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With Americans beginning to dream of post-pandemic life, many consumers are on the lookout for safe ways to vacation this summer.
While rental car prices have skyrocketed, a family beach getaway can still be an affordable way to enjoy some much-needed leisure this summer — so long as you act quickly.
An analysis from Key Data, a market data company for the short-term rental industry, shows that occupancy rates for vacation homes are increasing across nearly every U.S. region and are on track to outpace 2019 by upwards of 13%.
Meanwhile, data from vacation rental software company iGMS shows the average nightly rate for U.S. vacation rentals increased during 2020, reaching a peak average nightly cost of $202.50 in July 2020.
Currently, sites like Value Penguin and AllTheRooms show the average price of a U.S. vacation rental to be $141 per night (hotel) and $171 per night (Airbnb). This means a five-night stay at your destination of choice could easily cost an estimated $855 for lodging alone.
To help you see how a welcome bonus from a new credit card could help you offset this cost, we've done the math to show you what each bonus could cover for a hypothetical vacation. We selected cards from our list of the best travel rewards credit cards along with our current list of travel cards with big welcome bonuses.
A detailed look: How much can a travel card save you on an upcoming beach rental?
There are a few ways that card issuers let cardmembers redeem points for travel. Some simply let you redeem them for a statement credit on your balance, others have a program that allows you to "erase" travel purchases with points when you pay your bill. Still others give you a better return on your rewards if you book travel through a designated online portal.
You might also be able to use your points to buy gift cards, but that usually isn't the most cost-effective redemption option.
In each of the examples below, we did the math assuming the cardmember used the redemption option with the highest value.
Travel credit cards with big welcome bonuses
Here are Select's top-ranked travel credit cards:
- Winner: American Express® Gold Card
- Runner-up: Capital One Venture Rewards Credit Card
- Best welcome bonus: Chase Sapphire Preferred® Card (see rates and fees)
- Best for luxury travel: Chase Sapphire Reserve® (see rates and fees)
- Best for low interest: TD First Class℠ Visa Signature® Credit Card
The American Express Gold Card is great for earning valuable Membership Rewards® points at restaurants worldwide and U.S. supermarkets. Membership Rewards® points transfer to many of the top airline and hotel loyalty programs, which makes this card one of the best options for earning travel rewards.
- You can earn $400+ in dining and rideshare credits every year (Enrollment required for select benefits mentioned)
- Exceptionally rewarding for eligible restaurant and U.S. supermarket purchases
- No foreign transaction fees
- Large annual fee
- Credits are more complicated, you earn them monthly or semi-annually
- Spending caps on the top bonus categories
Highlights
Highlights shown here are provided by the issuer and have not been reviewed by CNBC Select's editorial staff.
- You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $8,000 in eligible purchases on your new Card in your first 6 months of Card Membership. Welcome offers vary and you may not be eligible for an offer. Apply to know if you're approved and find out your exact welcome offer amount – all with no credit score impact. If you're approved and choose to accept the Card, your score may be impacted.
- Earn 4X Membership Rewards® points per dollar spent on purchases at restaurants worldwide, on up to $50,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 4X Membership Rewards® points per dollar spent at US supermarkets, on up to $25,000 in purchases per calendar year, then 1X points for the rest of the year.
- Earn 5X Membership Rewards® points on prepaid hotel stays booked through AmexTravel.com or the Amex Travel App™.
- Earn 3X Membership Rewards® points on flights booked through AmexTravel.com, the Amex Travel App™, or purchased directly from airlines.
- Earn 2X Membership Rewards® points on prepaid car rentals booked through AmexTravel.com or the Amex Travel App™ and cruises booked and paid through AmexTravel.com.
- Earn 1X Membership Rewards® point per dollar spent on all other eligible purchases.
- Pay It® lets you tap in the American Express® App to quickly pay for small purchase amounts throughout the month and still earn rewards the way you usually do. Plan It® gives you the option to split up big purchases into equal monthly payments with a fixed fee. You'll know upfront exactly how much you'll pay.
- $120 Dining Credit: Earn up to a total of $10 in statement credits monthly when you pay with the Gold Card at Grubhub (including Seamless), Buffalo Wild Wings, Five Guys, The Cheesecake Factory, and Wonder. This can be an annual savings of up to $120. Enrollment required.
- $100 Resy Credit: Get up to $100 in statement credits each calendar year at over 10,000 qualifying U.S. Resy restaurants after you pay for eligible purchases with the American Express® Gold Card. That's up to $50 in statement credits semi-annually. Enrollment required.
