2020 was totally not the best year for traveling, so any travel credit card owner is probably thinking if it’s worth renewing it for 2021.
Generally speaking, such cards come with several benefits, including the sought-after opportunity to earn airline points, as well as miles on purchases or hotel points. Using these rewards can save you a lot of money, while the extra benefits, like airport lounge access, will instantly increase your card’s value.
However, with the coronavirus pandemic still out there, a lot of travel credit card owners are now having second thoughts about renewing it. Today, we’re trying to find out if the renewal is still an option!
Things to consider when renewing a travel credit card
Before taking a decision, we highly recommend considering the following aspects:
1. Renewing your travel credit card for 2021 involves paying an annual fee. And we still don’t know how the coronavirus pandemic will evolve, allowing us to travel or not.
2. Whether your already existing airline points or miles will expire and if there are ways you can redeem them besides traveling
3. Whether your credit card offers any kind of non-travel incentives that still make it worth keeping
Also, you should know that some travel card issuers have already made announcements for users in such a situation. Specifically, they have expanded airline points and miles redemption options. Specifically, instead of being limited to using the rewards for traveling, you can apply to transform them into statement credit for non-travel purchases. Some credit card companies are even offering limited non-travel perks, including monthly credit which can be used for paying phone bills, for example.
What happens if I cancel my travel credit card?
Getting rid of a travel rewards card, by canceling it, can make sense in one situation: avoiding paying an annual fee, if you’re not using it at all. But there are some downsides as well.
“If you cancel, you’ll need to reapply if you want the card in the future,” says Alex Miller, UpgradedPoints CEO. “And if you have reward points accumulated, you’re likely to lose all of them in the cancellation process.”
Additionally, this could also have an impact on your credit score, as canceling a card affects your overall credit utilization rate or the ratio between your balances and available credit. Finally, a travel credit card with a high limit could mean some credit score points in minus if your credit utilization rate takes a big hit.
So, is it better to keep it or close it?
Travel credit cards may have lost some of their appeals for now. But that could change as the travel outlook improves.
There’s no secret that travel credit cards have lost a big part of their appeals for the moment. But this won’t last forever!
“By keeping it now, you’ll be ready to go once travel resumes,” Ales Miller said. In the meantime, you could take advantage of the temporary non-travel credit card offers that might be available for your card.”
On the other hand, if you do decide to cancel, try doing it right before your card’s renewal date. By doing this, you will get the max out of it. Which is highly recommended, especially if you’ve paid for a yearly membership.
