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Credit Cards

Beach rentals in the U.S. can easily cost more than $800 per week—how a travel-rewards welcome bonus can help you save this summer

Here's how the right credit card welcome bonus can help cover the cost of your summer vacation when you redeem the rewards for travel.

stevendocwra | Moment | Getty Images

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:

American Express® Gold Card

On the American Express secure site
  • Rewards

    4X Membership Rewards® points at Restaurants (plus takeout and delivery in the U.S.) and at U.S. supermarkets (on up to $25,000 per calendar year in purchases, then 1X), 3X points on flights booked directly with airlines or on amextravel.com, 1X points on all other purchases

  • Welcome bonus

    Earn 60,000 Membership Rewards® points after you spend $6,000 on eligible purchases with your new Card within the first 6 months of Card Membership.

  • Annual fee


  • Intro APR

    Not applicable

  • Regular APR

    See Pay Over Time APR

  • Balance transfer fee


  • Foreign transaction fee


  • Credit needed


  • See rates and fees, terms apply.


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:

  1. Sign up for the rewards credit card of your choice. (Typically, you need good to excellent credit to qualify.)
  2. Meet the minimum spending requirement (often between $1,000 to $4,000 over three to 12 months).
  3. 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).
  4. 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.

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.

Editorial Note: Opinions, analyses, reviews or recommendations expressed in this article are those of the Select editorial staff’s alone, and have not been reviewed, approved or otherwise endorsed by any third party.
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