Whether you’re sitting on thousands of travel rewards points or considering what type of new credit card to apply for, you may have wondered whether travel rewards points are even worth it during the current pandemic. After all, many people are avoiding travel as much as possible due to safety concerns, and it’s not clear the world will be ready to go back in the air.
However, travel rewards points may still be the best value you can get for your credit spending — depending on when, and how, you plan to use your rewards.
When do you want to cash in?
Figuring out whether a travel credit card is still worth it over a cash back card depends largely on when you plan to cash in your rewards.
If you want to start tapping your rewards ASAP, a cash back card might offer you the best value for your money at the moment. Travel rewards points and miles tend to be more valuable when spent on travel expenses — so if you’re willing to save your points for a big post-Coronavirus vacation, travel rewards are the way to go.
Another factor is which card lines up with the way you spend money. Most cash back and travel rewards credit cards will offer bonus categories such as groceries, dining or entertainment. With these bonus categories, you can earn 2x or more points or cash back on purchases.
Using a credit card calculator is an easy way to compare the types of rewards you could earn with different cards, based on your typical spending. These calculators can show you not only how many points or miles you could earn, but different options for redeeming your points.
Choose transferable points if possible
If you’re thinking of picking up a new travel rewards credit card, there’s one important distinction to make: choose transferable bank points over airline miles.
Travel rewards points typically come in two types: points from your card issuer, such as Aventura® points from CIBC, and cards that are tied to a specific airline, such as Delta SkyMiles.
Airlines are dealing with a challenging and uncertain future, so there could be a situation in which those miles either lose value or are more difficult to redeem in the future. On the other hand, points tied to a bank are much more stable, and are typically transferable to both airlines and hotels.
Consider your card’s annual fee
Many of the best travel rewards credit cards will come with an annual fee that can range from $100-500.
For a frequent flyer, it’s often easy to earn back your card’s value with perks such as free checked luggage, airport lounge access, and of course rewards points.
However, after being grounded for almost a calendar year, many of those perks may not be earning their keep. If your higher end travel card isn’t adding up to its annual fee in value, it may be time to switch it out for a card with a more modest annual fee for the time being.