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Should You Still Be Trying to Accumulate Credit Card Travel Points?

If you are open to pivoting on how to use your travel points, you may have more options available to you than you think. 

April 9, 2021

There’s nothing quite like travel to help you unwind, have fun and broaden your horizons all in one fell swoop. Even though the possibility of travel is within sight for many Americans as they begin to get their coronavirus vaccines, the prospect may not be all that tempting until life (and travel) fully return back to normal. 

If your travel credit card points have been collecting dust for the past year, you may be wondering if it’s still worth it to try to collect credit card rewards. The truth is, there’s no one right answer to this question. In some cases, yes, it is a good idea to keep collecting your travel points and in other cases, it might be better to cash out now. 

To understand what path may be best for you, we’re going to look at how credit card issuers are reacting to the pandemic, what your odds of losing your rewards points are, and what your options for moving forward may be.  

How COVID-19 Has Affected Travel Credit Card Rewards

Robin Saks Frankel, a personal finance expert with Forbes Advisor, who works on the credit card and travel rewards team, believes you shouldn’t necessarily write off your travel rewards just yet. She explained that credit card issuers are still coming out with great sign-up bonuses and different product offerings intended to align with the shift in consumer spending. She believes that with the increase in the number of people worldwide receiving vaccines, it’s likely that travel will pick up in the not-too-distant future. 

“If you are thinking about how to use a stash of travel rewards that have languished in the past year, consider using an award booking service to squeeze the maximum value from your earnings,” Frankel advised. 

The key to making the wait worth it is to ensure your travel points aren’t going to expire before you get to use them. Typically, more general travel rewards cards often don’t have expiration dates on their rewards points, or if they do, they provide a decent amount of time to redeem them (around five years). Cards associated with specific airlines or hotels more commonly have time limits, and their points tend to expire at around one to three years. The threat of expiring points caused concern for many savvy travelers at the onset of the pandemic when they knew they wouldn’t be travelling anytime soon. Luckily, many credit card issuers and hotel and airline loyalty programs are offering flexibility during these uncertain times by adapting their policies to better suit the needs of their customers. 

To check on the current status of your travel rewards card’s expiration policy, you can review your card agreement and can double check if your card provider has made any updates to their policy online. If you’re uncertain what your rewards look like, log into your credit card account and review either your account details or rewards summary to see where you currently stand. 

When Travel Credit Card Rewards Aren’t Worth It

If your points aren’t going to expire, it may seem like there’s no harm in continuing to use a travel credit card. That may be true, but it’s important to analyze the situation closely to see if the rewards really are worth it. According to Frankel, accumulating credit card points can still be beneficial as long as you aren’t carrying existing credit card debt. 

“Pandemic or not, the double-digit finance charges on a credit card balance will always outweigh the benefit of single-digit credit card rewards rates,” Frankel said. “With that in mind, many issuers are expanding the ways cardholders can use their points. For example, Chase’s Pay Myself Back tool allows cardholders to use their rewards to offset eligible purchases made on the cards, in some cases at an elevated rewards rate.”

One way to easily determine if continuing to use a travel credit card is worth it is if you’re paying an annual fee. Paying a high annual fee may quickly outweigh any monetary benefits you gain from a travel credit card, especially if you can’t redeem your points or perks in the foreseeable future. For example, if one of the main perks of paying an annual fee is reimbursement for Global Entry or TSA PreCheck applications, then you may not get any use out of that perk until you start flying again. The same goes for perks like lounge access, free drinks in-flight, and other perks that you can only take advantage of when traveling. 

What to Spend Your Points on Instead

If travel doesn’t appear to be an option for you any time soon, you don’t need to let your points go to waste. 

“Depending on what type of rewards card you have, it may seem as though accumulating travel rewards is an uphill battle while COVID-19 remains a concern. But many issuers have expanded their rewards programs, at least temporarily, to offer increased bonus rewards in the areas people have been likely to spend the most, like grocery spending, food delivery, streaming services, or home improvement stores,“ Frankel said. 

If you are open to pivoting on how to use your travel points, you may have more options available to you than you think. 

Some credit card issuers are allowing customers to donate their points toward coronavirus relief efforts or other charitable initiatives. In many cases, you can turn your points into cashback or use them to purchase gift cards or products like magazine subscriptions. Some credit cards offer a lot more bang for your buck if you spend your points on travel-related rewards, so you may want to double-check how much they’d be worth if you hold onto them until you are able to travel again. Whether you choose to stay home or hit the open road, stay safe!

 

Want to get a handle on your credit card debt before your next big trip? Tally is here to help make it easier to reach that goal.