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Americans Cashing Out Card Rewards for Summer Vacays

American Cash Out Credit Card Rewards

A growing and significant number of Americans will be cashing out credit card rewards for summer vacations this year. Approximately four out of ten Americans prefer to use credit cards to pay for their 2019 summer vacations and nearly 40% of younger consumers will be redeeming credit card points for their trips.

A recent survey conducted on behalf of the Discover Card found 18% of U.S. cardholders will use points entirely to pay for their trips, up from 13% last summer. Younger generations are more likely to use points for their vacations than older generations – 38% of millennials (23-28) and 35% of Gen Z (under 22), compared to 28% of Gen X (39-54), 18% of baby boomers (55-73) and 15% of the Silent Generation (74+).

Redemption Frustrations

Interestingly, the Discover Card survey found 41% of consumers feel they do not know what they are doing when they book trips with credit card points. When asked how they feel about doing so, 29% of Gen X and 27% of millennials said they feel restricted in their ability to book because points dictate their airline and hotel choices.

A few years ago an Ally Bank survey asked respondents about missing out on rewards offered by their credit card company. Only 36% of consumers with credit cards use their card for daily purchases, often missing out on rewards on purchases like gas and groceries. Another 28% of respondents admitted to losing out on rewards because they expired or were too difficult to cash in.

Ally Bank also found across all age groups, millennials who do use credit cards (78%) were least likely to have lost out on credit card rewards because they expired or it was too difficult to use them.

Perfect Rewards Card

Finding the best rewards credit card for you starts with figuring out your redemption goals. While the majority of American cardholders prefer simple cash-back as it is “no fuss or muss,” others prefer to accumulate points or airline miles.

Consolidating all spending on one card for points or miles can easily become more valuable then some cash back programs. This is especially true if you favor a particular airline, hotel or destination. Additionally, most of the non-cash credit card reward programs offer ways to accelerate points or miles and may offer special bonus points or miles as a promotional or on the card’s anniversary.

Also when shopping for your ideal credit card to pay for a summer vacation always digest the “fine print” on redemptions. This fine print may include black out dates for airline flights or hotel stays, among other restrictions.

Most Important

Whatever rewards card you decide to sign up for, or currently have, remember these two important reminders :

1. Program Earning and Redemption Rules Can Change at Any Time and With Little Notice and May Include Additional Restrictions or Worse Yet, Cancellation of the Program

2. If You Default on Your Rewards Credit Card Account By Missing a Payment or Other Infractions You May Forfeit All or Some Accumulated Points or Miles. Some Programs May Reinstate Your Lost Rewards but Charge a Special Fee

Always think short term when earning credit card points or miles.

Many years ago, the author and CardTrak Senior Analyst, Robert McKinley, eyed an all inclusive (airline, hotel, etc) business-class level African Safari trip for two using his American Express card. The trip required 500,000 points. At the time, American Express would issue an annual catalog of redemption options. However, the year he had finally accumulated enough points for the African Safari trip, it was deleted from the annual catalog. McKinley settled instead for a free Paris trip for two for his 25th wedding anniversary.

Finally, if going overseas this summer CardTrak recently published a checklist regarding how to protect your digital devices while traveling.