• Travels and tourism -> Travel Planning and Budgeting

• 0 Comment

What are the pros and cons of using travel rewards credit cards to fund future trips?

Gene Vockins

As an avid traveler and social media enthusiast, I can tell you that travel rewards credit cards are a game-changer when it comes to funding future trips. But let’s be real, every rose has its thorn, and travel rewards cards are no exception. Here are some pros and cons to consider before diving into the world of travel hacking.

Pros:

1. Earn points for doing what you already do: With a travel rewards credit card, every purchase you make earns you valuable points that can be redeemed for free travel. From groceries to gas to online shopping, you can earn points without putting in any extra effort.

2. Travel perks: Many travel rewards credit cards offer benefits like free checked bags, airport lounge access, and travel insurance. These add-ons can save travelers hundreds of dollars and elevate their travel experience.

3. Sign-up bonuses: When you sign up for a travel rewards credit card, you can earn a huge amount of points just for hitting a spending threshold in the first few months. These bonuses can be worth anywhere from a few hundred to over a thousand dollars in travel rewards.

Cons:

1. High annual fees: Many travel rewards credit cards come with high annual fees. These fees can range from $95 to upwards of $500 and can offset the value of rewards earned.

2. Limited options for redeeming rewards: While travel rewards credit cards offer great value for redeeming points for travel, there are often restrictions on how those rewards can be used. You may be limited to certain airlines or hotels, or only able to redeem rewards during specific time frames.

3. Temptation to overspend: The ability to earn points with every purchase can be tempting, but it’s important to remember that you should only be spending what you can afford to pay back in full each month. Carrying a balance on a rewards credit card can quickly negate the value of any rewards earned.

So, are travel rewards credit cards worth it? It depends on your spending habits and travel goals. If you’re able to pay off your balance in full each month, can make use of the benefits and opportunities to earn rewards, and have a clear strategy for redeeming those rewards, then the pros certainly outweigh the cons.

In conclusion, travel rewards credit cards can be a great tool for funding future trips, but like any financial decision, it’s important to do your research and weigh the pros and cons before committing. Happy travels!