2018 Travel Credit Card Study

Americans who don't carry a travel rewards credit card miss out on hundreds of dollars' worth of free travel a year. Some enjoy other rewards, but millions get nothing.
Erin El Issa
By Erin El Issa 
Edited by Paul Soucy

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Consumers love to travel, and many of them know how to get a little something back for it: More than two-thirds of American adults (68%) say they have a credit card that earns travel rewards.

The more consumers use a travel rewards credit card for daily expenses, the more points they can earn toward their next trip. And as long as they’re paying off their balances every month, there’s significant upside to racking up these rewards. But those who love to travel and don’t use a travel rewards credit card could be missing out on hundreds of dollars a year in rewards.

NerdWallet analyzed nine popular travel rewards credit cards [1] and average American expenditures to determine how much consumers who don’t have travel rewards credit cards are leaving on the table. We also commissioned a survey, conducted online by Harris Poll, of more than 2,000 U.S. adults in February and March 2018. In the survey, Americans were asked about their reasons for not owning a travel rewards credit card, their spending tendencies, and how far in advance of an upcoming trip they think is the best time to apply for a travel rewards credit card.

This is the 2018 edition of NerdWallet’s annual travel credit card study. Visit our credit card data page for the most recent edition and other credit card research.

Key findings

  • Americans without travel rewards cards miss out on an average of $277 a year in rewards — and significantly more in year one — by not putting expenses on one. That’s $22 billion in free travel overall that Americans aren’t getting. [2]

  • The first-year value of a travel rewards credit card for the average American is $901. This includes the sign-up bonus and ongoing rewards. [3]

  • Almost 3 in 5 Americans (59%) think the right time to apply for a travel rewards credit card in order to use the card’s sign-up bonus to pay for a flight is less than five months before the flight. In reality, five months prior is the minimum amount of time recommended between card application and takeoff.

Americans miss out on $22 billion a year in free travel

The average American could earn $277 a year in free travel by using a travel rewards credit card, after accounting for annual fees. This number is significantly higher in the first year of having a card because of sign-up bonuses and the fact that many issuers waive their annual fee the first year (more on that below). But in year two and beyond, it comes out to $277. Because 32% of American adults don’t have a travel rewards credit card, that’s $22 billion per year, using U.S. Census Bureau data on Americans 18 and older. (Not all Americans will qualify for a travel credit card, due to low or no credit.)

It’s important to note that many Americans still earn rewards on their spending by using another type of credit card, such as a cash-back card. This is a good idea for consumers who don’t travel enough to justify carrying a travel card or if they just prefer cash or other types of rewards. More than half of Americans who don’t have a travel rewards credit card (54%) say they don’t have one because they don’t think they travel enough to justify it.

That said, many Americans could enjoy higher rewards with a travel credit card. On average, Americans say they typically travel three times a year but would like to do so five times per year. Travel rewards earned on a credit card can stretch a travel budget, making it easier to travel more often. Most Americans do travel — 75% report they typically travel at least once a year — so it’s a good idea to evaluate whether a travel rewards card is right for you.


When every dollar spent is earning travel rewards, it can be tempting to spend more than normal to rack up points even quicker. Roughly 1 in 3 Americans who have a travel rewards credit card (34%) say they often overspend in order to earn points/rewards for a trip. This is most true for millennials (defined as ages 18-34 by Harris Poll), compared with Gen Xers (ages 35-54) and baby boomers (ages 55+).

One in 10 Americans without travel rewards credit cards (10%) say they don’t have one because they’re concerned they’ll overspend just to earn more rewards. Additionally, more than one-third of Americans without travel rewards cards (35%) say they don’t have one because they don’t want to accumulate more debt. These are valid concerns, but for consumers who can stay within their budget and plan to travel anyway, a travel rewards card will save them money over time, as rewards will reduce what they spend out of pocket for travel.


Gen Xers are most likely to travel, with 86% saying they ever travel, compared with 81% each of millennials and baby boomers. When asked about their preferences, 89% of millennials say they’d ideally like to travel at least sometimes, along with 88% of Gen Xers and 85% of baby boomers. Really, the majority of every generation travels (millennials and boomers travel three times per year on average and Gen Xers travel four times per year on average). And they’d like to do it more overall (millennials and Gen Xers ideally want to travel six times per year on average and boomers ideally want to travel five times per year on average).

When asked whether they’d rather go on a vacation of their choice or visit family for the holidays if they had enough credit card points or miles for a free trip, the majority of every generation preferred the former. Overall, almost 3 in 4 Americans (71%) said they’d rather go on a vacation of their choice, including 71% of millennials, 74% of Gen Xers and 69% of baby boomers.

What you should do: Evaluate whether a travel rewards credit card is right for you. “If you travel a lot, then a travel rewards card can help you earn points to offset the cost of your trips,” says Kimberly Palmer, NerdWallet’s credit card expert. “The best card for you depends on how much you travel, whether you want access to premium perks like airport lounges, whether you travel internationally, and whether paying an annual fee makes sense given the value you will get out of the card.

“The right card can mean the difference between finally affording the trip of a lifetime and staying home and watching TV,” Palmer says. “Finding the right travel card for you is like finding the right shoe — the proper fit is essential.”

Check out NerdWallet’s best travel rewards credit cards to learn about the benefits and drawbacks of cards we examined for this study.

If you decide a travel card isn’t for you, but you’re still looking for a card that will provide rewards for using it, see our best rewards credit cards. These include some of our favorite cash-back cards as well.

