Many Americans leaving credit card, travel rewards on table
Many Americans are allowing “hundreds to thousands” of dollars in credit card cash-back and travel rewards to expire without being used, according to new analysis from Bankrate.
Rewards cards accounted for nearly 90 percent of all money spent on credit cards last year, according to the Consumer Financial Protection Bureau. But 29 percent of those reward cardholders have allowed their earnings to expire, according to Bankrate's latest survey.
Meanwhile, nearly half (46 percent) of U.S. adults who participate in airline and hotel rewards programs have let their points or miles expire at some point, according to the analysis.
This is real money … The average American has a frequent flyer balance worth about $350. The average hotel point stash is worth over $200. And in terms of credit card rewards it is about $150.
“This is real money … Even if you take a conservative valuation and you say one cent per point or mile, we found that the average American has a frequent flyer balance worth about $350. The average hotel point stash is worth over $200. And in terms of credit card rewards it is about $150,” Bankrate.com credit card analyst Ted Rossman told FOX Business.
"Horrifying"
According to the survey, more than half of U.S. adults (53 percent) admit they have no idea how much 10,000 rewards points/miles are worth. The correct answer is generally in the $100 to $199 range – roughly 1 to 2 cents apiece – but just 18 percent of Americans know that.
Travel blogger Janice Lintz, who has taken out more than 46 credit cards in five years and earned 2.6 million miles in sign-up bonuses, told FOX Business that she finds the stats to be perplexing.
“That is horrifying, why would anyone intentionally do that?” says Lintz, who wants to visit every country in the world and is confident that travel rewards can help her reach her goal. (Her current tally is at 135.)
Lintz, who says she puts stickers on different cards as reminders and also relies on the rewards-program tracking app Award Wallet, says that keeping on top of it all can be “tedious,” but is always worth it.
Travel blogger Janice Lintz in Laas Geel, Somaliland. Photo credit: Janice Lintz
“[Thanks to points], I rarely pay for airline tickets,” Lintz says.
Rossman says Award Wallet is one of the more popular rewards tracking apps, but added that it is “not perfect ... [and the] free version doesn’t get you as much as it used to.”
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“Super complicated”
Why would anyone leave free money on the table?
“I think there are two main reasons. I think some of it is people are not aware. And I think the other part is that people just think these programs are super complicated,” Rossman says.
But, he adds, they don’t have to be.
“Not everybody has to be a travel hacker dropping everything to fly to the Maldives at the next available opportunity. There’s ways to get everyday value out of these programs. It could be [as simple as] a cashback credit card,” Rossman advises.
“If you participate in a program like Chase Ultimate Rewards, or Amex Membership Rewards or Citi ThankYou Points, these are going to offer you a dozen or more airlines or hotel chains that you can transfer your points to. You can also use them for cash back, statement credit, gift cards and merchandise.”
He also says to cash in as often as possible.
“My advice is to redeem these things frequently. You really shouldn’t build up a huge balance because there is really no benefit to being a points millionaire. These things are not going to get more valuable over time,” he says.