Thanksgiving to Christmas is one of busiest travel times of the year. School holidays and relaxed work schedules help make traveling to visit family and friends possible. Many families might spend as much, or more, in holiday travel than they spend on Christmas gifts. If you are planning a big trip to take the family to Grandma’s house, using travel credit card bonuses can help transform your plan into an affordable reality.
What is a Credit Card Sign-up Bonus?
Many credit cards offer sign-up bonuses that require new customers to meet a spending minimum, typically within the first three months of being approved that offer a handsome bonus of cash rewards, loyalty points, or free hotel nights as a reward.
Typically, credit cards with annual fees offer more valuable bonuses and the value normally increases proportionally with a higher annual fee. But, it can also be beneficial to consider no-fee credit cards as they offer bonuses that can offset travel costs like lodging and because they do not have an annual fee, they make for a great secondary credit card that can allow you to earn additional points for future travel expenditures.
Travel sign-up bonuses come in many varieties ranging from airline miles, hotel points, or credit card points that can be redeemed for award travel. Most general travel rewards credit cards, that allow points to redeemed for air travel or hotel stays, generally make the points most valuable when redeemed for air travel. The Chase Sapphire Preferred, for example, has a sign-up bonus of 50,000 points that are worth $625 for any reward travel, but, American Express Membership Reward points are more valuable for air travel compared to redeeming them for hotel stays.
Just as airfare prices fluctuate on a seasonal basis, credit card sign-up bonuses also increase or decrease in value. Some card bonuses remain constant through the year, but other cards offer the highest bonuses leading up to peak spending seasons.
Namely summer vacation and the year-end holiday season. As many of the travel rewards sign-up bonuses require spending at least $1,000 to qualify for the bonus, applying for a card at the last minute to use the sign-up bonus might be difficult as tickets might sharply increase in price or sell out before you receive the sign-up bonus if there is a high spending requirement. Even if you do not receive the sign-up bonus in time, some cards have additional benefits like rental car insurance, free checked baggage, or travel credits that can save some additional money.
Another money-saving tip is to consider applying for travel rewards card that you previously owned. With the exception of American Express, most credit card companies will offer the sign-up bonus to previous cardmembers as long as it has been at least 24 months since they last owned that credit card. To save yourself the hard inquiry on your credit report, be sure to read the terms & conditions of the bonus to make sure you qualify before reapplying for the credit card.
The best advice is to plan ahead for holiday travel. To some extent, travelers are at the mercy of the airlines and other travel companies as the Thanksgiving to New Year’s season is the most concentrated travel month during the year. The best time to buy holiday plane tickets is in October for Thanksgiving and by early November for Christmas and New Year’s. To use credit card sign-up bonuses to pay for the holiday travel, you will need to be approved for the new credit card and earn the bonus before the ticket prices skyrocket or all the good flights are taken.
Planning ahead will also help you prevent you from unnecessary spending just to earn the credit card bonus in time to use the points for your holiday plans. By applying for the card shortly before you plan on making a large purchase, such as summer family vacation or a new household appliance, allows you earn the reward with purchases you were going to make regardless and not be forced to spend a penny more than required.
By making plans to finance holiday travel plans well in the future, you might also be able to capitalize on the limited-time increased bonus offers if you have a specific reward card in mind. If you cannot time the sign-up bonuses, that’s ok, earning a bonus without having to manufacture spending that can reduce the monetary benefits of a sign-up bonus.
Be Flexible to Reduce Travel Costs
One of the reasons Thanksgiving and Christmas travel is so expensive is because there are a limited number of days many families can travel due to work or school schedules. In regards to Thanksgiving, the cheapest airfare days are Thanksgiving Day and the following Monday when most people are gathered around the dinner table or have already returned to work.
Christmas is a little bit harder to determine and you might have to play with the dates when searching for flights. It can be cheaper flying out on Christmas Day or December 26th and returning on New Year’s Day. Another possibility is flying down a few days before Christmas and returning immediately after Christmas Eve or Christmas Day. In a nutshell, traveling when other do not want to, whether it is the actual holiday or a red-eye flight can reduce costs and stretch your credit card points even further.
Maximize Additional Credit Card Benefits
Affordable holiday travel goes beyond sign-up bonuses. Whether you are a new cardholder or a long-time member, many credit cards also come with additional travel benefits that give you a reason to keep the card for future holiday excursions. Depending on the type of travel rewards card you own, you might be able to save some money in a variety of ways.
Air Travel Credit
If you own a premium travel credit card like the Chase Sapphire Reserve or the Citi Prestige, you receive an annual air travel credit that can be used towards the cost of plane tickets and incidental expenses such as checked bags or in-flight purchases. Depending on your flight itinerary, these cards also offer lounge access to help you relax during a layover at major airports across the globe.
Free Checked Bag
Travelers that use an airline-specific credit card normally enjoy the added benefit of a free checked bag. A handy perk if you cannot carry-on everything you will be taking.
While nobody wants to get stranded when traveling, winter weather can be unpredictable at times causing unexpected flight delays and cancellations. Many airlines sell an add-on policy during the reservation process, but most travel credit cards have comparable travel insurance policies. If you have expensive reservations waiting for you once you leave the airport, this little perk can help you save you few dollars by skipping the additional purchase from the airline or another third-party agency.
Rental Car CDW Coverage
If you fly, you might also have to rent a car. Another perk offered by general travel rewards cards is rental car collision damage waiver. In the unfortunate event, that the rental vehicle is involved in an accident or stolen, the credit card company will reimburse up to $75,000 in damages for most cases. This insurance can be a large portion of a car rental fee, and being able to waive the coverage can save some additional money.
A sign-up bonus might be the primary reason you choose a particular credit card to fund your travel itinerary, but, additional card benefits can also be very helpful. Travel cards with annual fees normally have better benefits, but, a no-fee card can also be very useful in defraying smaller expenses like lodging. So, it can pay to compare to several rewards cards with comparable annual fees to see which card will benefit you the most.
Author: Jeff Gitlen
Your Guide to Financial Freedom
Money tips, advice, and news once a week
Join the LendEDU newsletter!Thanks for submitting!Please Enter a valid email
Best Credit Cards by Type
Credit Cards by Brand