Money Research Collective’s editorial team solely created this content. Opinions are their own, but compensation and in-depth research determine where and how companies may appear. Many featured companies advertise with us. How we make money.
Travel Rewards Are Now an ‘Essential’ Part of Americans’ Vacation Budgets
By Julia Glum MONEY RESEARCH COLLECTIVE
At the same time, credit card reward programs are coming under fire in Washington.
It’s no secret that people love travel rewards programs. But now, we know exactly how much.
According to survey results released Monday by banking giant Barclays, 37% of travelers enrolled in loyalty programs see them as a crucial part of their vacation budget. Another 76% said they’d have to “significantly” change their travel habits without these benefits, and 4% said they wouldn’t be able to afford to travel, period.
“The findings show that rewards programs are an essential part of helping Americans travel for business and leisure,” Doug Villone, head of U.S. cards and partnerships at Barclays’ U.S. consumer bank, said in a news release.
Travel has bounced back in a big way from the dark days of the pandemic: The United Nations’ tourism arm said Tuesday that more than 285 million tourists took international trips in January, February and March of this year. That’s 20% more than the same period in 2023.
Still, inflation continues to pinch Americans’ wallets. Although airfare and hotel prices have fallen, the costs for everyday essentials like groceries and rent have surged, meaning consumers’ disposable income is particularly precious.
These factors are all combining to influence folks’ travel plans, especially heading into summer. As a result of increased demand, Barclays — which, to be clear, issues credit cards and therefore has a vested interest in promoting them — says “loyalty programs with travel rewards have moved from a nice-to-have perk to an absolute must.”
Credit card rewards are beloved — and under fire
The Barclays poll, which included responses from about 1,000 travelers, comes amid a multi-pronged political debate about the future of credit card rewards in the U.S.
For one, there’s a bipartisan bill called the Credit Card Competition Act lingering in both the House of Representatives and Senate. The act, abbreviated as CCCA, is aimed at decreasing the swipe fees paid by merchants every time a customer uses a credit card.
There are very enthusiastic (and very vocal) lobbyists on both sides of the issue. CCCA proponents say that introducing more competition into the space could save businesses a lot of money, which could potentially lead to lower prices for shoppers; critics argue that it would so drastically eat into profits that companies would be forced to slash their credit card rewards, which are clearly coveted by customers.
At the same time, White House officials are starting to investigate what they allege is a lack of transparency around airline credit card rewards programs. Secretary of Transportation Pete Buttigieg and CFPB Director Rohit Chopra have teamed up to scrutinize fluctuating point values, high interest rates, aggressive marketing, “bait and switch” scams and exclusive deals between airlines and card companies.
In prepared remarks delivered earlier this month, Chopra admitted that airline and credit card rewards can be incredibly valuable for families looking for ways to bring down the cost of a vacation.
But they’re also “a multibillion-dollar currency market where credit card companies and airlines buy, sell, convert and issue miles and points throughout sectors of the economy,” he said, ultimately making them “major assets and competitive weapons.”
Determining how best to wield those weapons is key for travelers, businesses and legislators alike.
Quote, compare and buy in a few minutes
🏖️ Best Price Guarantee - Buy Online!
- Coverage for Non-Refundable Trip Costs
- Missed Port & Connection Protection
- Emergency Medical & Dental Care at Sea
- Baggage Loss, Theft & Delay Protection
Travel concierge services with premium plans
Get an Instant Quote from AIG Travel Guard
-
Domestic, Road Trips & Weekend Travel Coverage
- Coverage for International Trips
- Cruises, Family Travel, Seniors
- 24/7 Emergency Assistance
Largest selection of policies with Covid-19 coverage
✈️ Quote & Compare Best Travel Insurance
- Same Price as Purchasing Directly from the Providers
- Trip Cancellation, Medical & Cancel for Any Reason Policies
- Cruise Insurance, Group Travel & Annual Policies
Digital Travel Insurance
COVID-19 coverage is available and/or may be included as an add-on
- “Cancel For Any Reason” (CFAR) availability
- Includes trip cancellation, baggage delay/loss, and flight delays
- Emergency medical expenses coverage are included in the coverage
Trusted by Over 6 Million Travelers Annually
- Medical & Dental Emergencies
- Trip Delays, Interruptions & Cancellations
- Coverage for Baggage & Personal Items
- 24/7 Travel Assistance
More from Money:
How Much Are Airline Rewards Really Worth? Biden Admin Probes Credit Card Programs
Could This New Credit Card Bill in Washington Hurt Your Miles and Points?
The Best Airline Rewards Programs
Julia Glum is Money's news editor, keeping her finger on the pulse of financial trends that affect Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. A 2014 graduate of the University of Florida's journalism school, she previously covered breaking news, politics and education at Newsweek and International Business Times. Julia joined Money in 2018; during her time as a reporter, she wrote frequently about Amazon, passive income, stimulus checks and creative ways people make money online (think: Vine compilations, Cash App Friday and Facebook gift groups). As an editor, she oversees Money’s tax coverage, which includes extensive reporting on tax credits, year-to-year policy changes, tax refunds and the IRS’s ongoing efforts to modernize. For several years, Julia has assisted with Money’s annual Best Colleges rating and Best Places to Live rankings. Recently, she also led Money’s 50th anniversary celebrations, producing the Money Classic newsletter and rolling out Changemakers, a project profiling 50 innovators working to revolutionize personal finance. Julia has interviewed National Taxpayer Advocate Erin Collins, actor Danny Devito, Nobel Prize-winning economist Robert Shiller, rapper Killer Mike, real estate guru Ryan Serhant and many others. Her work has been cited or otherwise shared by the New York Times, Washington Post, Vox, theSkimm, Mashable, CNBC and POLITICO. She’s appeared on Good Morning America, CBS News, PIX11, WGN, the Mountain West News Bureau and more. Julia is based in New York City. You can find her at juliaglum.com.