If you’ve got summer vacation on your mind, don’t overlook a great opportunity to cut the cost of your trip. Peek inside your wallet and see if you have a rewards credit card to help you pay for it.
Let me be perfectly clear: If you can’t afford a vacation this year, I’m not suggesting you spend two weeks in Maui at an elite resort and pay for it with a credit card. I think most of you know that going into debt for a vacation is a disastrous decision.
You should never take a vacation on credit unless you can pay the bill in full and by the due date. But if you can stay on budget and you have a rewards credit card, use your card to pay for vacation and enjoy the savings.
Survey Says: Americans Are Leaving Money on the Table
An April 2019 survey by U.S. News revealed that 49% of those who use a travel credit card have redeemed $1,051 or more in rewards over the past year. Not bad, right?
But most Americans aren’t grabbing this money-saving opportunity. The U.S. News survey also showed that while almost 54% of Americans are planning their next vacation, only 45% plan to put the expenses on a credit card.
Here are a few more interesting nuggets from the U.S. News survey:
- A little more than 61% do not even have a travel rewards credit card.
- Of those planning a vacation, 24% are taking a road trip. Tip: Before your next road trip, note that several rewards cards offer great rebates on gas purchases.
- The most appealing rewards are cash back, followed by free hotel nights and free domestic flights.
- Men are more likely than women to have a travel credit card and redeem the corresponding rewards.
The results show that those who use their credit cards for travel expenses get a hefty savings. Who wouldn’t want a $1,000-plus statement credit? I’m pretty sure everyone would be on board if they knew how easy redeeming rewards can be. But there are a couple of things holding consumers back.
Why Some Americans Aren’t Benefiting From Rewards
About one-quarter of respondents plan to carry a balance on their credit cards for their trip. Now, this is a big no-no. It’s never a good idea to carry a balance with any credit card, but this is especially important with rewards credit cards.
Travel rewards credit cards have higher annual percentage rates, so when you revolve a balance, you pay a lot in interest. Your vacation becomes more expensive than you ever intended. If you redeemed your points or cash back for a statement credit, you’d be using the earned cash back to pay for interest.
Another reason that consumers aren’t benefiting from rewards? Sadly, according to a TSYS 2017 U.S. Consumer Payment Study, 19% of cardholders “infrequently or never” redeem their cash back rewards. This happens often with those who have more than one rewards credit card.
They get tired of keeping track of the different programs and redemption values. There’s a simple solution to your frustration. Check out websites, such as AwardWallet or Points.com, that help you keep track of all your rewards programs. These online tools will help you monitor your rewards, but it’s still up to you to use your rewards cards strategically.
And lastly, many consumers get blurry-eyed trying to read the rewards program details. In the U.S. News survey, 31% didn’t do any research to save on their trips. This is crazy because you’ve got the whole internet at your fingertips to help you find deals.
Start taking a frugal approach to your vacation. Combine those savings with your earned travel rewards from using your credit cards and you’ll clean up. It’s not too late to save money this summer, so start your new money-saving approach today.