Are travel rewards credit cards worth it?

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 often for work or recreation and can afford to charge the high amounts on the credit card required to earn significant points or miles. You can also compare bonus incentives to determine whether travel rewards credit cards are worth it.

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 guarantees that you do not accrue high interest and fees that compound when you carry a balance from month to month.

Some consumers limit their spending to one credit card and pay it off as a monthly bill. Isolating spending makes it easier to rack up the amount needed to get significant points or miles. Travel rewards credit cards are also a good deal for business owners or employees who have company cards issued in their names, allowing them to charge expenses to a travel rewards credit card and have the business’ accounting department pay off the monthly balance.

Say you get a travel rewards credit card and plan to use it all year in order to rack up points for a vacation. Be aware that airlines and hotels may limit availability for cardholders wanting to redeem 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.

On the other hand, 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 usually take advantage of slow travel days and seasons to get the most out of their rewards.

Credit card issuers make travel rewards sound like they are free, but they are not. The amount of money you pay to get them, especially rewards cards with initial bonus offers, may determine if the card is worth the cost. One rewards card might offer 40,000 points for spending $3,000 in 90 days, for example, while another might offer the same amount of points for spending $1,000. The lower spending requirement might sound like a better deal, but higher fees and blackout periods could lower the card's value.