Despite quarantine, travel credit cards are ramping back up - Business Insider - Business Insider

Despite quarantine, travel credit cards are ramping back up - Business Insider - Business Insider


Despite quarantine, travel credit cards are ramping back up - Business Insider - Business Insider

Posted: 06 Oct 2020 07:28 AM PDT

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When the realities of the COVID-19 pandemic started to set in this year — travel bans, 14-day quarantines, and canceled business trips — one big question loomed over both the financial industry and points and miles lovers: Would the shutdown also shutter the rewarding world of travel credit cards?

At first, it seemed like the answer could be yes, as lucrative credit card sign-up bonuses dwindled and companies rushed to add non-travel options for using credit card points. But as 2020 winds down, record-high welcome bonuses on the Chase Sapphire Preferred® Card and Capital One® Venture® Rewards Credit Card, plus a new announcement from American Express, are offering a sense of reassurance.

Annual Fee

$95

Regular APR

17.24% to 24.49% variable

Credit Score

Good to Excellent

Editor's Rating

Featured Reward

50,000 miles once you spend $3,000 on purchases within 3 months from account opening

Intro APR

N/A
Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.
  • Details
  • Pros & Cons
  • Annual Fee: $95
  • Regular APR: 17.24% - 24.49% (Variable)
  • Sign-Up Bonus: Earn 50,000 Bonus Miles once you spend $3,000 on purchases within the first 3 months from account opening
Pros
  • Annual fee waived the first year
  • No bonus categories to keep track of
  • Includes up to a $100 statement credit for Global Entry or TSA PreCheck
Cons
  • Other credit cards offer higher rewards in certain categories of spending
Read Our Review Read Our ReviewA looong arrow, pointing right

Credit card travel offers are picking up

At the end of September, Amex rolled out a range of very attractive new perks for its members including 22% off airfares on select domestic flights booked through Amex Travel before March 31, $150 back for members of The Platinum Card® from American Express who meet spend thresholds on prepaid Fine Hotels + Resorts bookings, 40% bonus for transferring Membership Rewards to Hilton Honors or Marriott Bonvoy and a number of other savings for getting out to see the world. 

So, is travel back?

Well, no. The news of aviation job losses and foreclosures in the hotel industry point to the continuing pains stinging the travel industry. However, travel is starting to slowly recover, and there are no bigger cheerleaders for the travel industry than the big names in credit cards.

Simply put, traveling means spending, and spending means fees for the banks that issue these cards. 

"Travel is immensely important for the credit card industry," Alex Miller, founder and CEO of UpgradedPoints.com, says. "Take for example Amex's Platinum line of cards. One of the biggest benefits of these cards is the Centurion Lounge access, and if cardholders can't access one of the primary benefits, they are likely to cancel the card in favor of a cheaper or more useful option."

Rather than risk seeing cancellations (the The Platinum Card® from American Express has a hefty annual fee of $550), Miller believes that Amex's move to enhance the card's travel features shows that the company is placing a "huge bet" on its travel cards. There's good news for consumers: Amex isn't going to be the only player at the table. 

Annual Fee

$550

Regular APR

See Pay Over Time APR

Credit Score

Excellent

Editor's Rating

Featured Reward

60,000 points after your spend at least $5,000 in your first 3 months of account opening

Intro APR

N/A
Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.
  • Details
  • Pros & Cons
  • Earn 60,000 Membership Rewards® Points after you use your new Card to make $5,000 in purchases in your first 3 months.
  • Enjoy VIP status and up to $200 in Uber savings on rides or eats orders in the US annually. Uber Cash and Uber VIP status available to Basic Card Member only.
  • Earn 5X Membership Rewards® Points for flights booked directly with airlines or with American Express Travel. Starting January 1, 2021, earn 5X points on up to $500,000 on these purchases per calendar year.
  • 5X Membership Rewards® Points on prepaid hotels booked on amextravel.com.
  • Enjoy access to the Global Lounge Collection, the only credit card airport lounge access program that includes proprietary lounge locations around the world.
  • $200 Airline Fee Credit, up to $200 in statement credits per calendar year in baggage fees and more when you select one qualifying airline.
  • Get up to $100 in statement credits annually for purchases at Saks Fifth Avenue on your Platinum Card®. That's up to $50 in statement credits semi-annually. Enrollment required.
  • $550 annual fee.
  • Terms Apply.
Pros
  • Long list of travel benefits, including airport lounge access and complimentary elite status with Hilton and Marriott
  • Annual statement credits with Saks and Uber
Cons
  • Bonus categories leave something to be desired (no bonus rewards on general travel or dining)
  • One of the highest annual fees among premium travel cards
Read Our Review Read Our ReviewA looong arrow, pointing right

"Other issuers will certainly follow suit, and each card company has their own suite of benefits they can enhance," Miller says. "For example, Chase can offer similar statement credits and discounts through their own travel portal and hotel programs. With card companies, it is often a monkey see, monkey do process. When one issuer enhances their line of products, it makes other card issuer's products less valuable and they need to catch up."

