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25% of Americans book travel with credit cards – Why it can be a good thing


Age-old wisdom says you should build your vacation fund before you decide to travel rather than putting your vacation on a credit card and going into debt. But for a quarter of Americans, this is now how they operate, according to a survey of 1,037 Americans in early April by GOBankingRates. While it is indeed unwise to go into debt to finance your vacation, for those who can manage their credit cards properly, using plastic instead of cash can actually offer a wide range of benefits. Here’s an overview of why booking travel with credit cards can be a good thing, as well as a warning against overdoing it.

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earn points

The most tangible benefit of using credit cards for most travelers is earning points or miles. Travel-dedicated rewards cards typically offer bonuses for expenses such as airline tickets or hotel stays, such as 3x miles on airline tickets or 5x points on hotels. If you put a $3,000 vacation on a travel rewards credit card, for example, you could potentially earn thousands of points or miles. These can then be used for free flights or hotel stays in the future. Since you’ll be spending that money on your vacation anyway, you might as well put that charge on your credit card and reap the rewards.

Travel coverage

Booking travel using your credit card can be invaluable in terms of protecting your trip. Most travel-oriented credit cards offer a host of additional services, ranging from insurance in the event of your trip being delayed or canceled, to protection for lost baggage, to primary or secondary insurance for your trip. rental car and even accidental death and dismemberment coverage, unpleasant as that is. to be considered. Ultimately, a good travel rewards credit card protects you in the event of many major travel mishaps.

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Additional services

In addition to the main features of most travel rewards cards, a host of ancillary benefits are also commonly available. Booking travel with your credit card can give you access to features like room upgrades, late check-out, free baggage, airport lounge access and more. Some cards even give you airline or hotel status just for holding them, which can offer benefits ranging from seat upgrades and priority boarding to club-level access at hotels. While you may be able to earn these privileges on your own, they usually require long plane or hotel stays to earn them.

Purchase Protection

Most credit cards come with some type of purchase protection, which will reimburse you if the merchandise you purchased is substandard. In most cases, Purchase Protection will also reimburse you if it is lost, damaged or stolen for a certain period, usually 60 to 90 days. But in addition to this formal type of purchase protection, credit card companies allow you to dispute certain charges on your card. If you’re abroad and get robbed by a merchant who won’t refund you, for example, you can file a claim with your credit card company to get that money back, often without having to provide any supporting documents. .

You don’t need to carry cash or debit cards

One of the often overlooked benefits of using a credit card while on vacation is that you won’t have to carry a lot of cash. You can also choose to leave your debit card at home, or at least in the hotel safe. This protects you against losing your money or being the victim of theft, both of which can be catastrophic if you rely on the cash to fund your vacation. In the worst case, most credit cards will even allow you to take out a cash advance, although this should be an option of last resort.

Grace period on purchases

When you put your vacation expenses on a credit card, you won’t have to pay them back during your grace period, which usually lasts 20-25 days after your statement is issued. If you plan your trip correctly, you could have up to 50 days or more to reimburse your travel expenses. It’s a window you can take advantage of if you’re expecting a year-end bonus, for example, or even if you just want your vacation fund to earn an extra month or two of interest before you pay off your card. With cash or a debit card, that money disappears immediately. Remember that the balance that appears on your credit card statement will also appear on your credit report, which may lower your score by a few points until you pay it off.

More from GOBankingRates

Methodology: GOBankingRates surveyed 1,037 Americans ages 18 and older across the country between April 8 and April 9, 2022, asking seven different questions: (1) How much did you spend on your last vacation? ; (2) If money weren’t an issue, where would you choose to go on vacation? ; (3) What was your biggest incentive to travel? ; (4) How did you pay for your last vacation? ; (5) Did you stick to your budget for your last vacation? ; (6) Which part of the trip cost more than expected? (Select all that relate to it); and (7) What cost-cutting measures did you use on your last vacation? (Select all that relate to it). GOBankingRates used PureSpectrum’s survey platform to conduct the survey.

About the Author

After earning a BA in English with a business major from UCLA, John Csiszar worked in the financial services industry as a Registered Representative for 18 years. Along the way, Csiszar earned the Certified Financial Planner and Registered Investment Advisor designations, in addition to being licensed as a life insurance agent, while simultaneously working for a major distribution house. of Wall Street and for his own investment consulting firm. During his tenure as an advisor, Csiszar managed over $100 million in client assets while providing individualized investment plans to hundreds of clients.