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One major consequence of the COVID-19 pandemic taking hold across the globe last year was an unprecedented dropoff in travel, both within the U.S. and abroad. In addition to travel restrictions enacted around the world, many states and regions imposed strict lockdowns. As a result, many credit card issuers began adding non-travel perks to their travel rewards credit cards to help keep their customers happy. Now that vaccination campaigns are well underway and travel is beginning to rebound, you might be wondering whether some of the non-travel perks you've enjoyed with your credit cards will continue, or whether you should be looking for other options.
Here are some clues as to whether travel cards will keep offering non-travel perks post-COVID, and how that might impact your rewards strategy.
New Non-Travel Credit Card Perks
The ability to rack up airline miles and hotel points probably wasn't of much interest to consumers who weren't able to travel anywhere in the past year. That's why many travel credit cards began offering temporary non-travel benefits.
New Statement Credits
Several credit cards began offering non-travel statement credits.
For instance, the Chase Sapphire Reserve® previously offered $300 in annual statement credits toward a wide variety of travel purchases such as airfare, hotel rates, train tickets and even things like parking meters. For much of 2020, however, and through December 31, 2021, the card is also letting members use this credit toward gas station and grocery store purchases—two common expenses for folks who have been stuck at home or limited to nearby road trips.
The Journey Student Rewards from Capital One is offering a novel benefit. New cardholders can earn $5 per month during the first 18 months they have the card (for up to 12 months) on select streaming subscriptions billed monthly when they pay on time. That's a total potential value of $60—not bad for a card with no annual fee.
New Bonus-Earning Categories
Many rewards cards have also added new ways to earn bonus points during the pandemic, some of which are temporary and some which are permanent.
Until recently, the Capital One SavorOne Cash Rewards Credit Card earned unlimited 3% cash back on dining and entertainment, 2% back at grocery stores, and 1% on all other purchases. Now, the card also earns 3% cash back at grocery stores (except at superstores like Walmart and Target), as well as on popular streaming services including Netflix, Hulu and Disney+, reflecting many consumers' shift to home-based activities during the past year. Just in case you carry this card and do want to venture out for an event, it's also offering 8% back on Vivid Seats purchases to things like sports games and concerts now as long as purchases are posted to your account by January 2023.
If you haven't already, be sure to check with your issuer to get a current guide to benefits for any cards you carry and make sure that you are maximizing your purchase power with both existing and new bonus categories.
New Redemption Options
The rewards you earn with travel credit cards are mainly meant to be redeemed for … well, travel. But the pandemic has caused many to expand the options cardholders have for using their hard-earned points.
For example, Ultimate Rewards points earned with the Chase Sapphire Reserve® and Chase Sapphire Preferred® Card are normally worth 1.5 cents and 1.25 cents apiece, respectively, when redeemed for travel bookings made through Chase, and just 1 cent each for other statement credits.
However, in May 2020, Chase introduced a new feature called Pay Yourself Back. It allows folks with either of those two cards to redeem their points at the better travel rates for statement credits toward purchases at select, rotating categories such as grocery and home improvement stores, and on dining including restaurants, takeout and eligible delivery services through September 30, 2021.
Will Non-Travel Perks Remain Post-COVID?
As more folks get vaccinated and local restrictions are loosened, travel bookings appear to be surging for the summer and beyond, and consumer spending is also on the uptick. Some of these pandemic-related perks will probably expire as travel credit cards transition back to their typical earning and redemption options.
That said, when Chase's Pay Yourself Back feature launched, it was only valid through September 30, 2020. Chase has extended that deadline twice now, most recently through September 30, 2021. Depending on customers' behavior and whether they start redeeming more for travel again, that might get extended another time. Or it might not.
In short, if you have any temporary, pandemic-related benefits available to you with your credit card, be sure to take full advantage of them before their current end date. There's no telling if issuers will continue to extend them once things start getting back to normal.
To that end, make sure you understand the terms and conditions of any temporary or new benefits you are entitled to. Here's what you can do to stay on top of changing card benefits.
Mind Your Messages
Credit card issuers want their customers to know when they are providing extra benefits. If your card issuer has added new perks to your card, temporary or permanent, they will let you know about them by regular mail, via email or through a secure message in your online account—or all three. However, they might not remind you of the expiration date, so be sure to keep your eye on the calendar.
Double-Check Charges and Rewards
For instance, you wouldn't want to charge a streaming service like Prime Video to your Capital One SavorOne Cash Rewards Credit Card expecting to earn 3% cash back only to find out that it's not among the eligible providers.
Likewise, if you've already hit your $300 annual travel statement credit with your Chase Sapphire Reserve®, you wouldn't want to continue using the card for groceries or gas since it will not reward you with either statement credits or bonus points on such purchases.
If you're not getting the rewards rate you expect on certain charges, that can be a tipoff that certain benefits have expired. Consider reassessing your card usage to make sure you're getting the most out of your cards.
Consider Opening Another Credit Card
If you normally carry travel rewards credit cards and have been maximizing their non-travel perks in this past year, you might look at opening a new credit card that offers similar advantages on an ongoing basis. Here are three to consider:
- Capital One SavorOne Cash Rewards Credit Card: This card has fantastic earning potential. It accrues 3% cash back on dining, entertainment, eligible streaming services and grocery stores (excluding superstores), and 1% back on everything else. New applicants can earn a one-time $200 cash bonus after spending $500 on purchases within the first 3 months from account opening. There is no annual fee.
- Chase Freedom Unlimited®: This card accrues 5% cash back on travel booked through Chase, 3% cash back on dining, and 1.5% cash back on all other purchases, making it an excellent all-round earner. It does not carry an annual fee, and is currently offering new applicants a bonus of up to $200 after spending $500 on purchases in the first 3 months.
- Citi Rewards+® Card: With the points earned using this card from our partner, you have the flexibility of redeeming them for cash back or various travel redemptions, making it very versatile. It earns 2 ThankYou Points per dollar at supermarkets and gas stations for the first $6,000 per year, then 1 per dollar thereafter and on all other purchases. Plus, every transaction is rounded up to the nearest 10 points, which means you can earn even more. There is no annual fee, and it is currently offering 15,000 bonus points after spending $1,000 in the first 3 months.
Should You Get Rid Of Your Travel Credit Card?
Before you clean out your wallet, you might want to hang on to your travel cards in case the rewards they earn and the perks they offer come in handy. Beyond that, though, think about the following two things.
Credit Score Impact
When you decrease your overall credit limit, it can cause your credit utilization to rise even if you're spending the same amount on your cards as before. That effect could put a dent in your score—though it will likely bounce back if you keep making payments on time and reduce your account balances.
Consider a Product Change or Downgrade
If you eventually decide that you want to cancel your travel credit card—perhaps you're just not using its benefits or want to avoid an expensive annual fee—then you should think about shifting or downgrading to another product from the same issuer.
Doing so usually helps you avoid a hard inquiry on your credit report (which can also drop your score a few points temporarily), but it also means you retain your line of credit and your account with your issuer, and thus doesn't damage your credit score.
Although travel rewards credit cards are great for racking up points and miles for trips, many began offering alternative benefits during the COVID-19 pandemic. These ranged from more earning and redemption opportunities to additional statement credits for a wider variety of purchases. Now that parts of the world are returning to normalcy, though, many of these benefits might expire. Make sure you maximize any that you have coming your way before they do, and think about whether you might be better off with a non-travel rewards card in the future. Then check Experian CreditMatchTM for the best current options personalized just for you.