June 5, 2012 at 8:27 AM ET
Travel is never cheap. One way to cut the high cost is to use a rewards credit card. A few of these cards are offering extremely high bonuses right now.
According to the 2012 Credit Card Landscape Report from the comparison site CardHub.com, the value of points and bonuses has increased by 20 percent from last year.
"People can essentially get $500 toward their next vacation, even if they're not a frequent traveler, by just signing up for the right credit card,” says Card Hub CEO Odysseas Papadimitriou.
Card Hub compared more than 1,000 offers to find the cards with the best bonuses. These three were standouts:
Chase Sapphire Preferred
Itoffers 40,000 bonus points, equal to $500 in airfare or hotel lodging, after you spend $3,000 during the first three months. Those bonus points can also be converted into a statement credit of $400. The annual fee of $95 is waived the first year. The Chase Sapphire Preferred does not charge a foreign transaction fee for purchases made outside the United States.
Hilton HHonors Surpass Credit Card
With this American Express card you get 40,000 bonus points after the first purchase and another 20,000 after you charge $3,000.Those 60,000 points will get you up to eight nights at a Hilton Hotel, Embassy Suites or Hampton Inn, or one night at a Waldorf Astoria Hotel & Resort. The annual fee is $75. There is a 2.7 percent foreign transaction fee.
British Airways Visa Signature Credit Card
Receive50,000 bonus miles after the first purchase. That’s enough for a round -trip international flight. You’ll also earn another 25,000 miles when you spend $10,000 during the first year and another 25,000 miles if you spend more than $20,000 in the first year. But wait, there’s more! Spend $30,000 in a given year and you’ll receive a Travel Together Ticket from British Airways good for two years.
NOTE: This is a smart card which makes it much easier to use outside the U.S. The annual fee is $95, but there are no foreign transaction charges.
Don't dismiss the British Airways card just because you don't fly the airline.
"The nice thing about British Airways is they have a partnership with American Airlines,” Papadimitriou explains. “You can transfer those points to American Airlines and use them for domestic travel awards.”
So why are these cards offering such huge bonuses?
"All of the issuers are aggressively going after people who have the lowest risk to the bank. And that’s people with good to excellent credit scores,” explains Bill Hardekopf, CEO of the site LowCards.com. “As a result, there's a tremendous amount of competition for those customers. And credit card issuers are dangling all sorts of perks in front of those specific customers."
Remember: Reward cards usually have higher interest rates than a traditional credit card. So don’t even consider getting one unless you will pay off your bill in full — and on time — each and every month.
If you carry a balance, then you want to shop for a credit card with the lowest interest rate you can find.
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