These days, many Americans seem comfortable using their credit cards more often and are now using them to rack up points they can put toward their summer vacation plans.
About 50 percent of consumers who plan to travel this summer will use their rewards credit cards to cover at least some of the expenses they incur in doing so, and that's up from 42 percent a year ago, according to the latest Rewards Barometer from Capital One Financial, which tracks how consumers accumulate and redeem their credit card points. Of the things they would be willing to spend their rewards points on, the majority (58 percent) chose booking airfare. Another 42 percent picked hotels, and 18 percent chose gasoline. In addition, 19 percent said they would trade up to $200 worth of their rewards for an extra vacation day from work.
"Two things people always want more of are time and money," said Amy Lenander, vice president of rewards programs at Capital One. "In today's tough economic times, more consumers are using rewards to make the most of their summer vacation time and limiting the impact on their wallets. Flexible rewards programs that allow cardholders to redeem their rewards when and how they want can make that vacation dream an affordable reality. When choosing a new rewards program, consumers should consider both the value of rewards and the ease of using them."
In general, consumers were very willing to spend a large amount of money on their summer travel plans, with 54 percent saying they had budgets of between $500 and $2,000 for doing so, and another 18 percent will spend between $2,001 and $3,000, the report said. Consumers have typically been feeling better about rewards as well, and while cash remains the top redemption choice (with 41 percent of cardholders choosing this option), another 29 percent use them for domestic airline tickets.
Typically, credit cards that grant users rewards points, cash back or airline miles are available to borrowers with strong credit scores, and consumers who want to be eligible for these accounts may want to check their credit reports before applying. This is because unfair markings can sometimes have a negative effect on their ratings, but working with a credit repair company can help to clear up these issues.