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Traveling for the holidays? 5 reasons to open a new travel card now

Yahoo Personal Finance· Namthip Muanthongthae via Getty Images
Kendall Little
·Senior Writer, Credit Cards
Updated 7 min read

Holiday travel season is nearly here — and it’s going to be expensive. But you may still be able to take advantage of savings, deals, and rewards for the future with the right travel credit card in your wallet.

Travel prices have risen by more than 4% year-over-year and more than 20% since 2019, the U.S. Travel Association’s most recent Travel Price Index (TPI) shows. And over the 2023 season, Americans expect to spend 12% more on travel than they did in 2022, according to PwC’s Holiday Outlook.

You don’t have to blow your entire budget on travel this year, though, whether you’re planning an annual return to your hometown, visiting extended relatives, or getting away for a holiday vacation.

Here are just a few of the ways choosing the right travel rewards credit card today can help you benefit this holiday season.

A high-earning travel credit card can benefit anyone’s wallet year-round. The key is choosing the right card for your spending, travel schedule, and preferences.

Before submitting any new application, make sure your card offers long-term rewards and benefits that give you back more value than you’ll pay in the annual fee. And be careful to keep your spending within your budget year-round so you don’t risk taking on high-interest debt.

With that in mind, there are some great benefits to locking in a travel credit card now. Start building up a solid rewards foundation over the holiday travel season and you can bring in more savings throughout the year ahead.

Perhaps the biggest benefit of getting a new travel credit card is the opportunity to get a high-value sign-up bonus. These cards are well-known for their bonus offers worth hundreds of dollars in value, if not more.

Because you’ll likely be spending more than usual on travel already, this is a great time to qualify by meeting a required spending threshold that may not usually be within your budget.

Here are just a few great sign-up bonuses available today:

There are also plenty of great deals for travelers who prefer a specific airline or hotel chain:

Even if you are spending more than usual this season, always make sure you have the cash to pay down your balance in full when your bill is due. Interest charges from very high credit card APRs will cost much more than you’ll get in return from bonus rewards.

Read more: See our picks for the best credit card sign-up bonuses

Every year, flight and hotel prices only rise as the holidays grow closer — so you shouldn’t wait much longer if you haven’t already booked.

If you know you want to use a new travel credit card to book your upcoming holiday travel, but you’ve put off taking action, now is the time.

Data from travel booking site Hopper suggests that airfare prices will spike before both Thanksgiving and Christmas, two of the major holidays this season. Here’s an overview of what you can expect, from Hopper’s 2023 Holiday Travel Outlook:

  • Thanksgiving: Prices will increase by an average $7 per day in the 3 weeks leading up to Thanksgiving. By the week before, expect prices to rise by $30 or more per day.

  • Christmas: Prices will rise throughout November and December, and spike by more than $40 per day in the week before Christmas.

Choose the credit card you want to use for your holiday travel, and start booking now to lock in today’s lower prices before they rise further.

A great welcome bonus isn’t the only attraction of a new travel credit card. You can also rack up rewards when you use your new card to book this year’s holiday travel to bank toward a future vacation.

When you use the right travel credit card to make your travel purchases over the holiday season, you can cash in for great deals to other destinations for spring break or summer vacation.

Example: Say you open a new card with a 50,000-point welcome bonus after you spend $3,000 within 3 months of account opening. It also earns 3x points on travel spending.

You’re planning to visit family across the country this December on a round-trip flight that costs you about $800. While you’re going to spend the majority of your trip staying with family, you do book one night at a hotel for another $200.

That’s a total of $1,000 spent on holiday travel alone, one-third of the way to earning the bonus. Plus, with 3x rewards on travel, you’ll get 3,000 bonus rewards points on that spending. Your regular spending totals another $2,000 at 1 point per dollar, helping you meet the required spend for the bonus.

In total, you’ll gain 55,000 points toward your next trip within three months of opening your account. At a minimum redemption rate of 1 cent per point, that’s equal to at least $550 in travel.

For many people, budgets are least restrictive during the holiday shopping season.

Maybe you planned ahead and put aside some extra cash throughout the year, or you’re getting a windfall in the form of cash gifts or an end-of-year bonus. On average, Americans expect to spend a total $1,530 this holiday season on themselves and others, according to the PwC survey.

Just like your holiday travel purchases can help you meet a spending bonus or start earning rewards toward future travel, so can your holiday spending in general.

Keep your planned spending in mind when choosing your new travel credit card, too. If you know you dine out frequently — and have multiple restaurant visits planned over the season, you may want to ensure your travel card offers bonus rewards at restaurants, like the 4x Membership Rewards points at U.S. restaurants with the American Express? Gold Card.

Or maybe you have a large extended family to deliver gifts to by mail, and want to earn points on all your upcoming online shopping. While this isn’t usually a common rewards category, you can use a card like the Capital One Venture Rewards Credit Card and earn 2x miles on every purchase, so you’ll get boosted rewards on all your spending.

While every traveler hopes for a seamless travel experience, you never know what’s in store until you arrive. Just think back to last year: Passengers across the country were stranded after thousands of flight cancellations and even more delays wreaked havoc over the final week of 2022.

Not even the best credit card can predict the weather or prevent a logistical breakdown, but it may help protect you against unknown flight disruptions. Travel protection and insurance benefits may even be one of the best reasons to open a travel card before you book your upcoming holiday travel.

Here are a few protections top travel credit cards today might extend to cardholders:

  • Trip delay reimbursement

  • Trip cancellation insurance

  • Trip interruption insurance

  • Baggage delay, loss, or damage insurance

  • Travel accident insurance

  • Rental car insurance

  • Emergency assistance services

These may not be the standout benefits you look for when choosing your travel credit card, but they can make all the difference when you need them. If travel protections and benefits are important to you, make sure you read the fine print of your card agreement before applying. Not all cards offer the same protections, and you may need to meet certain requirements (like booking your trip with the card) for your specific travel to be covered.

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