Watch out for small and under-the-radar enhancements, too. For example, Chase just added a 20% bonus for transferring Ultimate Rewards points to Southwest's Rapid Rewards program that is good through October 31. While that may not sound like a huge headline, Chase rarely offers transfer bonuses. It's a reminder that even small perks can make a big difference for certain cardholders. 

What about sign-up bonuses?

New perks from Chace and Amex certainly pay for existing cardholders, but what about the audience that banks are still trying to attract? This is typically the sweetest spot. Banks dangle a big sign-up bonus in front of your eyes, and your next few months of spending helps you see a deposit of tens of thousands of points in your rewards account. You use those points to take a trip, but the bank scores a victory, too, if you continue to use that card regularly.

 We're already seeing some record-setting activity with the 80,000-point sign-up bonus for the Chase Sapphire Preferred® Card, and that kind of offer leads Brett Holzhauer, a reporter at Forbes Advisor, to declare that "right now is the time to sign up for cards to earn sign-up bonuses."

Annual Fee

$95

Regular APR

15.99%-22.99% Variable
Credit Score
Good to Excellent
Editor's Rating
Featured Reward
80,000 points
Chevron iconIt indicates an expandable section or menu, or sometimes previous / next navigation options.
  • Details
  • Pros & Cons
  • Earn 80,000 bonus points after you spend $4,000 on purchases in the first 3 months from account opening. That's $1,000 toward travel when you redeem through Chase Ultimate Rewards®.
  • 2X points on travel and dining at restaurants worldwide, eligible delivery services, takeout and dining out & 1 point per dollar spent on all other purchases.
  • Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase Ultimate Rewards. For example, 80,000 points are worth $1,000 toward travel.
  • Get unlimited deliveries with a $0 delivery fee and reduced service fees on orders over $12 for a minimum of one year on qualifying food purchases with DashPass, DoorDash's subscription service. Activate by 12/31/21.
  • Earn 5X points on Lyft rides through March 2022. That's 3X points in addition to the 2X points you already earn on travel.
Pros
  • High sign-up bonus starts you off with lots of points
  • Strong travel coverage
Cons
  • Doesn't offer a Global Entry/TSA PreCheck application fee credit or any other statement credit benefits
Read Our Review Read Our ReviewA looong arrow, pointing right

"Card issuers have purchased billions of dollars worth of rewards from travel providers [such as] Delta and Hilton," Holzhauer says, "and with overall spending down, they are ready to make significant welcome offers to entice new card signups."

Miller points out that the current market conditions — high unemployment numbers and serious concerns about economic catastrophe as the virus continues to spread — mean that making those welcome offers is a delicate balancing act for banks. 

"Sign-up bonuses are in an interesting predicament right now," Miller says. "On one hand, banks want to conserve cash as folks get laid off [or] default on loans. On the other hand, it's a great method to captivate an audience that may want to apply for a new credit card, for any number of reasons."

Miller says that if he was a consumer looking at the Chase Sapphire Preferred® Card, he wouldn't wait to apply (it doesn't seem likely to see a sign-up bonus even bigger than the 80,000 mark). However, he highlights that the waiting game can be a winning game as well. 

"Don't be surprised to see even better offers come to the market because travel confidence is going to take a long time to restore to pre-pandemic levels," Miller says. "The issuers need to make up for lost time this year and bring on new customers during these tough times."

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

Business Insider may receive a commission from The Points Guy Affiliate Network, but our reporting and recommendations are always independent and objective.

Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.

Disclosure: This post is brought to you by the Personal Finance Insider team. We occasionally highlight financial products and services that can help you make smarter decisions with your money. We do not give investment advice or encourage you to adopt a certain investment strategy. What you decide to do with your money is up to you. If you take action based on one of our recommendations, we get a small share of the revenue from our commerce partners. This does not influence whether we feature a financial product or service. We operate independently from our advertising sales team.

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