Travel Rewards programs and their drawbacks

ADVERTISING DISCLOSURE

ADVERTISING DISCLOSURE:
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from most credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

Credit Card Applications » Research » Guides » Travel with Credit Cards » Travel Rewards programs and their drawbacks

Travel Rewards programs and their drawbacks


Updated: December 26, 2012

The content is accurate at the time of publication and is subject to change.
This content is not provided by Citi. Any opinions, analyses, reviews or recommendations expressed here are those of the author’s alone, and have not been reviewed, approved or otherwise endorsed by the Citi.
Travel rewards is another set of financial tool that is offered to customers by different credit card companies as an incentive to its loyal and regular customers. The travel rewards offered are very flexible and they offer points or airline miles, which can be exchanged for air travel, accommodation or both. Every time the customer uses the card for travel related spending, more points get added. These points can be used to get hotel accommodation, car rental or other priority services while travelling. Travel rewards remain connected to a particular spending pattern and therefore a customer should choose a travel reward scheme that has no limitations to the grace period for which the points will remain valid. The user should also get the option of rolling over the unused reward points for the next billing cycle. Drawbacks of the travel reward program Travel reward programs might sound to be very exciting and money saving but there are certain limitations of the program.
  1. Credit cards that offer travel reward programs charge higher annual fees then the normal cards. This annual fee if calculated might be found to be more than the rewards earned. The more the facilities offered with the travel reward cards, the higher the annual charge will be.
  2. Using travel reward cards for making daily purchases stands fit if the user wishes to just earn points before paying off the bill in full within the grace period. This actually helps the user in gaining points as well as remaining debt free. In case the user has the tendency to overspend, then travel reward cards can stand out to be a burden since the late payment fees and surcharges for such programs are very high than the normal.
  3. Redeeming the travel rewards point stands out to be another drawback in many cases. Airlines have certain dates on which the aviation industry does not entertain any kind of rebate or discounts. These days are called “Blacked out” days. The same goes for hotels and other travel facilities that do not entertain any kind of rewards on these days. Eventually most of the blacked out days are in the peak seasons when the vacations start and people are in a mood to travel. As per the survey done by GMAC mortgage, many of the reward card holders have not been able to use their reward point because easy redemption options are not available. The travel reward programs will have little value if the customer has to pay the surplus charges for using the card as well as be unable to take advantage of the reward points. It starts to become a burden.
Again travel reward programs can be of little use if the user needs to travel with his family or friend. The reward points are acceptable for a single individual only and that is usually the cardholder, getting a second person travel under the same privileges and facilities become impossible. This becomes a challenge for users and sometimes they stop travelling.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer(s). Opinions expressed here are the author's alone, not those of the credit card issuer(s), and have not been reviewed, approved or otherwise endorsed by the credit card issuer(s). Reasonable efforts are made to present accurate information, however all information is presented without warranty. Consult a card's issuing bank for the terms & conditions.
All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.
Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Other Travel with Credit Cards Research:

Related Research:

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Top 5 Cards for Travel from Our Partners: Autumn 2018 – Expert’s Choice

Posted: February 12, 2018

Nights are drawing out, the wind is colder every day and you already feel the lightest breath of winter on your face - autumn is here. Holidays are over, kids are back to school and all you are left with are hefty holiday bills that you ... Continue reading
Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Cash Back or Travel Rewards? Here’s How to Decide On The Right Card

Posted: February 10, 2018

If you're trying to find the perfect rewards credit card, you might feel like you're drowning in options. There are just so many out there, and many of them look similar. This can make it tough to decide on a card. One thing people often ... Continue reading
Price Protection: Credit Cards That Will Refund a Price Drop

Price Protection: Credit Cards That Will Refund a Price Drop

Posted: February 8, 2018

Those who often find themselves buying stuff and then discovering that they could pay less for the same item they've just bought, will appreciate this credit card benefit – price protection. This is the least known and the most neglected ... Continue reading
You've successfully subscribed!

Please specify the following:All these fields are optional

Your Credit History
Themes you are interested in:

By providing this information you help us make our news letters more useful and informative. Thank you!