Your money act now to nab a free spring break trip

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With massive travel reward point bonuses on the table this fall, consumers who sign up for a new credit card could be flying free for spring break. But if you are like most people, you will file this information away in the back of your mind and forget to act on it until it is too late. A new data analysis by the consumer website has found that 83 percent of consumers apply for credit cards at the wrong time. That leaves 15,338 miles on the table, or about $177. Pro tip: You need about five months' lead time. So if you want to travel over spring break in March or April, get a new card by October or November (for the full table, see Reuters spoke with Nerdwallet's credit card expert Sean McQuay about the ins and outs of applying for new credit cards and how to maximize the benefits. Q: Your study works out the best time to get a new credit card. How do you figure this out?A: Consumers need to give themselves enough lead time to meet the spending requirements, get the points loaded into the account and then book the travel with reasonable notice. What we did was we took a large number of cards and tracked the signup bonuses, and noted the bump when there was a special. Q: How are people missing this window?

A: The biggest thing is they are not planning signups in advance. They may have received a mailer or saw an ad online, and then they sign up right then. I can't blame people for that because nobody had done a timeline analysis before. General travel cards give the best offers in November, but the majority of signups peak in summer time - April through August. That's telling me that they see these cards and say, I want to travel, but by that point it's far to late to fund that summer's travel. Q: You also have done an analysis of the relative value of cash-back cards versus travel reward cards. Which is better?A: The break-even was $8,600 worth of travel in a year.

So this is where it gets interesting; if less than that, you'd do better with cash-back without an annual fee. But the mental benefit of getting free travel is huge. Q: A new card on the market - the Chase Sapphire Reserve- is offering 100,000 reward points, but comes with a hefty annual fee of $450. Is this a game-changer?A: I've never seen 100,000 before. The highest I've seen was Chase Sapphire Preferred with an $800 sign-up bonus, which was available during two short-term offers. But this is 100,000, which is valued at $1,500. I do think it's part of a larger trend. But it takes months, if not years, to spin out a new product. Existing players would need to do a lot of work to keep up. 

Q: Is there any sort of financial detriment to signing up for many cards, just to glean the rewards?A: It hurts your credit score less than you think to sign up for a card and then cancel it. (NOTE: make sure cancelling doesn't delete your points)There's also a 5/24 rule at some banks, which means that if you've signed up for five cards in the last 24 months, it's an automatic decline. You can also sometimes transfer a card to a lesser version that would not have an annual fee. I just did this myself. Q: What about the moral hazard of just continually signing up for cards?A: I feel bad for signing up for a card just for short-term benefit. I know that's a silly feeling to have, but I feel like being an honest consumer, you do not sign up for credit. But it is not like banks are trying to clamp down. And in a way, they are encouraging it by offering richer short-term rewards rather than long-term. That's an argument for go ahead and sign up.