Credit card rewards help pay for summer getaways
It may not have been as tough as 2009 or 2010, but this year hasn't been easy for all too many Americans. So it was good to hear last Thursday that 62 percent of respondents to a survey of holders of rewards credit cards said that they plan to get away this summer, presumably leaving only 38 percent who expect to have a "staycation" at home, or who perhaps are on "permanent vacation" due to lack of employment.
Credit card rewards useful
The research, which was commissioned by Capital One, also found that 40 percent of those interviewed expected to redeem credit card rewards to help fund their 2011 summer vacation, compared with about one-third last year. Those who intended to take the redemption route said they'd be cashing in their points or miles as follows:
- Hotels: 55 percent
- Air travel: 48 percent
- Gas: 42 percent
Unfortunately, Capital One didn't reveal how those figures relate to last year's findings, but you might well guess that redemptions for gas are way higher than in the past, simply because of the dizzying heights to which fuel prices have risen. Such an assumption could be encouraged by another of the survey's findings: 48 percent of respondents said that gas prices would influence their vacation plans.
Credit card companies can celebrate--sort of
All of this is good news for credit card companies that view rewards programs as important marketing tools for attracting new customers and retaining existing ones. The more consumers use points and miles to enhance their lifestyles, the greater the perceived value of those rewards, and the more powerful that tool becomes.
However, the study also revealed that some credit card companies' programs could still use some work. It's true that 61 percent of those interviewed said that "free money" was their main motivation for joining a program, and one-third reported that they "appreciate the everyday savings" they provide. However, only 24 percent were "completely satisfied" with their current program. Among the more common gripes were blackout dates (26 percent), and being unable to make last-minute reservations (24 percent).
Capital One vice president Troy Jamison commented in a press release:
Planning a summer vacation can be stressful given today's economic conditions. With soaring gas prices and increasing airline fares, consumers are seeking greater value from their credit card rewards to maximize their benefits. A key to easing the stress of the financial impact of summer travel is to use a rewards card that fits one's lifestyle offering simple and flexible means to earn and redeem those rewards on their own terms.
Credit card use abroad an issue
A surprisingly high proportion of respondents (36 percent) said they'd be vacationing abroad, with Rome the top foreign destination. Sixty percent said they were unsure whether their credit cards charged foreign transaction fees, which can typically add 2-3 percent to items charged abroad, while only 19 percent knew for sure that their cards didn't. (The Capital One VentureOne Rewards Card, as with all Capital One cards, charges no foreign transaction fees.)
Other issues raised included airline costs such as fuel surcharges and baggage fees, which the researchers say "prevented [some] respondents from successfully redeeming rewards for travel."
As Troy Jamison implied, the trick, as always, is to match your credit cards with your credit card use and requirements. And to do that you need to shop around regularly, comparing deals in detail.
Published 06/27/11 (Modified 03/21/13)