Editorial Team

Editorial Team

Travel Credit Cards Are Dead — What Will Replace Them?

Travel credit cards have been a staple in the credit card industry for years. Most people have at least one travel rewards card in their wallet that lets them rack up points for flights and overnight stays. 

The perks seemed lucrative enough, claiming to allow casual and avid travelers to benefit from the accumulated rewards points. However, most people don’t use their points. Unused and unredeemed points are one of the three primary sources of profit for travel loyalty programs such as the frequent flyer program. 

That means you’re leaving a lot of money on the table. You’re getting even less of a benefit due to the travel restrictions and border closures in place due to COVID-19.

Luxuries like travel aren’t that interesting in the new, emerging economy. The pandemic made travel credit cards practically obsolete. But what if you could earn rewards you’d actually use and that automatically invest to build your long-term goals?

How the pandemic changed travel rewards credit cards

Travel credit cards let you earn points or miles that you can redeem for travel purchases like flights, hotel stays, activities and excursions. They usually come with other travel benefits, such as travel insurance, airport lounge access and reimbursement for lost luggage.

The benefits promise to be a great way to leverage your spending habits. Even the occasional traveler could easily obtain free flights, flight upgrades and hotel stays, right? Well, not so fast. The pandemic has caused many folks to stay close to home and miss out on point-building opportunities. 

As a result, credit card companies shifted their rewards programs to focus more on lifestyle and shopping from home rather than vacation and travel. Some popular travel cards added rewards opportunities for Lyft, DoorDash, streaming services, and grocery and home improvement spending. 

Travel cards have also implemented new redemption programs that allow you to trade them in for statement credits on streaming services, Uber Cash and wireless telephone services.

But modifying rewards programs only helps cardholders if they actually redeem their accumulated points. Therein lies the problem with travel credit cards. Pre-pandemic, only 38% of people traded their points for freebies like cashback and airline tickets, and some never redeemed their rewards at all — not even once. 

Why travel rewards credit cards are dead

The COVID-19 pandemic is both a health and financial crisis. It’s no surprise that lower-income earners are the hardest hit. According to the Pew Research Center, even high-income earners are among the 33% of adults who have had to tap into their savings to pay mortgages and cover rising food costs. Like millions of others, you might be looking to cut expenses you see as discretionary - including a travel credit card with a hefty annual fee.

You probably didn’t think twice about paying the annual fee because it included perks like travel insurance, airport lounge access, free meals and lost luggage reimbursement. But now that folks aren’t traveling much further than the closest Trader Joe’s, the fee doesn’t have the same appeal as it once did.

Spending priorities have changed dramatically during the pandemic. Many travel credit cards modified their rewards programs to cater to the shift in the economy and consumer spending habits. While the revamped options may offer slightly more value over travel rewards, it isn’t enough to justify an increase in spending to earn more rewards.

Beyond the lost appeal of travel rewards, you must also consider how useful the points are to you specifically. Did you avidly redeem your points for freebies? Or did you leave your rewards to sit there unredeemed like most other cardholders?

If you’re one of the few who use their points, think about this: how beneficial to your long-term financial goals are the rewards you earned? It’s likely the benefit died out soon after you returned from vacation. But with the right rewards, your points can be invested and benefit you for years to come.

A credit card with rewards you can use

With travel practically halted, racking up easy rewards points and frequent flier miles is a thing of the past. Many credit card issuers have revamped their programs in an attempt to lure you to stay. But to truly maximize your purchases and turn them into wealth-growing opportunities, it’s time to change your credit card strategy.

You might be wondering what you can do to earn cashback or rewards and if better redemption options exist. Fortunately, something better is out there if you look beyond travel rewards cards. Imagine a premium credit card that helps you grow wealth now and into the future. It’s possible with the Unifi Premier credit card

The Unifi Premier card lets you earn up to 2% cashback, with no cashback limits on eligible purchases. But it gets better: your rewards are automatically invested as a contribution to your investment fund, cryptocurrency or precious metals, growing your wealth effortlessly.

High-income households spend an average of $110,508 annually. If even half of those purchases were eligible to earn 2% cashback, you’d get over $1,000 in rewards that you can use to grow your wealth over the long-term. 

Instead of changing your habits to maximize your credit card rewards, get a rewards card that meets you where you’re at. The Unifi Premier card lets you earn and redeem points on what really matters: your financial future.

Growing wealth vs. accumulating points and miles

You may want to keep your premium travel credit card in your wallet for post-pandemic excursions. If you plan to fly or book a hotel, the benefits could be enough to keep the card around.

However, it’s much more likely that you’ll let the points go unused or that you simply won’t set foot in an airline lounge more than a couple of times this year, if at all. Rather than wasting space in your wallet with a fancy travel credit card, it’s time to rethink your credit card rewards strategy. 

Forget accumulating points and miles and paying annual fees for perks you won’t use. It makes more sense to switch to a card that helps you grow your portfolio. After all, travel is negotiable. Saving for retirement and other long-term financial goals is not.

Don’t take financial security for granted. To support your goals, the Unifi Premier credit card offers 2% cashback rewards in the form of Bitcoin, Gold or Equity. Spending should be a tool to build your wealth and you have the choice to redeem your rewards toward your investment fund, cryptocurrency or precious metals.

What should you do with your travel rewards credit card?

If you’re struggling to see the value in your travel credit card, you’re not alone. Benefits like airline elite status, a first checked bag free and travel insurance in the current economy don’t justify hanging onto a travel rewards card that charges an annual fee of up to $550 or more.

So, what should you do with your travel rewards cards? To start, keep an eye on your credit limits. Your card issuer could reduce your credit limit, which can cause a drop in your credit score. You might downgrade your travel credit card to one with no annual fee. 

Or consider canceling your card in favor of one that rewards your spending habits with wealth-growing opportunities. 

Switching to a new credit card rewards program makes sense. We designed the Unifi Premier card for high-earning professionals, making it easier to grow your wealth with rewards you can use.

*Important information and disclaimers

The above does NOT constitute an offer, solicitation of an offer, nor advice to buy or sell specific securities. The opinions listed above are not the opinions of Unifimoney Inc. or Unifimoney RIA, Inc. but represent the opinions of independent contributors. These contributors may or may not hold positions in the stocks discussed. Investors should always independently research any stocks listed and form their own opinions, while recognizing that any investments made may lose value, are not bank guaranteed and are not FDIC insured.