- Signing up for a new credit card probably isn’t on your holiday to-do list, but it should be.
- If you sign up for a credit card now, you can earn a sign-up bonus of points or miles in time for the holidays, and those rewards can help offset holiday travel expenses.
- Credit cards like the Platinum Card® from American Express and the Chase Sapphire Reserve also offer statement credits that can cover some of your travel purchases.
- Benefits like TSA PreCheck and Global Entry can make your holiday travels more convenient.
- Read more personal finance coverage.
When you think about preparing for the holidays, applying for a credit card probably isn’t at the top of your to do list – but it should be. Here are a few reasons why signing up for a new credit card now could be a great step in your holiday planning.
Keep in mind that we’re focusing on the rewards and perks that make these credit cards great options, not things like interest rates and late fees, which will far outweigh the value of any points or miles. It’s important to practice financial discipline when using credit cards by paying your balances in full each month, making payments on time, and only spending what you can afford to pay back.
Earn points and miles to offset holiday travel
According to travel website The Points Guy, the best time to book travel for Thanksgiving and Christmas is three to four weeks in advance – which means if you want to use credit card rewards to offset your holiday travel, now’s the time to get started.
Credit card rewards can make a major dent in your holiday travel spending. For example, the 50,000-point sign-up bonus on the Chase Sapphire Reserve (which you can earn after spending $US4,000 in the first three months) is worth up to $US750 in travel booked through the Chase website – and if you use that on airfare, you’ll also earn miles on your tickets.
Or you can transfer those points to an airline or hotel partner – for example, 50,000 points could get you two round-trip tickets within the United States on United Airlines, or if you already have Southwest Airlines points it could make sense to transfer points to Southwest’s Rapid Rewards program to get enough for an award ticket with no blackout dates.
Some credit cards also offer companion certificates, which allow you to bring a second person along for just the cost of taxes and fees – an incredible deal, especially when airfares are high. The Alaska Airlines Visa Signature credit card offers this benefit, as do the Platinum Delta SkyMiles® Credit Card from American Express and the Delta Reserve® Credit Card from American Express.
Use holiday purchases to meet minimum spend requirements
Nearly all credit cards that offer a welcome bonus or signup offer require that you spend a certain amount of money on purchases within the first three months of opening the card – typically between $US3,000 and $US5,000.
Between holiday travel, gifts, and parties, many people find that the holiday season comes with higher-than-usual expenses – so combined with your usual spending, that minimum spend requirement may be less daunting during the holidays.
Take advantage of annual credits
Some credit cards like the Chase Sapphire Reserve, Citi Prestige® Card, the Platinum Card® from American Express, and American Express® Gold Card come with annual credits to offset travel fees or other travel expenses. While the Chase Sapphire Reserve’s credit is tied to your account anniversary, the other cards on this list offer the credit once per calendar year. That means if you sign up for the card now, you can receive the credit before the end of 2019, and then use it again starting in January. It’s a great way to offset the high initial cost of these cards’ annual fees.
This philosophy isn’t restricted to travel, either: it also works for other time-restricted credits, like the Saks Fifth Avenue credit offered by the American Express Platinum and the Dell credit offered on the Business Platinum® Card from American Express.
Beat long lines at the airport or immigration by taking advantage of Global Entry or TSA PreCheck credits
Many credit cards will reimburse you for enrolling in the Global Entry and TSA PreCheck trusted traveller programs. TSA PreCheck allows you to skip long security lines at US airports, and go through an expedited lane where you don’t have to take your shoes off or take anything out of your bags. This makes a huge difference in your travel experience, especially if you’re travelling with family members.
If you ever travel internationally – and especially if you plan to go abroad during the holidays – Global Entry could be your new best friend. In addition to TSA PreCheck benefits, you also get access to expedited immigration and customs lines at US airports and land borders, as well as pre-clearance facilities in Canada, the Caribbean, Ireland, and Abu Dhabi. During the busy holiday travel season, you could easily spend over an hour in line at immigration – or you could sign up for Global Entry and be through in minutes.
Note that while children 12 years and younger can go through the TSA PreCheck lane as long as their parents have PreCheck, to use the Global Entry kiosks every person must be enrolled in Global Entry (including infants!). Fortunately, you can also use these credit card reimbursements to get your family members signed up for Global Entry.
Strategically time credit card applications to maximise benefits like the Southwest Companion Pass
The Southwest Companion Pass is one of the most amazing deals in travel: It allows you to designate one person who can travel with you on any Southwest ticket (whether you book it with cash or points) for just the cost of taxes and fees. To earn it, you have to accumulate 110,000 Rapid Rewards points in a calendar year (125,000 points starting in 2020); one received, it’s valid for the remainder of that calendar year and all of the following year.
What does this have to do with credit cards? Well, points earned from Southwest credit cards count toward the Rapid Rewards points required for the Companion Pass.
Chase offers three personal Southwest credit cards, and two business Southwest credit cards. If you were to open one personal card and one business card in November or December and make sure not to finish the minimum spending requirements until after January 1, you could receive enough points in January to receive a Companion Pass valid for two years!