is non-transferable. One offer per person. To receive the rewards points offer, you must successfully complete setting up Credit Score Monitoring. Rewards points may only be redeemed towards active SoFi accounts, such as your SoFi Checking or Savings account, subject to program terms that may be found here: SoFi Member Rewards Terms and Conditions. SoFi reserves the right to modify or discontinue this offer at any time without notice.

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.

Disclaimer: Many factors affect your credit scores and the interest rates you may receive. SoFi is not a Credit Repair Organization as defined under federal or state law, including the Credit Repair Organizations Act. SoFi does not provide “credit repair” services or advice or assistance regarding “rebuilding” or “improving” your credit record, credit history, or credit rating. For details, see the FTC’s website .

Third Party Trademarks: Certified Financial Planner Board of Standards Inc. (CFP Board) owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER®, CFP® (with plaque design), and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board's initial and ongoing certification requirements.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.


External Websites: The information and analysis provided through hyperlinks to third-party websites, while believed to be accurate, cannot be guaranteed by SoFi. Links are provided for informational purposes and should not be viewed as an endorsement.

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An airline credit card is a category of credit card that allows you to rack up airline miles, among other cardholder benefits. These cards are usually cobranded with a particular airline. You can reap the perks of an airline credit card through purchases made on your card.

Airline credit cards are designed with the frequent flyer in mind. However, no two cards are alike. They can vary widely in terms of perks and restrictions, which you’ll need to consider when deciding if an airline credit card is worth it.

What Is an Airline Credit Card?

As mentioned, an airline credit card is a type of credit card designed for those who hop on planes frequently, such as avid travelers and those who fly a lot for work. Major network credit card networks and banks partner with airlines to offer cobranded airline credit cards.

They usually feature a rewards program, where you can earn points or credit card miles to redeem for flights, luggage fees, in-flight wifi, food and beverages, or upgrades to business or first class. Other perks might include reimbursement for canceled flights, insurance for lost baggage, and hotel room upgrades.

Recommended: How Do Credit Cards Work?

How Does an Airline Credit Card Work?

When you put purchases on your airline credit card, you’ll earn points or possibly miles. You can later use these points for travel-related perks, such as flights, hotel stays, and free upgrades. Beyond a rewards program, an airline credit card might also feature benefits like free upgrades to first class, invitations to airport lounges, and an annual travel credit.

To redeem your points, you usually can book directly through the card issuer’s portal. Sometimes, you can transfer your points to one of the card network’s hotel or airline partners.

Unlike private label credit cards, where you can only use the card at one specific store or group of stores, airline credit cards can be used anywhere the credit card network (such as Mastercard or Visa) is accepted.

Examples of Airline Credit Cards

Airline credit cards are a type of loyalty program for a particular type of airline, where you earn miles for making purchases with the card. However, there are several different kinds of airline credit cards:

•   General airline credit card: With a general airline credit card, you earn credit card points or miles for purchases, and you can redeem them for flights, upgrades, free wifi or in-flight food or beverage, and priority boarding or free checked bags. Some cards feature a sign-up promotion where you automatically get a certain number of miles or built-in travel perks.

•   Premium airline credit card: These have the upgraded version of airline card perks — think more points earned for each purchase, annual bonuses and travel credits, and access to exclusive airport lounges. As it goes, the greater the perks, the higher the annual fee. Premium airline credit cards tend to have higher annual fees than other types of airline credit cards. However, they generally aren’t quite as exclusive as, say, a black credit card.

•   Business airline credit card: This type of airline credit card is designed with the frequent business traveler in mind. Perks might include additional ways to earn higher points on business-related expenses, free upgrades to business class, a companion pass, and cards for you and your employees, which can help you earn miles more quickly.

Recommended: What Is an International Credit Card?

What to Consider Before Choosing an Airline Credit Card

The perks of an airline credit card are alluring. You’ll want to mull over these factors when shopping around for an airline credit card:

•   Fees: The more robust and attractive the perks, the higher the annual fee for a card likely is. That being said, there are a number of no annual fee credit cards in the airline credit card category that still offer perks.

