A travel rewards credit card may be worth it, depending on how frequently you travel, whether you can afford to charge the amount required on the card to qualify for rewards and whether you can pay off the card balance on a monthly basis. Travel rewards cards typically benefit people who travel a lot, for work or recreation, and can afford to charge the high amounts on the credit card required to earn significant numbers of points or miles. You can also compare bonus incentives to determine whether travel rewards credit cards are worth it.
Carrying vs. Paying Off the Monthly Balance
The more money you charge on a travel rewards card, the more points or miles you get. If you are able to pay off your credit card balance monthly, the travel rewards you get might be worth it. Paying off your credit card ensures that you do not accrue the high interest and fees that only compound when you carry a balance to the next month.
Some consumers isolate their spending to one credit card and pay it off as a monthly bill. Isolating spending racks up the amount needed to get significant points or miles. Travel rewards credit cards are also worth it for business owners, or employees who have company business credit cards issued in their names, who charge all expenses to a travel rewards credit card and have the business’ accounting department pay off the balance monthly.
Limited Availability
Say you get a travel rewards credit card and plan to use it all year in order to rack up points for your annual family vacation. While airlines and hotels no longer have “blackout dates,” they can, and do, limit availability for people wishing to cash in travel rewards. Peak days and seasons vary among travel brands, so a travel rewards card may not be worth it if you cannot use the rewards points or miles when you need them. Contrarily, a travel rewards card may be the best option for a person who travels frequently. People who fit this category fly and stay in hotels year-round and most likely can take advantage of slow travel days and seasons to get the most out of their rewards.
Evaluating Bonuses
Credit card issuers make travel rewards sound like they are free, but they really are not. The amount of money you pay to get them, especially rewards cards with initial bonus offers, can help you determine if the card is worth it. One rewards card might offer 40,000 points for spending $3,000 in 90 days, while another might offer the same amount of points for spending $1,000. The lower spending amount might sound like a better deal, but whether the card is worth it depends on how the card issuer and travel brand allow you to redeem the points.