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After a long downturn, travel is picking up again this summer — and credit card companies are taking note.
Just as Americans have begun returning to the skies and hitting the road this summer, inflation continues to push prices to all-time highs. So even though there’s plenty of demand for travel, the prices of flights, gas, and other elements of the experience — along with everyday goods and services — are driving up the prices of summer vacations.
But over just the past few months, we’ve seen plenty of new perks and benefits from travel card issuers, from new partnerships to 100,000-point welcome bonuses and rewards categories personalized to your spending habits, as issuers vie for a spot in your wallet to help save money on flights and hotel stays this summer.
We spoke to experts across the travel and credit cards industry to find out what trends they’re seeing this summer, and the advice they want you to know before you book your next trip:
Travel Is Making a Comeback
As of April, travel spending surpassed pre-pandemic levels for the first time, according to the U.S. Travel Association, reaching 3% above 2019 spending.
And the numbers are expected to continue increasing. Travelers will take an average of two trips this summer alone, the 2022 Deloitte summer travel survey found, and 46% of Americans are planning a trip that includes a hotel stay or other lodging this year.
“There’s no doubt that travel is back,” adds Jason Steele, a credit card writer and industry expert. “And the trend in travel right now is both domestic and leisure ahead of business and international.”
Some travelers are sticking to domestic travel to avoid remaining COVID restrictions and stretch their dollars further with road trips, cheaper flights, and staycations, Murphy adds.
In fact, among those not traveling this year, financial reasons were the most-cited key concern, the Deloitte survey found. At 44%, “concern about finances” was the top reason for not traveling, a 13% increase from last year.
Travel Credit Cards Are Changing
With more people traveling and prices rising across the board, credit card issuers are trying to keep up with consumers looking to save money on their next trips. Here are a few trends experts say you can expect to continue this summer:
Bigger Welcome Bonuses
After years of pulling back on once-massive sign-up bonuses, some credit card issuers are using sky-high welcome bonuses to attract new cardholders.
For example, the Capital One Venture Rewards Card’s 75,000-mile bonus offer after spending $4,000 on purchases within three months and when the Capital One Venture X Rewards Credit Card launched earlier this year, it initially had a 100,000-mile bonus, which has since been reduced to 75,000 miles after spending $4,000 on purchases in the first three months.
Just make sure you consider any card’s value as a whole before you jump on a big bonus. You’ll want to make sure the card’s ongoing rewards align with your spending so you can maximize your value long-term, too — especially if the card has an annual fee.
Another way issuers are innovating is by personalizing credit cards to match cardholders’ spending habits, says Farnoosh Torabi, host of So Money podcast and CNET money editor at large. Like NextAdvisor, CNET is owned by Red Ventures.
In the past and even still today, the most common bonus rewards categories range from travel to everyday expenses, like groceries and gas. But now, there are more unique ways to earn bonus rewards, experts say: including cryptocurrency rewards and earning on monthly rent payments.
“I think it’s an interesting time for consumers because you have a lot of choices,” says Torabi.
Even with all of the new categories, inflation and other economic factors mean consumers are still increasingly interested in everyday rewards on their most frequent spending, experts say. For example, gas is one category that Beverly Harzog, a credit card expert and consumer finance analyst for U.S. News & World Report, says consumers are starting to become more interested in, as an essential expense and for summer travel.
Before you open any new credit card, look at where you spend most, and make sure the card’s highest rewards categories align with your spending. New rewards options may make it easier to maximize categories you never could before, but if you’re still spending most of your monthly budget on groceries, dining, gas, or another common category, you’ll get the most value from a card that matches.
Co-Branded Travel Credit Cards
Some issuers are also investing in the travel spike with more co-branded cards, says Steele, and upgrading benefits on existing cards.
For instance, three Southwest Rapid Rewards credit cards recently got new welcome bonuses, worth 75,000 miles which also count toward the airline’s Companion Pass. And earlier this year, the United Club Infinite Card from Chase became one of only a few cards with a 100,000-mile welcome offer (currently, 80,000 bonus miles).
Co-branded cards have some great benefits, and can help you easily score free flights or stays with your favorite airlines and hotels, but remember: these credit cards only work in your favor if you have a strong preference for the brand. You’ll earn rewards each time you stay with the hotel or book a flight with the airline, and benefit from added perks with the brand, like discounts and easier paths to elite status. Otherwise, you’re probably be better off with a more flexible travel card to get the best deal regardless of the brand.
Practice Good Credit Habits
Travel cards can help cut down the cost of a summer vacation, but they also carry high interest and often annual fees, which means its even more important to spend only what you can afford to pay off and practice good credit habits.
“I’ve always told people to use your credit card as a method of payment, not a means of finance,” says Steele. The best way to avoid interest is to pay your bill in full and on time each month, and don’t charge more than you can afford to your card
People are ready to enjoy movies, concerts, live entertainment, and travel, Torabi says. If you can, use a credit card when you purchase tickets for travel and purchase protections — as long as you can pay the balance off when your statement is due.
That’s especially true as inflation causes prices and interest rates to rise — don’t risk taking on increasingly high interest debt balances, which can quickly wipe out any savings you’ll get on your vacation from your card’s rewards.
“Your goal during inflationary periods is to decrease what you’re having to pay for goods and services,” says Harzog, not add to the cost with interest. “Have a budget, track your spending, and use credit cards at the right time for the right purchases.”
More Ways to Save on Summer Travel
Even if you’re not ready to open a new card account and take advantage of evolving travel rewards, there are still ways to cut summer travel costs. Here’s how you can reduce the price of your vacation using cards already in your wallet and other savings tactics:
Use Your Rewards
If you’ve been stockpiling rewards on a card you already own, they’ll come in handy to offset increasingly expensive travel costs.
Higher demand and inflation now mean that a round trip domestic flight can cost an average of $360 this summer, and an average of $940 round trip internationally, according to Hopper’s latest Consumer Airfare Index Report.
Fortunately, if you’ve been saving rewards or you recently earned points from a big welcome bonus, you can use those points or miles to offset rising costs.
The best way to use your rewards is to book flights, says Murphy, adding “especially when the prices are going through the roof like they are with airfare.”
Keep in mind though, if you typically book through a third-party travel website to get a better deal, you likely won’t be able to use your credit card rewards. To pay with points or miles, you’ll need to book directly through your airline or hotel or your issuer’s rewards portal, depending on your card.
But inflation is impacting rewards, too. Most airlines and hotels have dynamic pricing, meaning that as prices go up, the number of points you need to book an award night or award flight does, too.
Another caveat: you generally can’t use your points to book Airbnbs and other vacation rentals, which are becoming increasingly popular options for travelers. “You’re seeing a massive boom in the vacation rental market, which credit card companies really provide no value in terms of booking,” says Murphy.
One exception is Chase’s Pay Yourself Back program, which currently offers boosted rewards when you use points toward Airbnb purchases you make with a Chase Sapphire Preferred Card or Chase Sapphire Reserve.
Traveling on a Budget Without Rewards
Even without using points and miles, you can find more creative ways to save on travel.
“Stay away from heavy travel times,” Murphy says, suggesting waiting until September to take advantage of price cuts after kids go back to school.
Instead of booking this summer, go on vacation between September and November — before Thanksgiving. Throughout the year, it’s best avoid holidays to save money. You also may choose destinations less inundated with travelers, or try a different type of vacation, such as an RV rental or road trip.
If you’re really struggling to finance a trip without taking on debt or spending more than you can afford, you might also consider putting off travel for a bit — especially if you already have existing high interest debts.
Harzog suggests free community events before paying for things, or looking at in-state vacation destinations to cut costs.