With summer just starting, you probably aren’t thinking much about end-of-the-year holiday travel. But if you want to use a generous credit card sign-up bonus to finance your fall or winter trip, now is the time to apply.
According to a recent study by NerdWallet, you should apply for a new travel credit card no later than five months before your trip to take advantage of the sign-up bonus. It’s only June now, but in five months it will be November. So if you’re heading home (or to the Caribbean) for Thanksgiving or the December holidays, now’s the time to find the best travel credit card for you and apply.
[See: 6 Ways to Treat Yourself on a Budget.]
Why 5 Months?
The five-month lead time applies if you plan on using your new credit card’s points or miles to book a flight. That period includes:
— About two weeks to receive your card after applying
— Three months to spend enough on the card to earn the sign-up bonus
— Enough time to book your trip at least 47 days in advance — the ideal time to get the best deal
If you’re planning on booking only a hotel room, the necessary lead time may be shorter. However, keep in mind that hotel rooms may fill up faster during the holiday season, so plan accordingly.
How to Earn Your Sign-Up Bonus
You don’t have much control over how fast your card comes in the mail, but there are ways to hit your sign-up bonus faster. Bonus requirements vary by card, but the current industry standard requires you to spend about $2,000 to $5,000 in three months to get the bonus. If you spend that much normally, you’re set. However, if that’s a little steep for your normal monthly spending, there are a few ways to boost it responsibly.
Before we start, there’s a huge caveat: Charge purchases to your credit card only if you have the money to pay them off before accruing interest. If you can’t avoid going into debt to qualify for a sign-up bonus, you should opt for a cash-back card with a smaller bonus and a smaller spending requirement. Cash-back cards may actually be better for most travelers anyway, according to a recent survey.
[See: What to Do If You’ve Fallen (Way) Behind on Your Credit Card Payments.]
Here are a few things you may want to consider putting on your new travel credit card to hit the spending requirement:
All your daily expenses. Put all bills and other expenses that don’t come with a fee on your card. This includes utilities, charitable contributions and reimbursable work expenses.
Your six-month car insurance premium. Many insurance companies give you a discount for paying for six months of car insurance coverage at a time. Take advantage of this and add to your required spending at the same time.
Gift cards to use later. Buy gift cards to use at your favorite stores later on. This is money you’d eventually spend anyway, but it’s front-loaded to help you meet your spending requirements.
Pre-booked vacation expenses. Pay ahead for anything you can for your upcoming trip. You may even be able to pay for your hotel and rental car now. But make sure you can actually pay these charges upfront. A credit card is often required to make the reservation, but the charges don’t go through until you use the room or car.
Gifts. You’re already thinking about holiday travel, might as well think about the holidays themselves! Beat the crowds by doing your shopping now; you’ll get wonderful things your loved ones will enjoy and rack up miles and miles in the process.
Each item on this list is something you would spend money on anyway. Never charge anything you don’t need or want. You’ll get serious buyer’s remorse and maybe even unnecessary interest charges.
[See: 12 Frugal Ways to Save on Vacation.]
How to Book Your Trip for the Best Value
The value of a credit card mile or point can vary by rewards program and trip. This analysis of more than 20 rewards programs shows the average values along with the best redemption options. The miles required and the cash price for a plane ticket are often much higher during the holidays, so it’s important to pay close attention to make sure you’re getting the most bang for your, um, miles.
The best way to maximize your value is by having flexibility in your travel schedule. That way, you can try different dates to see which ones increase your miles’ worth. But even if you can’t choose your travel dates, you may be able to get a better value by looking at different travel times on your trip dates of choice.
If you don’t care about maximizing your points value as long as you get a free flight, that’s fine, too. Simply choose the flight you want that costs less than the miles you’ve accumulated to pay for it.
That’s all down the road, though. The first step to a free — or much cheaper — holiday trip is to apply for your new travel credit card now. You’ll have plenty of time to receive your card, earn your sign-up bonus and book your trip, saving you money and effort during the holiday season.
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Now’s the Time to Apply for a New Credit Card for Your Holiday Travel originally appeared on usnews.com
