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Millions of Americans plan to use credit card rewards points to pay for at least part of their upcoming summer vacation, according to a new report from CompareCards.com, and 1 in 5 cardholders say rewards will cover at least half of their summer travel bills.
CompareCards asked cardholders about their 2019 summer vacation plans and the impact that credit cards and credit card rewards have on those plans. People told us that their cards play a huge role in their vacation plans, influencing where they go, how they get there, where they stay when they arrive and more.
While it’s no great secret that many Americans have leveraged credit card rewards for travel in recent years, the percentage of those doing so took us by surprise. In short, if you believed that travel rewards were the playground only of a small group of rewards junkies, this survey shatters that myth for good.
- 98% of credit cardholders are at least considering taking a summer vacation in 2019 and 75% say they will definitely take one.
- 64% of credit card holders will use rewards points to pay for their summer vacation. And 72% of millennials will do so.
- 1 in 5 cardholders said they expect credit card rewards to cover more than half of their summer vacation costs in 2019. The average cardholder expects rewards to cover between 11% and 25% of their costs.
- 75% of cardholders said their card rewards affect their summer vacation plans, in terms of where they travel, how they will get there or where they might stay when they arrive.
- The more you earn, the more likely you are to use rewards points on vacations this summer.
- Midwesterners are the least likely to use rewards points to pay for their summer vacation. Just 46% will do so, compared to 73% of those in the Northeast.
The bottom line: Credit card rewards and perks can transform your vacation, as long as you use the card wisely.
Whether you’ll be jetting off to Paris or loading up the minivan to drive to Grandma’s house in Akron, Ohio, credit card rewards can make your travel cheaper. They can turn a good trip into an unforgettable one or a dream trip into a reality. I’ve done it many times. If you haven’t played the rewards game, chances are you might know someone who has.
Here’s the thing, though: If you tend to carry a balance, you shouldn’t be playing the game. The math doesn’t work in your favor. You should focus on knocking down your debt above all else. If you get rewards while you do it, great. But they should definitely not be your main focus. You don’t have to be an accountant to understand that paying 20% in interest charges to get 2% back in rewards is a bad deal. Consider getting a 0% balance transfer credit card instead of that travel rewards card to pay down that high-interest debt.
If you do pay your balance off each month – hooray for you! – here are a few tips to help you get the most out of your credit card for your next vacation:
Be flexible: If you’re an fanboy or girl of a certain airline or hotel chain, by all means, consider getting that brand’s credit card. It’ll come with perks targeted at you, the company’s most loyal customers. However, if you’re more about the price than the brand when it comes to traveling, a general-purpose rewards credit card – think Chase Sapphire Preferred® Card, Capital One Venture Rewards Credit Card or Barclaycard Arrival Plus® World Elite Mastercard® – will likely serve you better. Those cards’ points aren’t exclusive to one hotel chain or airline, and that frees you up to truly shop for the best deal without being beholden to one company.
And that flexibility shouldn’t just be about your credit card. It can also be about travel dates and destinations. No flights available for that long weekend trip? Consider adjusting your plans by a day or two. Deciding between a few possible destinations? See how many miles it takes to get there. If there’s a huge difference between the two, it may help you make up your mind.
Take advantage of other card perks: Sign-up bonuses and card rewards get all the headlines, but your credit card may offer plenty of other perks that can save you some headaches and some real money. Here are just a few:
- Exclusive lounge access
- Priority boarding
- Free checked bags
- Trip delay or cancellation insurance (meaning if your flight gets delayed and you get stuck somewhere overnight, your credit card company might pick up your hotel bill)
- Discounts on wi-fi or other in-flight purchases
These things may not sound like a big deal, but anything that can save you time and money with minimal effort is a good thing. Just know that not all credit cards offer these benefits. If you’re uncertain what perks come with your card, call your issuer and ask. They’ll have the answers you need.
Watch out for fees: Want to pay an extra 2% or 3% for everything you buy with your credit card on an international trip just because you’re out of the country? Of course not, but many Americans do just that because they travel with a card that charges a foreign transaction fee. The good news is that fewer cards than ever charge these fees, but they are still out there. If you haven’t changed cards in a few years, there might be one in your wallet. If you’re not sure whether your card charges a foreign transaction fee, call your issuer and ask. If your card does assess this fee, ask to have it waived or apply for a new card that doesn’t have it.
The early bird gets the worm: It may be too late to get ahead of the game planning for this year’s summer vacation, but it’s never too early to think about winter holiday travel or even your summer vacation for 2020. Airlines and hotels let you begin booking many months in advance, and the earlier you get started, the more options you’ll have available, especially when it comes to booking with miles and points. Flights to the most popular destinations can get booked up in a big hurry.
Also, don’t forget that it takes time to earn miles and points. For example, if you apply for a card today, it will may take several months to get that big sign-up bonus that caught your eye. That means that it probably won’t help you for this year’s 2019 summer vacation, but it can get you well on the way to earning a free trip for 2020.
Know thyself: Ultimately, the best way to maximize credit card rewards is to pick a card that best fits your lifestyle and rewards you for things that you’re already spending on every day. That’s why it’s important to make sure that you know how you plan to use a card and what you want to get from it a card before you apply.
If you live in a big city, use mass transportation everywhere you go and dream of jetting off to Paris, it probably doesn’t make sense to get yourself a gas rewards card. Always wanted to take the family on an RV trip across America? That airline card likely isn’t your best choice.
Take your time, do your homework, and be honest with yourself about your habits and your goals, and you’ll be on your way to finding the right credit card for you.
CompareCards by LendingTree commissioned Qualtrics to conduct an online survey of 1,036 Americans, with the sample base proportioned to represent the general population. The survey was fielded between April 2 and April 17, 2019, and the margin for error for all respondents is +/- 3%.