The credit cards of summer
Some credit cards travel better than others. We take a look at ones that will save you the most in your summer travels.
This post is by Odysseas Papadimitriou of partner site CardHub.com.
While the portion of people planning a getaway is unchanged from last year at 77%, according to a recent Orbitz.com survey, the number of folks who say they’ll spend over $1,500 has increased more than 28% from last year and 75% since 2011.
The thing is, the recovery has created a clear disconnect between what we think we can afford and reality. Growing confidence has led us to rack up more than $82 billion in new credit card debt over the past two years alone after being reasonably conservative during the worst of the recession.
But the recession also gave issuers a wake-up call about the importance of economically resilient customers, and as a result they’ve been offering increasingly lucrative initial rewards bonuses and 0% financing offers to attract people with excellent credit. Nearly half of all consumers have excellent credit.
The right credit card can now save you $400 or more via such perks. That equates to at least a 16% subsidy for the 43% of travelers who plan to spend between $1,500 and $2,500 this summer.
CardHub recently released a study that identified which of the more than 1,000 credit card offers currently on the market offer the most value to summer travelers. They are as follows:Initial rewards bonus
- Chase Sapphire Preferred Card: Offers 40,000 bonus points for spending $3,000 during the first three months and does not charge an annual fee during the first year ($95 after that). You can redeem those rewards for $500 in travel accommodations or a $400 statement credit.
- Barclaycard Arrival World MasterCard: This card will also give you 40,000 extra miles, and you’re required to spend far less –- $1,000 in the first 90 days –- to get them. These miles can be used to pay for $400 in travel-related expenses. There is no annual fee in the first year ($89 after that).
- Hilton HHonors Surpass Credit Card: Not only does this card give you 40,000 bonus points after your first purchase, but you’ll also get an additional 20,000 points once you charge $3,000. All together, that’s worth 1-8 free hotel nights, depending on what type of hotel you choose. There is a $75 annual fee.
- Club Carlson Premier Rewards Card: The 85,000 bonus points you stand to earn with this card -– 50,000 after first purchase and 35,000 for spending $2,500 within 90 days –- are redeemable for as many as 18 free hotel nights. It all depends on how nice your chosen establishment is and the number of consecutive nights you stay there (since the last night of each stay is free when you book two or more consecutive nights with points). There is a $75 annual fee.
While eye-catching, rewards might not be the best choice for those of us who either have existing debt or expect to accrue some in the summer months. Using one of the following 0% cards to nip finance charges in the bud will likely save you more in the long run, especially if you leverage a credit card calculator to figure out what monthly payments will be required to reach zero balance by the time regular rates take effect.
- Citi Diamond Preferred Card: Offers 0% interest on new purchases for the first 18 months and does not charge an annual fee.
- Slate Card from Chase: In addition to not charging interest on either purchases or balance transfers for the first 15 months, this card does not asses annual membership fees or balance transfer fees.
Whichever type of card you choose, make sure to start planning early because it will take a few weeks to add that new plastic (not to mention the free money that comes along with it) to your wallet.
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