How the 41% of Americans With a Travel Credit Card Can Boost Rewards

A new NerdWallet survey finds that travel rewards cardholders are piling up points/miles, and 35% of these cardholders try to get the best possible value when redeeming their rewards for travel.
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Written by Erin El Issa
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Edited by Meghan Coyle
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Travel points/miles could make your next trip cheaper, or even free, and many Americans could benefit from the help this year. A new NerdWallet survey finds that the majority of U.S. adults (84%) have taken or plan to take a vacation that requires a flight or hotel stay in 2023, spending $3,916, on average, on those travel expenses. That’s nearly 218 million Americans spending close to $853 billion on travel expenses this year, according to NerdWallet analysis.

The NerdWallet survey of more than 2,000 U.S. adults — among whom 899 say they currently have a travel rewards credit card — conducted online by The Harris Poll asked Americans about their 2023 travel plans. We also asked Americans about their travel rewards credit cards and how they use points/miles.

Key findings

  • Travel rewards credit cards are more popular among younger Americans. More than 2 in 5 Americans (41%) currently have a travel rewards credit card. This is true for 52% of millennials (ages 27-42) and 48% of Generation Z (ages 18-26) vs. 39% of Generation X (ages 43-58) and 34% of baby boomers (ages 59-77).

  • Points/miles are stacking up for many travel rewards cardholders. Among travel rewards credit cardholders, the average points/miles balance is 55,300. Nearly 1 in 4 travel rewards cardholders (22%) currently have 50,000 or more points/miles.

  • Some travel rewards cardholders prioritize value, others convenience, when using points/miles. Of travel rewards credit cardholders, 35% say they try to get the best possible value when redeeming their earned points/miles for travel, while 14% redeem their points/miles for whatever travel they have coming up, without considering best value.

“Especially as folks get back to traveling, it's important to consider the power of travel credit cards in making vacations a lot cheaper,” says Sally French, a NerdWallet travel expert. “These credit cards can offer cardholders not just points and miles for spending, but lesser-known benefits like free checked bags, automatic elite status and upgrade priority.”

About one-fifth of Americans have a new travel rewards credit card

Travel rewards credit cards can be a great way to earn points/miles for free travel. According to the survey, over 2 in 5 Americans (41%) currently have a travel rewards credit card. For some, these cards are new to them: nearly 1 in 5 Americans (19%) say they have a travel rewards credit card they got in 2022 or 2023.

Travel rewards credit cards find more popularity with men than women, and younger Americans than older. The survey found that 45% of men currently have a travel rewards credit card, compared to 38% of women. Millennials (ages 27-42) and Generation Z (ages 18-26) are more likely to currently have a travel rewards card than Generation X (ages 43-58) and baby boomers (ages 59-77) — 52% and 48%, vs. 39% and 34%, respectively.

Consider if a travel rewards credit card makes sense for you

Travel rewards credit cards often come with annual fees, while their cash-back counterparts tend not to. But depending on your spending and travel habits, a travel credit card could be the right choice.

Many travel rewards credit cards have enticing sign-up bonuses, which usually make a card worth the fee during the first year, provided you meet the spending requirement to earn the bonus. But what about after year one? Let’s say a travel rewards credit card has an annual fee of $100, you earn 2 points per dollar spent, and each point is worth 1.5 cents. There’s also a cash-back card with no annual fee and you earn 2 points per dollar spent, each of which is worth 1 cent.

To figure out the amount you need to spend to outweigh the annual fee, use the breakeven calculation below (in which AS represents Annual Spending):

Travel rewards card (left side of equation): [(Points earned per dollar spent x Value of each point) x Annual spending] - Annual fee.

Cash-back card (right side of equation): [(Points earned per dollar spent x Value of each point) x Annual spending] - Annual fee.

[(2 x $0.015) x AS] - $100 = [(2 x $0.01) x AS] - $0

($0.03 x AS) - $100 = $0.02 x AS

($0.03 x AS) - ($0.02 x AS) = 100

$0.01 x AS = 100

AS = $10,000

So in this case, if your annual spending is more than $10,000, the travel rewards credit card would be worth the annual fee. If it’s lower, you’d want to opt for the card without the annual fee. But even if the rewards math doesn’t work out, a travel card could still make sense.

“Points-earning isn’t the only reason to hold a travel credit card,” French says. “Some potential travel card benefits include automatic free-night certificates, which can often be worth more than the card’s annual fee alone. Other benefits such as trip insurance can be tougher to quantify, but can come to the rescue when trip plans go awry.”

