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Flights, hotels, you name it: If it’s a travel expense, many Americans are probably overpaying for it.
Collectively, we miss out on $22 billion in free travel every year, a recent NerdWallet study shows. That’s because 32 percent of American adults don’t have a travel rewards credit card.
This kind of plastic nets cardholders an average of:
- $901 in rewards in the first year (including the sign-up bonus)
- $277 in rewards in the second year and thereafter
Travel rewards versus other types of rewards
Before you rush out and sign up for a travel rewards card, remember that such cards do not make sense for everybody. NerdWallet notes that many Americans use other types of rewards credit cards, like cash-back cards. And depending on your lifestyle, those cards might make more sense for you.
However, some of those folks may still want to consider a travel rewards card, given that NerdWallet found Americans usually travel three times a year but would prefer to travel at least five times a year. The site explains:
“Travel rewards earned on a credit card can stretch a travel budget, making it easier to travel more often. Most Americans do travel — 75 percent report they typically travel at least once a year — so it’s a good idea to evaluate whether a travel rewards card is right for you.”
One way to get an idea of what kinds of travel rewards cards are out there right now is to use Money Talks News’ free credit card search tool. Click on “Travel Rewards” in the menu on the left to narrow the results to that type of card.
Also check out “3 of 2018’s Best Credit Cards” — the first card on that list is a travel rewards card.
Rewards cards don’t make sense for everyone
Some people should skip rewards cards altogether, regardless of how good the perks are.
If you have credit card debt or don’t pay off your card balance in full every month, you’re racking up interest. And that interest will likely cost you a lot more money than travel rewards — or any other type of rewards — would save you.
So, instead of pursuing a card with the best rewards, look for one with the lowest interest rate for which you can qualify. That will minimize the amount of interest you must pay.
Again, you can find this type of card by using Money Talks News’ credit card search tool. Click on “0% APR” in the menu on the left to narrow the rewards to cards with zero percent interest rates.
Once you’ve paid off your debt and built an emergency fund to help you stay out of debt, then you can look into rewards credit cards.
And you don’t necessarily need a travel rewards credit card to get travel perks. For more ways to score, check out:
- “10 Travel Freebies You Can Enjoy in 2018“
- “There’s a New Way to Save 10 to 50 Percent on Travel“
- “Adventurous? 5 Ways You Can Travel the World for Free“
How do you feel about travel rewards credit cards? Tell us why you do or don’t use one by commenting below or on Facebook.