- $84 Dunkin' Credit: Earn up to $7 in monthly statement credits after you pay with the American Express® Gold Card at U.S. Dunkin' locations. Enrollment required.
- $120 Uber Cash on Gold: Enjoy up to $120 in Uber Cash annually with your Gold Card. Just add your Card to your Uber account and you'll get $10 in Uber Cash each month to use on orders and rides in the U.S. when you select an Amex Card for your transaction.
- Enjoy complimentary Hertz Five Star® Status benefits like skipping the counter at select locations, adding an additional driver at no additional cost*, and vehicle upgrades**. Benefit enrollment and Hertz Gold+ registration are required. *Additional drivers must meet standard rental qualifications and must be a spouse or domestic partner to qualify as complimentary. Other additional drivers subject to fees. **Benefits are subject to availability and vary by location. Additional Hertz program Terms and Conditions including age restrictions apply.
- Book two nights or more with The Hotel Collection through AmexTravel.com and receive a $100* credit towards eligible charges at over 1,300 upscale hotels worldwide.§ *Eligible charges vary by property.
- Book your travel through the Amex Travel App™ with added peace of mind – backed by American Express® service and support. Only for American Express® Card Members.
- Whenever you need us, we're here. Our Member Services team will ensure you are taken care of. From lost Card replacement to statement questions, we are available to help 24/7.
- No Foreign Transaction Fees.
- Annual Fee is $325.
- Terms Apply.
- See Rates & Fees
Foreign transaction fee
None
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How to earn a welcome bonus and save up to $900 on your next vacation
Signing up for the right welcome bonus can save you $250 to $900, which can help cover a big chunk of your next beach vacation rental.
Here's how you earn a new credit card welcome bonus:
- Sign up for the rewards credit card of your choice. (Typically, you need good to excellent credit to qualify.)
- Meet the minimum spending requirement (often between $1,000 to $4,000 over three to 12 months).
- Upon meeting the minimum spend requirement, wait up to two billing cycles for the bonus to show up in your account (this may be automatic, but give yourself about 30 to 60 days to be safe).
- Redeem the bonus to cover travel purchases.
Bottom line
Travel credit cards typically have the highest APR — something to note if you plan on redeeming a new welcome bonus to cover vacation cost.
Avoid overspending when trying to meet the minimum spending requirement to earn a welcome bonus. Travel points are an alluring perk to many of the best rewards credit cards, you aren't saving any money if you get stuck paying interest on a too-high credit card balance
Before you sign up for a new card, it's important to make sure you can pay off your balance on time and in full each month.
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Our methodology
To determine which cards will put the most money back in your pocket, Select evaluated 35 popular travel credit cards offered by major banks, financial companies and credit unions that allow anyone to join. We compared each card on a range of features, including travel rewards (points and miles), annual fee, welcome bonus, introductory and standard APR, one-time perks, annual perks, redemption rates, as well as factors such as required credit and customer reviews when available.
Select teamed up with location intelligence firm Esri. The company’s data development team provided the most up-to-date and comprehensive consumer spending data based on the 2019 Consumer Expenditure Surveys from the Bureau of Labor Statistics. You can read more about their methodology here.
Esri’s data team created a sample annual budget of approximately $22,126 in retail spending. The budget includes six main categories: groceries ($5,174), gas ($2,218), dining out ($3,675), travel ($2,244), utilities ($4,862) and general purchases ($3,953). General purchases include items such as housekeeping supplies, clothing, personal care products, prescription drugs and vitamins, and other vehicle expenses.
We then estimated how much the average consumer would redeem over the course of a year, two years and five years, assuming they would attempt to maximize their rewards potential by earning all welcome bonuses offered and using the card for all applicable purchases. All rewards total estimations are net the annual fee and assume that you are paying your credit card balance on time and in full each month so as not to incur interest charges.
It’s important to note the value of a point or mile varies from card to card and based on how you redeem them. When we calculated the estimated returns, we assumed that cardholders are redeeming points/miles for a typical maximum value of 1 cent per point or mile. (Extreme optimizers might be able to achieve more value.)
Our final picks are weighted heavily toward the highest five-year returns, since it’s generally wise to hold onto a credit card for years. This method also avoids giving an unfair advantage to cards with large welcome bonuses.
While the five-year estimates we’ve included are derived from a budget similar to the average American’s spending, you may earn a higher or lower return depending on your travel habits.
For rates and fees of the American Express® Gold Card, click here.