Around 1 in 7 travel rewards cardholders have 100,000-plus points

Many Americans with travel rewards credit cards are hanging on to their points/miles. Among travel rewards cardholders, 22% currently have 50,000-plus points/miles and 15% currently have 100,000-plus points/miles. On average, travel rewards credit cardholders have 55,300 points/miles — a far cry from the median, which is just 2,000. So those with the highest number of rewards are bringing up the average by quite a bit.

Reward balances vary greatly from generation to generation. Gen Z travel rewards cardholders have 9,700 points/miles, on average, while baby boomer travel rewards cardholders carry 108,300 points/miles, on average.

That’s a lot of free or cheap travel waiting to be had, which is particularly appealing when airline fares are up 25.6% annually, as of January 2023, according to the Bureau of Labor Statistics. Travel rewards cardholders piling up their points may want to reconsider their strategy.

Redeem rewards sooner rather than later

Saving up your points/miles to go on your dream trip for free is tempting, but there’s a risk in holding onto rewards for longer than you have to. Point/mile value may go down over time, due to devaluations or falling behind inflation.

“Just as inflation is a hot topic these days, travel points inflation has always been looming,” French says. “Points tend to lose their value over time, so it’s smart to spend them down if you don’t have concrete plans to save them up for a specific redemption.”

How travel rewards cardholders redeem

The value of a point or a mile may vary depending on how you use it. More than a third of travel rewards credit cardholders (35%) say they try to get the best possible value when redeeming their earned points/miles for travel while others (14%) just redeem their points/miles for whatever travel they have coming up, without considering best value. Around a quarter of travel rewards cardholders (23%) go for a balance of the two: sometimes trying to get the best value when redeeming points/miles for travel and other times just using them to book whatever is most convenient. Each of these can be a good way to redeem travel rewards, as long as it works for you.

A less ideal redemption method is for something other than travel: Among travel rewards cardholders, 22% generally redeem their points/miles for nontravel rewards, like cash back or gift cards. Typically, the redemption value for travel rewards is higher when used for travel rather than cash back, particularly if you transfer points/miles to partner airlines or hotels.

Aim to increase your redemption value, if you want to

There’s nothing wrong with using points/miles for whatever travel you have coming up next. In fact, if you’re an infrequent traveler, that’s probably the way to go, instead of stockpiling points that lose value. But if you travel often and you want to learn how to increase the value of your points, it doesn’t have to be overwhelming.

“Understanding the value of points can be confusing, as a mile in one program isn’t always worth the same as a mile in another,” French says. “Points and miles are made-up currencies, but NerdWallet has calculators that can make it easy to understand their value.”

Our beginner’s guide to traveling on points and miles provides clarity on how to use points/miles to book free (or cheaper) travel, including the highest-value way to use those points. You can also familiarize yourself with different travel rewards programs and the potential value of their points/miles. It can be a little more work to use travel points/miles in the highest value way, but it can result in more jet-setting for less money.

If you typically redeem your travel rewards for cash back or gift cards, consider a cash-back credit card. Travel rewards credit cards often come with annual fees and less favorable redemption rates for nontravel.

“Travel credit cards can be trickier to manage given the work required to transfer points to various airline and hotel loyalty programs,” French says. “They’re also more likely to have annual fees than cash-back cards. While the work and upfront fee might be a turnoff, often travel credit cards can provide far bigger payoff in accruing maximal points along with the other travel benefits of card ownership.”


This survey was conducted online within the United States by The Harris Poll on behalf of NerdWallet from Feb. 7-9, 2023 among 2,080 U.S. adults ages 18 and older, among whom 899 currently have a travel rewards credit card. The sampling precision of Harris online polls is measured by using a Bayesian credible interval. For this study, the sample data is accurate to within +/- 2.8 percentage points using a 95% confidence level. For complete survey methodology, including weighting variables and subgroup sample sizes, please contact Lauren Nash at [email protected].


NerdWallet disclaims, expressly and impliedly, all warranties of any kind, including those of merchantability and fitness for a particular purpose or whether the article’s information is accurate, reliable or free of errors. Use or reliance on this information is at your own risk, and its completeness and accuracy are not guaranteed. The contents in this article should not be relied upon or associated with the future performance of NerdWallet or any of its affiliates or subsidiaries. Statements that are not historical facts are forward-looking statements that involve risks and uncertainties as indicated by words such as “believes,” “expects,” “estimates,” “may,” “will,” “should” or “anticipates” or similar expressions. These forward-looking statements may materially differ from NerdWallet’s presentation of information to analysts and its actual operational and financial results.

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