December 4, 2023

How Travel Credit Cards Are Changing

Some of the links on this site contain offers from our partners. Travel has been…

How Travel Credit Cards Are Changing

Some of the links on this site contain offers from our partners.

Travel has been curtailed in the wake of the coronavirus, and rewards credit cards are adapting to fit changing consumer priorities. You may have noticed that travel credit cards have refined their rewards to add earning opportunities for essentials, such as stocking up at the grocery store or filling up at the gas station.

Depending on the card, you might even be able to redeem travel rewards for streaming services, as well as takeout and home improvement purchases.

Credit card companies have also bumped up sign-up bonuses on travel cards, and many general rewards cards allow people to earn travel rewards now and use them later.

Here is a look at some of the changes to travel credit cards and how you can take advantage of them.

What Are Travel Credit Cards?

Travel credit cards are rewards cards that earn points or miles you can redeem for a variety of travel purchases and other items. They typically come with travel benefits that may include travel insurance, airport lounge access and lost luggage reimbursement, among others.

Generally, you will find two types of travel credit cards:

Co-branded cards. A co-branded credit card is a partnership between a card issuer or network and a travel-related business, such as an airline, a hotel chain or a cruise line. A card might carry the logos of the credit card company and, say, the airline.

Your card spending earns points and miles, often toward more travel spending with the brand.

General travel cards. This type of card provides you the flexibility to earn and redeem rewards in many ways: You won’t be limited to travel purchases. Some cards also have portals for booking travel that allow you to extract the most value from your rewards.

How Are Travel Cards Changing?

As people shun fancy trips for the essentials during the pandemic, travel credit cards have temporarily adjusted their rewards programs. Card spending earns rewards not only for travel but also for grocery, gas, streaming service, takeout, delivery and other everyday purchases.

“They’re trying to get creative and think of things people who aren’t traveling are still spending money on,” says David Tuzzolino, founder and CEO of Pittsburgh’s PathBridge Financial, a financial planning and wealth management firm.

Flexibility is a major concern for consumers, adds Andrew Davidson, senior vice president and chief insights officer at Mintel Comperemedia, a consumer and marketing intelligence company.

The lines between travel and cash back cards are blurring, and the result is increased competition that benefits consumers, he says. Travel cards now more closely resemble cash back cards, which traditionally focus on flat-rate cash back or bonus rewards for everyday spending.

Which Travel Cards Can Help You Earn Rewards When You’re Not Traveling?

You might have a travel credit card and not know about changes to your card’s rewards program. If you have one of these popular cards, here is how you can redeem rewards more easily during the pandemic:

  • Chase Sapphire Preferred Card. You can earn two points per dollar on up to $1,000 monthly in grocery store purchases, including pickup and eligible delivery services, through April 2021.
  • Chase Sapphire Reserve. Cardholders can earn three points per dollar on up to $1,000 in monthly purchases at grocery stores and on eligible grocery delivery services through April 2021. You can use the card’s $300 annual travel credit toward gas and grocery purchases through June 30, 2021.
  • The Platinum Card from American Express. New cardholders earn 10 points per dollar spent at U.S. gas stations and U.S. supermarkets on up to $15,000 in combined purchases in the first six months. All cardholders can get up to $40 in statement credits per month through December 2020 for select U.S. streaming subscriptions and U.S. wireless phone services.
  • Delta SkyMiles Gold American Express Card. The card offers 2 miles per dollar spent at U.S. supermarkets, plus restaurants, including delivery and takeout.
  • United Gateway Card. This newly launched co-branded Chase card offers rewards for everyday purchases, such as 3 miles per dollar on up to $1,500 in grocery purchases monthly through September 2021. The card also earns 2 miles per dollar at gas stations, on local transit and commuting expenses, and on United Airlines purchases.

Which Travel Cards Offer Valuable Alternatives to Travel Rewards?

It’s no secret that travel rewards typically offer the best value when they are redeemed for travel expenses. Holding on to your points or miles until your next trip, whenever it happens, is usually best.

But if you have a lot of miles or points and don’t want to wait to use them, your travel credit card could provide other options.

You might be able to redeem your points or miles for gift cards or cash back, which could be a good idea if you need the funds.

Previously, these choices didn’t offer the same value as travel, but that has begun to change. Here is a look at the way a few travel credit cards are changing how you can redeem rewards:

  • Capital One Venture Rewards Credit Card. You can redeem your Venture Rewards miles for statement credits on eligible restaurant delivery, takeout and streaming service purchases through April 2021.
  • Capital One VentureOne Rewards Credit Card. Just like the Capital One Venture Rewards Credit Card, this card allows you to redeem VentureOne miles for statement credits on eligible streaming service and restaurant delivery and takeout options.
  • Discover it Miles. You can turn your miles into cash or redeem them for statement credits toward gas and restaurant purchases, in addition to travel expenses, including flights, hotels and ride-hailing services.
  • Chase Sapphire Preferred Card. You’ll get 25{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} more value for your points when you redeem them for statement credits toward grocery, restaurant – including takeout and delivery – and home improvement store purchases, plus contributions to select charities, compared with cash back.
  • Chase Sapphire Reserve. Points redeemed for select statement credits and charitable donations are worth 50{d54a1665abf9e9c0a672e4d38f9dfbddcef0b06673b320158dd31c640423e2e5} more than cash back.

Should You Ditch Your Travel Rewards Card?

The answer depends on whether the rewards justify an annual fee. Many travel credit cards charge annual fees, and even if yours has enhanced perks to add value, you might feel like you’re not getting your money’s worth this year.

If you want to close the card, verify that you won’t lose your miles. This is less likely with a co-branded travel card, which may transfer miles or points to airline or hotel loyalty rewards programs.

If you choose to keep the card, take every opportunity you’re given to collect points. “Use all these benefits, and make sure you get value out of the card,” Davidson says. “They’re doing all they can to justify those annual fees.”

Should You Get a Travel Card Now?

A travel card is still a good bet, even if you don’t have travel on the horizon. Travel will come back, and these cards can offer tremendous value in rewards and benefits.

“Some consumers might say, ‘I’ll never travel again.’ But most people are yearning for travel, want to see family and friends, (and) explore the world,” Davidson says. “Travel is not going away.”

This is an optimal time to get a travel card because sign-up bonuses are “extraordinarily rich,” says Alex Miller, founder and CEO of Upgraded Points, a travel rewards site.

If you want to apply for a card and you’re not sure which one, Miller says, ask yourself:

  • How generous is the sign-up bonus?
  • What benefits can you use when travel resumes?
  • How many points can you earn, and can you earn more points for spending in certain categories?

Travel rewards cards are certainly good for more than flying. In fact, some co-branded hotel cards even cater to road trippers, Davidson says. Wyndham and Hilton-branded cards, for example, earn bonus points for gas purchases.

“Consumers are still hesitant to travel but are more comfortable to visit hotels than to get on planes,” Davidson says.

If you have to fly, the perks of a higher-end travel card might have more value now. An airport lounge could offer somewhat of a safe haven as you travel.

American Express’ Centurion Lounges, which are reopening across the country, tout contactless check-in and enhanced cleaning measures.

If you’ve weighed the pros and cons of travel cards and are still unsure, you might want to wait and see how these cards continue to evolve. When a travel resurgence draws near, the travel credit card market will become even more competitive.

“You’ll start to see more credit card launches, new deals (and) new value propositions being promoted,” Davidson says.