Some researchers asked Americans about their impressions of credit card travel rewards. As we’ve seen in the past, travel rewards are still popular, especially now that more travel destinations are accessible again. Despite persistent Covid-19 restrictions, more than half of respondents believe travel rewards cards are important.
Additionally, some cardholders are still willing to pay an annual fee for credit card benefits while traveling, although this varies by demographic. Card issuers have successfully marketed the benefits they include, and our research shows that, in most cases, customers know the benefits their cards can deliver.
See how Americans’ attitudes and behaviors toward credit card travel rewards are skewed today.
Respondents want to travel again and have points
Cardholders are ready to travel again, with only 12% not planning a vacation this year. This leaves the vast majority of respondents wanting to take a break, in fact, 50% of respondents said they are currently planning at least two trips.
Of those who choose to travel, most want to use the points or miles on their credit card to fund the trip. A quarter of respondents said they would use rewards to pay for one trip, while 36% would pay for two trips and 12% would pay for three or more trips. A large percentage of respondents (18%) want to use points, but aren’t sure how much travel this will account for – which is totally understandable until official flight and hotel bookings are finalized.
If you’re wondering how cardholders can afford to travel so much, the answer may lie in their existing unused rewards balance. Nearly three-quarters of respondents already own miles and points. In fact, 15% have already earned at least 20,000 points—enough for a free round-trip flight or a short hotel stay—and another 45% have more credit card rewards.
These balances are built over time. Currently, 49% of respondents say they are not using incentives because Covid-19 has affected their travel plans or hopes. Another common factor is that the value of points is not worth it, another issue that our survey addresses.
Bonus points are overrated and misunderstood
More credit card rewards programs are transitioning to proprietary rewards currencies, which often give customers more flexibility when redeeming points, but also blur the value of points. So when asked how much they thought the average credit card points were worth, respondents were everywhere.
Some respondents remained silent, with 12 percent saying they thought each point was worth a cent or two. This number corresponds to most credit card cash back or other fixed value exchanges. Others, however, were more optimistic: 18% said points were worth an average of 3 cents, and a whopping 42% said points were worth 20 cents or more. While this is theoretically possible, it is venturing into the realm of finding a needle in a haystack.
Perhaps even more telling is how many respondents admitted they weren’t sure how many points they were worth. Overall, 27% of respondents chose this option, with almost twice as many women as men choosing this answer.
Notably, respondents tended to be more specific when considering points associated with redeeming free flights. Most airlines advertise economy flights on 25,000-mile round-trips, but paying double is fairly common for wider inventory. However, the majority of respondents said the 100,000-point welcome bonus is enough to cover two round-trip domestic flights, 17% expect it to cover three round-trip flights, and another 17% expect it to cover only three trips.
Seniors are less likely to spend annual fees
While the specific benefits vary from card to card, most respondents know that travel credit cards offer cardholders many of the benefits that come with owning the card alone. Notable features include airport lounge access, express security and discounts on in-flight shopping.
While frequent travelers can get hundreds of dollars in value by choosing a card that has the perks they take advantage of, not everyone is willing to pay for those perks in the form of the card’s annual fee. A whopping 14% were completely unwilling to pay an annual fee for airfare, and for 58-76 year olds, that number rose to 62%. Only a minority (5%) are willing to pay an annual fee of more than $500 for a super-premium card, and none of those cards are more than 58 years old.
As you might expect, most respondents are willing to pay modest fees for a card with solid travel rewards and benefits. The widest range of prices to choose from is between $51 and $100 per year, which is in line with the large number of cards we typically see around the $95 price point. Almost as many respondents would consider paying up to $200 a year in exchange for a multi-function card.
Pokoknya
Not everyone is ready to make the decision to travel, but our polls show that Americans have turned an important corner and most are ready to start planning and booking travel for this year. The results show that many cardholders own miles and are willing to spend them, even if they don’t always know the exact value of the miles. This proves the value of doing your homework when you focus on maximizing your rewards.
