Prepping your plastic: Tips for planning summer travel with your credit card
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- 2023 summer travel is more expensive than it was last year, but credit cards can be useful tools to reduce vacation costs.
- When planning for summer travel, be sure to pack a variety of credit cards, prepare a vacation budget and look into securing the best deals available to you through card travel portals, deal sites and more.
- Most importantly, try to keep debt to a minimum and ensure you have enough charging power.
Travel is heating up. According to a recent Bankrate survey, nearly two in three adults are planning on taking a summer vacation in 2023. Whether you go by sky, land or sea, make sure you prepare your credit cards well in advance. For safety and pleasure, you will want to have these essential financial tools at your disposal.
Here’s how you can make the most of your plastic before and during your trip.
Score a big bonus, soon
With high demand comes higher costs. International destinations are popular, but travel app Hopper reported that flights to Europe are about 36 percent more than they were this time last year.
To get an automatic discount on your trip, consider opening a new card that offers a generous sign-up bonus. With it, you can save on summer travel, since the amount you earn will lower the overall price of the trip.
For example, the Capital One Venture Rewards Credit Card has a 75,000-mile bonus. To get those extra miles, you need to spend $4,000 in the first three months from account opening. By purchasing two return tickets to Asia, each costing about $2,000, you would hit that minimum immediately. And since each mile may be worth up to 2 cents toward transfer partner travel, according to Bankrate valuations, the bonus is valued at up to $1,500.
Alternatively, look into cash back cards like the Bank of America® Customized Cash Rewards credit card. This card offers a $200 online cash reward bonus after making just $1,000 in purchases in the first 90 days of opening the account.
Whichever card you want to add to your portfolio, apply soon so you can meet the minimum spend without having to scramble. You may have to wait a few days or weeks before you get the rewards, too.
Open your credit lines before you leave
When you’re out of town, having plenty of available credit is important for fun and safety. After all, you don’t want to be stuck without sufficient charging power for all the things you want to do, and to cover any emergencies that may arise.
Therefore, take stock of all of the credit cards you have and review your current balances and how much you have left on your limit. If you owe, use this time to get out of debt. You may want to pare your budget down to basics or sell a few unnecessary items so you can drive the balances down.
In the event you can’t dwindle your debt entirely, ask the credit card issuer to raise your credit line. If you’ve been a responsible cardholder and have a good credit rating, it may increase it.
Pack a healthy, rewards-heavy credit card mix
It’s not a good idea to travel to foreign destinations without a variety of credit products in your bag. Bring both a Visa and a Mastercard with you just in case one is not accepted. Discover cards can be hit or miss abroad, and American Express has the lowest acceptance rates internationally.
And definitely make sure a few are rewards credits cards. You will want them to work in your favor while you’re spending during your trip.
“Look at your itinerary and assess what kinds of purchases you will be making,” says Jason Gaughan, head of consumer card products at Bank of America. “For example, if you plan to spend more on dining or experiencing new places, use a rewards card that will offer a strong cash back rate on your biggest and most frequent expenses. For international travelers, look for a card with no foreign transaction fee to save while you’re abroad.”
Create a realistic, debt-free trip budget
If the higher prices are causing you to question your trip, you’re not alone. The key is to modify. According to the Bankrate survey, 80 percent of summer vacationers are changing their travel plans due to inflation. Twenty-nine percent are selecting less expensive accommodations and/or destinations, 28 percent are engaging in cheaper activities and 26 percent are traveling for fewer days.
So instead of delaying or canceling your vacation, make some adjustments. Then decide on the amount you’re comfortable spending on the trip. Do your best to ensure that all associated expenses fall under that ceiling. With a well-developed vacation budget, you are far less likely to come home to unexpected and high debt.
“Before booking travel, do your due diligence and look for deals,” says Trae Bodge, a smart shopping expert and lifestyle journalist. “Travel apps like Hopper will help you find discounts on flights and hotels, but also check with deal sites like PayPal Honey for discounts on accommodations through VRBO and Hotels.com.”
Prepay as much as possible, then charge and pay
Using your rewards cards, pay for as many travel costs as you can in advance, then pay off the entire bill before you go. This way, the full value of the points, miles or cash will be yours to use later. Typical costs you can prepay for include flights, airport pick-ups, excursions, admission into museums and attractions and travel guides.
You’ll be paying for other vacation costs like meals, ground transportation and souvenirs along the way. Decide how you will manage those credit card transactions, and aim to pay with a credit card that will reward you for doing so. For example, the Chase Sapphire Preferred® Card offers 5X points on Lyft rides through May 2025. Double-check your cards’ rewards rates before you go to ensure you’re swiping the right card for each purchase.
Lastly, before you leave, add all of your bank and credit issuers apps to your mobile devices so you can monitor your spending and cover your charges as you make them. Not only will this strategy reduce or eliminate the balance owed before the account’s due date, but it will also keep your credit line open.
Reduce costs with credit card perks and deals
To further reduce the amount you have to pay for your trip, look into all the things that your credit cards may include as valuable travel perks. It could be everything from:
- Airport lounge access
- CLEAR, TSA PreCheck or Global Entry fee credits
- Free checked bags
- Travel insurance
- Car rental discounts
- Dining credits at the airport or hotel
- Complimentary room upgrades
Review the extras that are embedded in your credit card account and plan on using them accordingly.
“Some credit cards even offer exclusive travel deals if you book your trip directly through them, and the savings can be significant,” says Bodge. Look for a card issuer that has a travel portal, such as American Express, Capital One, Chase and Citi.
Plan your plastic today for a fabulous trip later
Now is the time to prepare for all the elements involved in your summer travel, including your travel credit cards. According to Gaughan, survey data collected by Bank of America found that 32 percent of consumers plan their vacations one to three months in advance. That’s enough time to get your money and accounts in order. You’ll be happy you made the effort.
“Planning ahead can reduce stress, help you stay on track to reach your financial goals and enable you to truly kick back and enjoy your time while traveling this summer,” says Gaughan, who also encourages saving throughout the year for getaways. “You can avoid putting yourself in a financial bind when you spontaneously book a trip.”
For more travel planning tips, visit Bankrate’s travel toolkit.