The right credit card could make your next trip more affordable.
Many people have spent most of 2020 locked in their homes – or nearby – and this extends to those who would normally do their fair share of travel. If you didn’t go out much last year, you might be looking forward to taking a big trip this year, especially now that coronavirus vaccines are readily available and there are fewer travel restrictions.
But paying for a big trip can be difficult, especially if you’re weak in the savings department. If you could use a little extra cash to cover your travel expenses, here’s a credit card transfer worth doing.
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Look for a generous sign-up bonus
Nowadays, a number of credit cards offer signup bonuses which give you money, miles, or points for spending a certain amount of money shortly after opening your card. You may, for example, be eligible for an offer where you get $ 500 cash back for every $ 3,000 spent within three months of opening a given card, which is a pretty good deal. Or, you may be eligible for 50,000 reward points, which you can redeem for free flights or hotel stays, for spending $ 5,000 on a new card within three months.
Now there’s a catch: the most generous signup bonuses are usually only for credit card applicants with good credit scores. If your score is fair average, you may not qualify. But if not, it pays to apply for a sign-up bonus credit card if you are planning a big trip. Just make sure you won’t have a problem hitting the spend threshold to get that cash back or that stack of points.
In fact, one mistake consumers tend to make when it comes to signup bonuses is spending unnecessary money to earn their free money or points. A better bet, therefore, is to schedule signup bonuses with expensive events, like vacations.
Suppose you had to spend $ 3,000 on a new credit card within three months to get $ 500 in cash back. If you normally only charge $ 800 per month of spending on your credit cards, that means you’ll have to spend above your usual threshold just to get your bonus. But if you know you’ll be depositing $ 1,500 for an upcoming trip, you can open that new card and hit half your spending threshold with just that one fee.
Find the right offer
You don’t have to limit yourself to just one signup bonus at a time, but applying for too many new credit cards at the same time isn’t always a good idea. Doing so could lower your credit score and serve as a red flag on your credit report, which could hurt your chances of getting those offers approved in the first place. You might be better off limiting yourself to just one sign-up bonus per credit card. So to that end, get ready to do some research.
Specifically, compare different offers to see which gives you the biggest cash back, in percentage terms. Also see which offer will be easiest for you to snag. A $ 500 cash back offer for $ 3,000 of spending within three months can be generous on its own, but if an offer of $ 200 to spend $ 1,500 within the same timeframe fits your spending plans better, then this is probably a more suitable option for you.
If you’re gearing up for a big trip this year, you better be strategic about which credit cards you sign up for. The right card could not only put a nice bonus in your pocket to offset your vacation expenses, but it could also kindly reward you for expenses you incur while traveling.