83% of consumers are forfeiting travel rewards: Study - Insights

83% of consumers are forfeiting travel rewards: Study

Credit Card 300According to NerdWallet’s 2016 Travel Credit Card Study, consumers are leaving an average of 15,338 rewards points on the table by not applying for travel credit cards at the best possible time. This amount is equal to an average of $177, which could be put toward hotel stays, airfare and other travel expenses.

“Americans love travel credit cards, but unfortunately they aren’t making the most of them,”  says Sean McQuay, NerdWallet’s credit card expert. “Many consumers know that signing up for a travel card means getting a sign-up bonus, but most don’t realize that there are limited-time offers that often push those sign-up bonuses up by an average of nearly $200 and that those offers follow a seasonal pattern every year. By planning ahead, they can significantly increase the value of their credit cards by signing up at the right time.”

Best Time to Apply

NerdWallet’s 2016 Travel Credit Card Study analyzes patterns in limited-time offers and credit card applications to help consumers get the most out of their travel rewards cards. Based on our analysis of the most popular general travel, airline, hotel, co-branded and issuer-branded cards, we’ve identified the best months of the year to apply for each card type based on the sign-up bonus.

 

Credit Card Type

Best Time to Apply Based on Sign-Up Bonus

Month Majority of Consumers Apply for Card

Percentage of Consumers Missing Out on Rewards Per Card Type

General Travel  

November

July

91%

Airline

November

January

60%

Hotel

August

April

83%

*Co-branded

August

January

69%

**Issuer-branded

November

July

91%

*Carry the name of a specific airline or a hotel chain
**Carry only the name of the issuer

 

NerdWallet also found that consumers should give themselves about five months between applying for a card and taking a trip to fully take advantage of a sign-up bonus. According to the study, five months gives them sufficient time to receive the card, hit the minimum spending requirement to qualify for the sign-up bonus and book their trip 47 days in advance, which is recommended by travel experts.

“Waiting for the best month to apply for cards based limited-time offers might be useful for some, but it won’t work for everyone,” says McQuay. “If you already have a good rewards card, it’s probably worth the wait to get the limited-time-offer sign-up bonus. But if you aren’t earning rewards, it may be best to go ahead and take the sign-up offer available today to ensure you begin accruing rewards immediately. Ultimately, only you can make the best decision about when you apply for a credit card.”

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