On a similar note...
On a similar note...
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With the travel industry grinding to a halt around the world, why would anyone in their right mind apply for a travel rewards credit card right now? In fact, now might actually be an excellent time to do so, for several reasons:
1. Travel rewards credit cards were never about the short term
As an expert in credit cards and travel rewards, I’m always being asked for advice on how to earn points and miles toward a trip. Yet too often, I speak to people who want to get a new credit card to earn rewards for a vacation that they want to take within the next few months, which isn’t usually possible. In response, I try to let them down gently by explaining that it could take months just to earn an initial welcome bonus from a travel rewards card, and then you’ll want to redeem your rewards for award flights at least several more months beyond that.
But in the light of the global coronavirus pandemic, travel isn’t really an option right now — and there is a lot of uncertainty around the ability to travel this summer, or possibly for the rest of the year. However, now is the time to start earning rewards for that trip that you might hope to take over the holidays, sometime next year or whenever it’s safe to travel again.
» Learn more: Should I pay for my hotel using cash, points, … or both?
2. We might be entering a golden age of travel rewards
Up until recently, when the economy was great and travel was in high demand, there was little incentive for airlines or hotels to release many seats and hotel rooms to award travelers, or at least not for a reasonable amount of points or miles. But now the pendulum has swung radically in the other direction, and many award travel experts like myself expect to see airlines and hotels dramatically increasing the availability of award reservations in order to fill excess capacity.
When that happens, travelers who already have a stash of points and miles could see extraordinary value when using them in 2021 and in the years ahead when the travel industry begins its recovery. Next year, you might have a unique opportunity to redeem points and miles to fly in business or first class to Europe or other destinations during their peak seasons. Now is the time to start earning rewards and saving for such a trip.
3. Welcome bonuses remain at an all-time high
Before the current crisis, credit card issuers had been in an all-out war to acquire new customers, and their ever-increasing welcome bonuses have been one of their most powerful weapons. These are the ubiquitous offers to earn tens of thousands of points or miles after completing a minimum spending requirement within a specified time period, usually three months from account opening. These bonuses were extremely valuable, and you could often receive points or miles that were potentially worth thousands of dollars of award flights or hotel reservations from a single card.
While nobody knows what will happen to the market for travel rewards credit cards or the larger economy, there hasn’t been any significant changes to these offers since the crisis erupted in mid-March. So if you’ve had your eye on a new travel rewards credit card, or were considering upgrading your current card, then doing so now means you can take advantage of the best offers available, which might not be around forever.
» Learn more: How to choose a travel credit card
4. Personal finance uncertainties
To be approved for a premium rewards card you need excellent credit and a regular source of income. Simply put, a lot of people who easily meet those qualifications now can’t be sure if they will in the future. Premium rewards cards have higher interest rates than other similar non-rewards cards, so you should never carry a balance with one. But if you’re unsure if you’ll qualify for one in the future, then now might be the time to choose the best one for your future needs.
5. Keep hope alive
I love to travel, especially when I can pay for most of my trips with reward points and miles. But when I’m not traveling, I also enjoy daydreaming about all the places that I want to go and researching the destinations that I’ve selected for my future trips.
Now more than ever, earning travel rewards lets us imagine a brighter future beyond the current crisis, and to take tangible steps that will allow us to step out into the world again. When confronted with the bleak news of the day, we can still remind ourselves that this crisis will pass, and our favorite destinations will still be there when we’re all able to travel safely once again.
How to Maximize Your Rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2020, including those best for:
Airline miles and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Wells Fargo Propel American Express® card
Flat-rate rewards with no annual fee: Bank of America® Travel Rewards credit card
Premium travel rewards: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card
Check out these articles for more inspiration and advice: Find the best travel credit card for you Ask a Points Nerd: When will it make sense to travel again? How to book future air travel amid coronavirus uncertainty