Why consumers don’t use travel credit cards
CreditCards.org surveyed over 1,000 adults across the U.S. and found that nearly 4 in 5 didn’t own a single travel rewards credit card. The majority of those were aged 65+ (80%) and 55-64 (78%), with nearly 60% of people aged 25-34 that didn’t own a travel rewards credit card.
The survey also asked why they chose not to own a travel rewards card. Nearly 38% of people said they don’t travel enough to make them worth it and 29% said they already own enough credit cards. Almost 20% of respondents said they don’t believe in credit cards and only about 10% said they don’t understand how they work.
Understanding how travel rewards credit cards work is the key to maximizing the benefits and figuring out how you can start traveling for free. Once you start racking up your free travel rewards, you can start traveling more, which earns you more free rewards and the cycle continues!
How travel rewards credit cards work
Most travel credit cards give consumers a certain number of points for each dollar they charge to the card. Typically, it’s a 1:1 ratio, although many rewards cards offer additional miles for spending in certain categories, like gas or groceries, or at specific stores.
Racking up travel card rewards is a bit complex because the process involves converting dollars spent into points, but in general, the more you spend on your credit card, the more points you earn. The CreditCards.org study found that almost 78% of consumers charge less than $10,000 a year on their travel rewards cards, although this number could reflect the high number of respondents who didn’t own a travel rewards card at all.
Once you earn your travel rewards, you have to be careful not to lose them – there are some inadvertent ways they can accidentally be forfeited. For example, some companies may take away points if you pay your credit card bill late and some points expire after a certain period of time. You’ll also need to make sure you meet any spending minimums and always read the fine print of your credit card agreement, as well as any mail the company sends you in case the terms change.
Top travel rewards card perks
Consumers generally prefer airline rewards cards to credit cards that only offer points for specific hotels. Some of these cards are branded, meaning they only work for a certain airline, although there are general travel rewards cards that also offer free travel perks. The CreditCards.org study found that the general travel rewards cards are the most popular and nearly 20% of people own multiple travel rewards cards.
Discounted flights and hotels are the favorite travel rewards for consumers, with cash back coming in second, and free checked bags and low interest rates landing in third place, respectively. Many travel rewards cards also offer exclusive perks, like priority boarding, although this was the least popular reward in the study.
According to the study, most consumers redeem their rewards once a year, although 36% said they either redeem their points every few years or have never redeemed their rewards at all. Given this, it makes sense that nearly $16 billion in travel rewards is left on the table each year.
There is a little bit of strategy involved in maximizing your travel card rewards, so here are some tips to make sure you get every point you deserve.