Travel Credit Cardholders Redeem over $1,000 in Rewards Each Year
This is the time of year when many Americans are planning their summer vacations. While early booking and vacation bundles can cut down on travel expenses, there is an even more lucrative opportunity travelers may be missing out on.
According to a new study from U.S. News, the average travel credit cardholder redeems $1,051 per year in rewards. However, 61% of respondents said they did not have a travel credit card, and only 18% said they would open a card to help pay for vacation. Only 45% of vacationers said they plan to pay for their trip on a credit card.
Travel credit cards offer worthwhile rewards and savings, but only if they are used correctly. These cards tend to carry higher interest rates and annual fees than other rewards cards. If you carry a balance each month, the rewards will be more than offset by the steep interest paid. If you do not use your travel rewards enough, the annual fee may not be worth the expense.
To counteract this, avoid carrying a balance each month. Instead, charge the card with expenses you would normally pay anyway. Then, pay off the balance with the money you would have used. The survey found that 27% of respondents paid off their card within a month after using it to pay for travel expenses.
Read your rewards program carefully, and use your travel card to get discounts on your trip. In the survey, 31% of travelers did not do research before booking their vacations. Comparison shopping and utilizing your travel card’s reservation platform could save significant money on your next vacation.