While credit cards are often more closely associated with spending and debt than savings, finding the right one can help lower the financial burden of any upcoming summer plans. And even though the country’s emergence from the Great Recession might allow you to feel comfortable splurging a little once again, saving should always be a top priority.
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Plus, with fuel prices rising—the U.S. Energy Information Administration predicts regular gas will average $3.75 this summer, up 36 percent from last year—travel should be fairly costly whether you fly or drive. With that being said, it’s sure a good thing that credit cards can literally help you save hundreds of dollars regardless of your mode of transportation.
1. One-time reward bonuses
Many credit cards provide one-time reward bonuses lucrative enough to score you a free flight or hotel room. However, as most of these offers are contingent on you spending a certain amount of money within the first couple months, you might think it’s too late to take advantage of one this summer. Think again. Take the Chase Sapphire Preferred Card, for example.
While it is true that you won’t get the 50,000 bonus points this card offers until you’ve spent $1,000 in the first three months, these points can be redeemed for cash at a rate of 1 percent after they eventually post to your account. Therefore, by applying for and opening your Chase Sapphire Preferred card, using it for your trip, and then later redeeming the points for cash, you can effectively save $500 on your summer vacation. Another card that allows you to charge the cost of your trip first and redeem your rewards later is the Capital One Venture Rewards Card, which provides 25,000 bonus miles after you spend $1,000 during the first three months your account is open. This means you have an extra $250 with which to subsidize your travel expenses.
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2. No foreign transaction fee credit cards
Just over 90 percent of all credit cards charge 3 percent foreign fees for transactions processed outside the United States, according to CardHub.com data. However, more and more credit card companies are starting to offer no international fee credit cards that allow you to spend overseas at no extra charge. So if you’re traveling abroad this summer, make sure to get one of these cards. (How to Save Money When You Fly)
3. Gas-oriented credit cards
If you’re driving to your vacation destination, a credit card with gas rewards can help you save as much as 5 percent on one of your trip’s biggest expenses. However, to select the right card, you must think beyond your travels. A gas rewards credit card has the potential to help you save not only on your trip but for a long time afterward as well, so you must consider your typical pump habits in order to decide whether to get a credit card with as much as 3 percent cash back on gas purchased anywhere or a credit card tied to a particular chain of gas stations, which provides up to 5 percent cash back, but only on gas purchased at affiliated stations. If you don’t already fill up primarily at a single chain, go for the generic rewards, because changing consumption habits is typically difficult.
Odysseas Papadimitriou is chief executive of CardHub.com, one of the nation’s leading credit card comparison websites.