Rewards credit cards are a great way to save money and get some incredible bonuses. But did you know you could be shortchanging yourself by signing up at the wrong time? A new study conducted by personal finance education site Nerd Wallet found that too many of us are leaving behind more than 15,000 travel rewards points that could be ours for the taking. You wouldn’t turn down hundreds of dollars in free hotel stays, would you? Well that’s exactly what you’re doing when you don’t sign up at the right time. Here’s the ideal time to grab up those sweet travel rewards, according to Nerd Wallet.
Use the five-month rule
Apply for a travel reward card a minimum of five months before you plan to travel so you can take advantage of your sign-up bonus. The experts recommend at least five months since getting approved for the card could take up to two weeks and most credit and card issuers give you three months to qualify for the bonus. You want to give yourself enough time.
Pay attention to time-limited offers
Nerd Wallet’s Erin El Issa says issuers advertise special bonus offers, but only for a brief time. You’ll have to act fast if you want to take advantage. “Credit card issuers put out limited-time offers — temporarily increased sign-up bonuses — on their travel cards, sometimes once or twice per year,” said Issa. The Nerd Wallet report estimated these offers ranged anywhere from 5,000 to 50,000 points above the typical sign-up bonus.
- August: August is the best time of year to receive limited-time offers for hotel rewards cards. However, most consumers are missing out because they tend to apply for hotel reward cards in April.
- November: Wait until November to snatch up limited-time offers for general travel rewards cards. November is also your month for limited-time airline rewards card offers. The report found that many consumers were missing the mark by several months, applying for these cards in July and January.
Know when to apply for co-branded versus issuer-branded cards
The best times to take advantage of special bonus offers varies depending on whether you’re applying for a co-branded or issuer-branded rewards card. A co-branded credit card typically features the name of a certain company (an airline or hotel chain, for example), and the card is issued by a bank as part of a partnership with that company. A credit card that is issuer-branded does not have any partnerships, and you’ll only see the issuer’s name on the card.
- August: August is your month if you’re applying for a co-branded card. This is the month when you’re most likely to get in on the action when it comes to time-limited offers.
- November: The month of November is best for non-co-branded cards. This is when you’ll see the most limited-time offers for this particular segment.
The best time to apply for Chase, Citi, and American Express
The study found that all three were most likely to offer increased sign-up bonuses in late summer and in the fall.
- Chase: August and November
- Citi: October and November
- American Express: August and September
“When only 17% of applications were during limited-time-offer months, it’s clear that the best time to apply for the cards we analyzed was never the most popular time to apply. Moral of the story? To get the best deals, try to plan ahead and apply during the off season — like in the late summer and fall.” said Nerd Wallet’s Credit Card Expert Sean McQuay.
Don’t let rewards go to waste
No matter how savvy you are when it comes to planning when to sign up for a rewards credit card, it won’t make a difference if you don’t use your benefit. Personal finance expert Gerri Detweiler reminds consumers to use it or lose it. “If you’ve earned them, use them. I once had an Alaska Airlines card that I earned enough miles on to take a trip to Alaska to visit my sister. The only problem was she had moved. And this was before those miles were as flexible as they are today. I ended up letting them expire, so it was a total waste,” Detweiler told The Cheat Sheet.