Now Might Be the Best Time to Upgrade Your Travel Credit Card -- Here's Why

Upgrading sooner rather than later could save you hundreds.

After more than a year spent largely inside due to quarantine, people are finally feeling ready to hit the road -- or the sky -- again. As vaccinations become more widely available, you might be thinking about planning your first trip in a long time. Before you make any concrete plans, though, you might want to upgrade your credit card.

Whether you've got a basic no annual fee credit card or a popular middle-of-the-road travel credit card, it's worth considering an upgrade to a premium travel credit card if you plan to travel often in the future. Doing so now rather than later can save you money and help you stay protected on your trip. Here's how.

1. You'll earn more on prepaid travel expenses

Even if you aren't planning to travel until later in the year, you'll probably start booking flights and hotels fairly soon. If you plan to get a better travel credit card, it's smart to do so before you complete those bookings.

Chances are high that if you upgrade your travel credit card, you'll earn higher on travel purchases. For example, you might be earning 2x points per $1 on travel with your current card while the upgraded version earns 3x points per $1. By upgrading before you pay for your flights and hotels, you'll be able to take advantage of that higher earn rate.

Make sure to check the terms of the upgraded card before assuming you'll automatically earn more, though. Some cards only earn more on flights booked directly with the airline or through the credit card's travel portal, and you might not be planning to book your flights that way.

2. You can save up points now to spend on your next trip

The sooner you upgrade your credit card, the sooner you start earning more points or miles. If you want to use your travel rewards to save money on travel expenses for your upcoming trip, it's wise to start saving them up now.

If your card earns airline miles or hotel points, you'll want to start saving them up well in advance of your trip. This is because you can't book an award flight or award hotel stay until you have enough miles or points saved up in your account. That means you'll need to have enough saved up before you can even book your trip.

On the other hand, if your credit card earns flexible points, you might be able to get away with starting to save a bit later. You can use cash to purchase your flights and hotel room and use your credit card points for other travel expenses while on your trip.

Some travel credit cards let you use your points to book tours and other activities, for example, which don't necessarily need to be reserved as far in advance as flights and hotels. Others let you use your points after the fact to "erase" any credit card purchases coded as travel, so you don't actually have to have enough points saved up until after your trip.

3. You might get better travel insurance coverage

In many cases, the upgraded version of your travel credit card will offer better travel insurance. This could mean more protections, such as:

• Rental car insurance
• Trip cancellation insurance
• Lost baggage insurance
• Emergency medical insurance

It could also mean higher coverage limits. Either way, having better coverage can save you hundreds, if not thousands, on your trip in the event of an accident or unforeseen circumstances.

In almost all cases, you need to have booked your travel (flights and hotel) with the credit card to take advantage of that credit card's travel insurance benefits. This means that if you pay for your prepaid travel expenses with your current travel credit card and then get a better one, you'll only be covered by your current credit card's travel insurance policy.

4. You could get TSA PreCheck or Global Entry in time for your next trip

Many premium travel credit cards offer statement credits for the application fee you have to pay to get TSA PreCheck or Global Entry. But you'll want to apply as soon as possible. You'll probably be required to do an interview, and they're often booked up months out for those.

To take advantage of a TSA PreCheck or Global Entry statement credit benefit, you need to pay your application fee with the credit card that offers that benefit. Your application fee is paid upfront when you submit your initial application. So you'll want to have that credit card ready to go before you apply for TSA PreCheck or Global Entry. This means you'll probably want to upgrade now if your plan is to take advantage of that benefit.

5. You can take advantage of travel statement credits while booking your trip

A lot of premium travel credit cards with higher annual fees offer annual travel statement credits to offset that annual fee. These can be statement credits that cover any travel purchase, airline fee credits, or credits toward specific hotel properties.

If you plan to upgrade to a travel credit card that offers these statement credits, you'll want to do so before you book your upcoming trip. That way you can be sure that you'll take full advantage of this benefit.

Make sure the annual fee is worth upgrading

Despite all these lucrative perks and benefits, it might not be worth it for you to upgrade your travel credit card and pay a higher annual fee. When you compare credit cards, you'll want to do some math and figure out if your travel spending and the rewards you'll reap from it are enough to offset the card's annual fee.

If you do decide that an upgraded travel credit card is right for you, now's the time to upgrade. Doing so will help you maximize your credit card rewards while taking full advantage of the card's benefits.