3 Tips to Know Before Applying for a Travel Credit Card Sign-Up Bonus

We shall not cease from exploration, and the end of all our exploring will be to arrive where we started and know the place for the first time. -- T. S. Eliot 

Many, if not most, people like to travel. If you do a lot of it, though, you might want to do so with a travel credit card, as that can offer some handy travel-related benefits. Better still, many travel credit cards offer hefty sign-up bonuses that can be worth hundreds of dollars. Keep the following tips in mind, though, as you review any travel credit card sign-up bonuses.

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Tip 1: Look beyond the bonus and make sure the card itself is great

Credit cards vary widely, and even among the best travel credit cards you'll find some differences worth considering.

Some travel credit cards are dedicated to one airline or one hotel company, offering benefits and rewards when you frequent that company. Others are broader, offering a range of travel-related benefits and rewards from a wide array of companies.

The best travel credit cards will have some or all of the following features:

• No annual fee. Most credit cards charge no annual fee, so it's not hard to meet this criterion. Sometimes, though, if a card clearly will deliver much more value than its annual fee costs, an annual fee can be worth it.
• No foreign transaction fees. Without this feature, if you spend money abroad or with a foreign-based retailer, you'll see currency-exchange-related fees on your statement. This is a common feature on travel-related credit cards.
• No penalty APR. A penalty APR is when card companies hike your interest rate, often to 25% or more, if you're late paying a bill. Plenty of cards don't have this feature, and it can be very dangerous if it's there, leading you deep (or deeper) into debt.
• Points or cash offered when you spend money on travel or restaurants. That can make your vacations a little less costly, as you can save when spending on airfare, hotels, car rentals, cruises, and more.
• Low interest rates, in case you end up carrying some debt for a short while.
• Some travel cards offer other perks, too, such as access to airport lounges, free bag checking on flights, priority boarding, and/or travel insurance.

Not every card will have every feature, but you may not need every one. See which features are most valuable to you and look for those in card contenders.

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Tip 2: Compare bonuses and find the best one for you

One of the best features of a travel credit card, and one they tend to be known for, is a sign-up bonus -- with the size of the bonus fluctuating over time.

For example, a certain card might offer a 25,000-point bonus for most of the year, but now and then will increase it to 35,000 or 50,000 for a while. Thus, for any travel credit card of interest, it's worth it to find out how big its bonus can get and whether its current bonus is big enough or might be increased in the near future. Bonuses are commonly in the 25,000 to 50,000 range, but you'll sometimes find ones for 75,000 or even 100,000 points. As an example, the Citi® Prestige card upped its bonus from 40,000 to 75,000 points this summer, for a limited time. 

Another consideration is your credit score, because many of the best credit cards out there, including ones with fat sign-up bonuses, tend to require a high credit score. For example, per the folks at creditcards.com, the Chase Sapphire Preferred® card requires excellent or good credit, while the Barclaycard CashForward™ World Mastercard® requires excellent credit. If your score isn't great, you might want to put in a little work to increase your credit score before applying for the card. What's a high credit score? Well, basic FICO scores, which are used by about 90% of top lenders, range from 300 to 850.

Here's how the folks at FICO rate the scores:

Source: MyFICO.com. 

When comparing different cards that offer enticing bonuses, look at the big picture. Card A might offer a one-time bonus worth $500 to you, but if its other features won't deliver much value, you might be better off with Card B, which offers a bonus worth $300 but also lets you earn lots of additional points each month with your regular spending. Different cards will offer different rates of points (or miles) earned when you spend, and some will give extra points for certain kinds of spending, such as on restaurants.

Look into how you can spend the points you accumulate, too. Will you be able to use them for booking hotel rooms and/or airfare -- and if so, at which hotels and/or airlines? Will you be able to use them for non-travel expenses, too? Think about the kind of spending you do and where you do that spending, and see which cards offer the most potential reward for you. If you don't fly too often, for example, but you travel a lot by car and frequently stay at Westin or Sheraton hotels, the Starwood Preferred Guest Credit Card from American Express might serve you better than an airline's credit card.

Image source: Getty Images.

Tip 3: Follow the rules to get that bonus

Once you find the perfect card for your travel-related needs, one that also offers a hefty sign-up bonus, your work isn't done. Remember that to actually collect that bonus, you will probably have to meet some terms -- for example, you might need to spend $3,000 or $5,000 within the first few months of owning the card. Lately, some high-end cards have been raising the required spending sums -- for example, the Citi® Prestige card's 75,000 points are only available ifyou spend $7,500 in the first three months. 

Keep up with your card's rules, too, as they can change over time. For example, cards will sometimes change the value of the points you've accumulated. As an illustration, in 2014, Southwest Airlines increased the points you needed to redeem for a dollar of value from 60 to 70. So if you had accumulated 60,000 points, which would have been worth $1,000 of value, they would be worth only $857 after the switch.

Don't just sign up for and use any credit card just because it offers a sign-up bonus. By applying a little strategy and choosing carefully, you might earn hundreds of dollars' or more in points or miles.