How to Realign Your Travel Reward Strategy for 2021

The new year is a good time to think about what travel benefits and brands matter to you.
Sam KemmisJan 6, 2021

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Although the pandemic remains as disruptive as ever, the vaccine rollout has opened the possibility that travel could resume sometime in 2021. Maybe.

We won’t go into speculation about when or if travel will return this year, but instead focus on what you can do to realign your travel rewards strategy to the new reality. Should you sign up for new credit cards? Ditch your old ones? Earn miles and points? Or burn them?

This year offers an excellent opportunity to rethink your travel priorities.

Align your credit cards to your plans

For better or worse, 2020 gave us all plenty of time to breathe and reflect. And it’s worth taking advantage of that when considering your travel rewards strategy for 2021. For example, if you have kept one or more travel credit cards for many years, now is a good time to look over the benefits and annual fees to see if they still align with your travel interests and preferences.

Here are some potential factors to consider:

  • Lounge access: Even when travel returns, you might be less interested in spending much time in confined airport lounges. On the other hand, maybe you will need a complimentary drink.

  • Airline cards versus elite status: The benefits of airline cards, such as free checked bags and priority boarding, are often redundant with the benefits of airline status. That is, you might not need both. If your status was extended because of COVID-19, or you plan to fast-track it in 2021, now’s the time to reconsider whether you also need the airline card.

  • Annual fees: Depending on how the pandemic affected your budget, looking at your cards’ annual fee(s) with fresh eyes might be helpful. Maybe you’re ready to downgrade some cards, or maybe you’re ready to upgrade to a more premium version.

  • New benefits: Think you know the benefits of, say, the Chase Sapphire Reserve®? You might be surprised. Travel cards made so many changes to their benefits in 2020, it might be worth checking which still align with your plans. Many of these changes are temporary, but others are likely to stick around into 2021 and beyond.

Make no assumptions about point and mile values

We updated our data-driven airline mile and hotel point valuations in the summer of 2020 and, unsurprisingly, found that the cash-to-point value of many of these programs had changed significantly since 2019.

Almost across the board, the cent-per-point value dropped. But before you cry “devaluation,” keep in mind that these values are based on two variables:

  • The cost of a flight or hotel room in cash.

  • The cost in points or miles.

The cash price of airfare dropped significantly in 2020, which drove down the effective value per mile. Ditto for hotel rooms. What does this mean? Until travel demand and prices stabilize, you shouldn’t make any assumptions about how much a given point or mile is “worth.” These values have likely changed since our analysis in the summer, and will likely change again before next summer.

It’s still a good idea to compare the value of cash and reward bookings to make sure you’re still getting a decent deal. But, when considering credit card bonuses or other means of earning points, don’t assume you (or anyone) know how much they’re really worth. Especially in 2021, the value of any given point or mile depends on where you want to go and at what price you can afford.

Be choosy

Even if travel comes back in 2021, it likely won’t be near pre-pandemic levels. And that means it will be a buyer’s market for airfare, hotel rooms and credit cards.

Rather than setting out with a specific rewards goal, consider waiting and watching for the best deals and offers. These include:

  • Credit card welcome bonuses: Nobody knows when it will happen, but there’s a good chance that credit cards will begin aggressively competing with each other for new sign-ups. Don’t settle for the standard welcome bonus. Wait for the feeding frenzy.

  • Earning bonuses and elite status offers: We’ve already seen hotel brands begin offering unprecedented promotions and fast tracks to earning elite status. Expect airlines and credit cards to join in the fray soon, and look for creative ways to stack promotions on top of each other.

  • Award booking deals: Airlines, especially, will be desperate to get bodies back in their aircraft, and are likely to offer promotions and sales on award bookings.

The bottom line

Like any predictions about the course of the pandemic, these come with a huge caveat: Nothing is certain. But no matter what the near-term future of travel holds, it’s a good idea to realign your travel rewards goals.

Start by looking over your current travel credit cards and reassessing how much value they are likely to offer in 2021. Re-familiarize yourself with the value of points and miles, and keep in mind that they will remain a highly volatile commodity. And be on the lookout for the best deals and promotions as businesses look to lure back travelers.


How to Maximize Your Rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2021, including those best for:

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