According to the American Express Spending & Savings Tracker survey, six out of 10 Americans plan to spend an average of $1,180 per person on at least one summer vacation — and almost half will pay for their summer travel getaway with a credit card.
Using a credit card to fund your summer travel may indeed result in added value, provided you use one that offers a competitive interest rate, and has plenty of earning potential to offset any annual fees.
According to CardHub’s Q1 2013 Credit Card Landscape Report, now’s the time to score major credit card deals: The average cash back initial bonus is nearly 34% more valuable than it was in 2012; opportunities to earn points and miles bonuses are up about 14%.
We’ve rounded up some of the best summer travel credit cards that give you more bang for your vacation bucks:
Recommended for points-earning potential
If you’ve already saved for your summer travel vacation and can pay your credit card at the end of the billing cycle to avoid interest charges, (or better yet, at the statement closing date to keep your debt-to-income ratio low), you’ll benefit from a credit card that offers purchase incentives that pay.
[pull_quote align=”left”]You’ll receive a 40,000-point rewards bonus redeemable for $500 in travel accommodations when you book using Chase’s Ultimate Rewards program portal, provided you charge $3,000 on the card in the first three months of account opening.[/pull_quote]Chase Sapphire Preferred Card. You’ll receive a 40,000-point rewards bonus redeemable for $500 in travel accommodations when you book using Chase’s Ultimate Rewards program portal, provided you charge $3,000 on the card in the first three months of account opening. (You also have the option to choose a $400 statement credit if you don’t want to use the Chase travel portal).
After the initial bonus, you’ll earn two points for every dollar spent on travel and dining, and one point for each dollar spent everywhere else.
If you frequently do your summer travel on Southwest Airlines to save money on checked baggage fees, the Ultimate Reward points can be converted to Southwest Rapid Rewards points at a one-for-one conversion. The card’s $95 annual fee is waived for the first year.
The Barclaycard Arrival World MasterCard is another points powerhouse, offering 40,000-mile rewards bonus points (which translates into a $400 statement credit for travel-related charges) after cardholders charge $1,000 within the first 90 days of opening the card.
Some account holders with excellent credit may even qualify for one-year, 0% introductory rate. Like Chase Sapphire, it does include an annual fee ($89), but it’s waived the first year.
If your summer travel style is “planes, trains and automobiles,” the Capital One Venture Rewards Card offers a $100 bonus for the first $1,000 charged during the first three months. You’ll earn two “No Hassle Miles” for every dollar spent, which can be redeemed for any travel expense including airfare, hotels and gas. The $59 annual fee is waived for the first year.
Recommended for rate (as in, 0%)
If you haven’t quite accrued the savings needed to fund your summer vacation in cash, a 0% interest rate credit card can “float” your travel expenses temporarily — but make sure you mark your calendar to pay the balance in full, before the low rate expires.
[pull_quote align=”left”]”Intense competition for the most responsible credit consumers has spurred a game of one-upmanship when it comes to 0% offers and initial rewards bonuses,” says CardHub CEO Odysseas Papadimitriou[/pull_quote]Credit card industry expert and CardHub CEO Odysseas Papadimitriou says that low interest card offers abound for those with strong credit scores. “Intense competition for the most responsible credit consumers has spurred a game of one-upmanship when it comes to 0% offers and initial rewards bonuses — and put downward pressure on interest rates for people with excellent credit,” he says.
The Citi Diamond Preferred Card offers no interest for the first 18 months and no annual fee. The Slate Card from Chase has a 15-month interest-free introductory period, and a balance transfer offer for the same time period.
Recommended for brand loyalists
If you’re brand loyal to a certain airline or hotel chain, there can be value in taking advantage of an affiliate branded credit card for summer travel.
Starwood American Express. If you stay at Starwood properties (which includes brands like W hotels, Westin, Sheraton and St Regis), you’ll earn up to five Starpoints for every dollar spent at the hotels; in turn they can be used for free hotel stays during summer travel.
If you stay and use your card at the Sheraton, the third night is free. The $65 annual fee is waived for the first year.
Gold Delta SkyMiles Credit Card. This card is a potentially money-saver for families flying on Delta this summer.
In addition to rewarding 30,000 bonus miles after you spend $500 in the first three months of card opening, cardholders get priority boarding, reduced rates ($25/person) to Delta Sky Clubs, the first checked bag free for up to nine people on your reservation, and additional insurance protection for car rentals, which can all come in handy for more summer travel.
We prefer these cards for summer travel. But there may be others out there worth a good look. Which cards do you use to fund your summer travel?