As Americans pack their luggage and head off on summer vacations, there is one thing they are leaving home: their hotel and airline rewards points. While a majority of Americans (58 percent) say that using their credit or debit card to earn travel reward points makes financial sense, few of them are actually taking advantage of those perks to save on their hotel and airline costs. That’s according to a new telephone survey of 1,012 U.S. adults conducted in June by Harris Poll on behalf of the American Institute of CPAs.
In fact, the survey found that Americans are just as likely to incur additional expenses from their vacations as reap the rewards of the points they’ve earned. In their lifetime, 15 percent of Americans have paid for part or all of their trip with rewards points, compared to 14 percent who say they’ve taken a trip that has resulted in a credit card balance that could not be paid off by their next statement.
Given the rise of websites that offer tips and tricks for “travel hacking” – the art of collecting rewards points in hopes of traveling for free – it’s no wonder that some Americans are going the extra mile in search of free nights and flights. A total of 12 percent say they have opened a credit card in order to obtain hotel or airline rewards while six percent have selected a more expensive flight or hotel to earn travel rewards points and six percent have taken a trip just to maintain or upgrade a rewards level. Despite those efforts, only seven percent of all Americans used rewards points to pay for any part of their last vacation – with only one in a hundred (one percent) paying for their entire trip using points.
“When chasing after elite status with hotels and airlines, it’s important to not lose sight of the fact that miles and points often have a dollar value associated with them,” said Gregory Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission. “Spending extra money in hopes of earning free nights and flights has the very real potential to leave Americans feeling like they’ve been travel hacked when their credit card payments are due.”
Indeed, in the last year alone, 14 percent of all Americans have suffered the negative financial consequences from their vacation travel, with 12 percent carrying a balance or paying interest on their credit card, three percent missing a payment or being charged a late fee and two percent going over the spending limit on their credit card while on vacation.