A sign-up bonus could add $450 or more to your travel budget

Most travel rewards credit cards come with a sign-up bonus — extra points for spending a certain amount of money on a card in the first few months. For the nine top travel rewards credit cards we analyzed for this study, the spending requirements to earn a bonus ranged from $1,000 to $5,000 in the first three months of card ownership. The average sign-up bonus is worth $450 in rewards after accounting for first-year annual fees.

The average American [4] spends $57,311 a year, according to 2016 Bureau of Labor Statistics data. According to our analysis, around $25,160 of that can be put on a credit card without incurring unnecessary fees. [5] Assuming our average American spent this money evenly throughout the year, that’s $6,290 every three months, so they would be able to earn any of these sign-up bonuses without spending more than they already would.

In addition to the sign-up bonus, consumers will earn rewards on every dollar they spend. The total average first-year value of a travel rewards card is $901. That includes the sign-up bonus and the first year of rewards based on average spending, minus the first year’s annual fee. (Many travel cards waive the annual fee for the first year.)

What you should do: As we’ve noted, the average American can earn a sign-up bonus by putting most of their spending on a travel rewards credit card in the first three months, and these sign-up bonuses can finance a significant amount of travel. That said, don’t use a big sign-up bonus as an excuse to overspend, because the math simply doesn’t work in your favor.

If you’re making only the minimum payment on your credit card balance, interest charges will outweigh the value of your sign-up bonus after five months. It will outweigh your total first-year value after seven months. [6]

“Any value you get from the rewards on a card is quickly erased if you are maintaining a balance and paying interest,” Palmer says. “To enjoy the benefits of a travel rewards card, it’s important to pay the balance off in full and on time each month, to avoid accruing any interest charges and fees. Don’t let the appeal of a sign-up bonus or rewards lure you off track with your budget — you still have to pay your credit card bill.”

Plan ahead to use your travel rewards for an upcoming trip

Travel rewards credit cards often have sign-up bonuses large enough to pay for, or heavily subsidize, your next trip. However, it’s unlikely a consumer will be able to apply for a credit card and use the bonus to book a trip for next month. In a previous NerdWallet study, we determined that the best time to apply for a travel rewards credit card to use the signup bonus for an upcoming flight is at least five months ahead of a trip. This includes the time to apply for and receive the card, earn the bonus and book the flight in the suggested time frame.

Nearly 3 in 5 Americans (59%) think they would need to apply for a travel rewards credit card less than five months before taking a flight in order to use the sign-up bonus to pay for the flight. Millennials are most likely to get this wrong: 70% think it’s less than five months, compared with 63% of Gen Xers and 48% of baby boomers. Only 16% of millennials know that five months or more before the flight is the best time to apply for the card.

What you should do: If you want to use a new travel rewards credit card to pay for an upcoming trip, it’s important to plan far enough ahead to take advantage of the sign-up bonus. The earlier you apply for a card, the more time you have to earn your sign-up bonus and other rewards and the less you have to stress about whether you’ll be able to use your rewards to help cover your vacation expenses.

If you’re racking up points or miles but don’t plan to use them just yet, make sure you know the credit card card company’s policy on points expiration.

“Since points you earn from some travel rewards credit cards can expire, it’s important to keep track of your points and to use them,” Palmer says. “While the rewards on the cards in this study generally don’t expire as long as your card is active and in good standing, that’s not always the case, especially with hotel and airline cards, so make sure you check your card’s expiration policy on the card issuer’s website. Expired rewards can’t help you pay for your next trip.”


This survey was conducted online within the United States by Harris Poll on behalf of NerdWallet from February 27 to March 1, 2018, among 2,041 U.S. adults ages 18 and older, among whom 1,404 currently have a travel credit card and 637 don’t have a travel credit card. This online survey is not based on a probability sample and therefore no estimate of theoretical sampling error can be calculated. For complete survey methodology, including weighting variables and subgroup sample sizes, please email [email protected].

NerdWallet’s analysis included data from:

[1] We analyzed the cards NerdWallet recommends in its roundup of the best travel rewards credit cards of 2018. Because this study is focused on consumers, we didn’t include the card recommended for business travelers. Also, the Barclaycard Arrival Plus® World Elite Mastercard®, which was among the recommendations, was closed to new applications by the issuer shortly before publication of this study, so it may not appear in the roundup.

[2] We calculated the individual consumer rewards by taking the average rewards a consumer would earn on a travel rewards credit card, less any applicable annual fees. We calculated the overall U.S. rewards by using survey data and U.S. Census Bureau data from July 2016 to determine the number of American adults without travel rewards credit cards, and multiplying that by the individual consumer rewards.

[3] We calculated the first-year card value by taking the average rewards and sign-up bonus a consumer would earn on a travel rewards credit card, less any applicable first-year annual fees.

[4] The Bureau of Labor Statistics breaks down consumer spending by ‘consumer unit,’ which can mean a single person or a family. For the purposes of this study, we considered one ‘consumer unit’ to be one consumer.

[5] For example, you generally can’t put your mortgage or rent on a credit card without being charged a processing fee.

[6] We calculated this by assuming Americans would spend evenly on their credit cards each month and only make the minimum payment — which we calculated as 3% of the balance, or $20, whichever is higher. We calculated an average interest rate of 20.23% (as of March 5, 2018) for the cards we analyzed. The interest accrued would be $521 after five months (exceeding the average sign-up bonus of $450), and $964 after seven months (exceeding the year one value of $901).

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