•   Sign-up bonuses: Some cards will offer a sign-up bonus, such as a number of points for simply opening an account, or for spending a certain amount within a specified time frame.

•   Rewards: As you research cards, look at how you earn rewards as well as how many points you can earn for certain types of purchases. Also consider what types of rewards you’ll earn and if that’s a good fit for your spending. For instance, some people may prefer credit card miles vs. cash back.

Airline Credit Cards vs Travel Rewards Credit Cards

They might sound strikingly similar, and while airline and travel rewards credit cards both allow you to rack up credit card miles or points in return for rewards, an airline credit card is specific to an airline. In turn, you can only enjoy, say, free checked bags or flights with that specific airline.

Travel rewards cards, on the other hand, are broader in how you can redeem benefits earned. You typically use these more general rewards credit cards for any airline, hotels, and rental cars.

Both airline credit cards and travel rewards cards can come with added perks, such as credit card travel insurance. Additionally, both allow you to use them for any type of purchase. They also might feature no foreign transaction fees.

When to Consider a General Purpose Travel Credit Card

A general travel credit card could be a good idea if you travel enough to make the most of the offered travel-related perks and rewards. It can also be a stronger choice than an airline credit card if you aren’t loyal to any particular airline carrier or you don’t have a preference.

As usual, you’ll want to review the rewards program in addition to the perks, fees, rates, and restrictions on a card before making a decision.

Benefits of Airline Credit Cards

Unsure what the upsides are of an airline credit card? Here’s a look at the main benefits of having one:

•   Travel perks: If you hop on planes quite often, you can take advantage of an airline credit card’s rewards program. In turn, you might scoop up free flights, priority boarding, free checked bags, access to airport lounges, travel protection, and upgrades.

•   Discounts on the flight: Common in-flight discounts include money saved on wifi, meals and drinks, and on entertainment.

•   Sign-up bonuses: Some airline credit cards offer a generous sign-up bonus where you can snag points if you spend a certain amount within the first several months after opening an account. The exact terms will vary by card.

Airline Credit Card Cost

The cost of an airline credit card varies. Some have zero annual fees, while others can have an annual fee of several hundred dollars and upwards.

The annual percentage rate (APR) of an airline card also can vary. A particular credit card may advertise an APR range, though your rate will depend on your credit and financial situation.

Is an Airline Credit Card Right for You?

An airline credit card could be a good fit for you if you are a frequent flyer and love traveling on a particular airline. It’s important to carefully look over the perks, sign-up bonuses, and fees before moving forward with any particular airline credit card.

The Takeaway

An airline credit card could be a solid choice if you travel frequently and prefer to fly on one airline. Benefits can include travel perks, discounts, and sign-up bonuses, with rewards earned in the form of credit card points or miles. Before deciding if an airline credit card is a good idea, carefully research the perks and rewards and compare those against the fees, interest rates, and benefits of other credit cards, whether a travel card or a traditional card.

Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.

FAQ

Is an airline credit card worth it?

An airline credit card could be worth it if you are a frequent flyer and like to travel on a particular airline. However, it might not be worth it if you won’t end up using the rewards often enough to justify any annual fees on the card.

What are the benefits of booking a flight with an airline credit card?

Perks of booking a flight with an airline credit card might include free checked bags, bonus offers on miles, priority boarding, and lounge access, among others. The perks vary depending on the card.

Do you lose airline miles if you cancel a credit card?

Typically not. Points or miles earned on an airline credit card usually will be transferred to the specific airline’s loyalty program account shortly after you cancel and close out your account.

Must airline credit card rewards be used all at once?

Usually, you can use your rewards points or miles at your leisure and discretion. You do not have to use them in one fell swoop. However, points on an airline credit card might expire after a period of inactivity.

Photo credit: iStock/Choreograph

Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.

This content is provided for informational and educational purposes only and should not be construed as financial advice.


Third-Party Brand Mentions: No brands, products, or companies mentioned are affiliated with SoFi, nor do they endorse or sponsor this article. Third-party trademarks referenced herein are property of their respective owners.

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