Are Travel Rewards Credit Cards a Scam?

One of my most popular posts on Making Sense of Cents is How To Take A 10 Day Trip To Hawaii For $22.40 – Flights & Accommodations Included. Whenever I share it, half the people think it’s amazing, yet the other half think it’s too good to be true and that all travel rewards credit…

Michelle Schroeder-Gardner

Last Updated: March 27, 2021

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One of my most popular posts on Making Sense of Cents is How To Take A 10 Day Trip To Hawaii For $22.40 – Flights & Accommodations Included.

Whenever I share it, half the people think it’s amazing, yet the other half think it’s too good to be true and that all travel rewards credit cards are a scam. I wanted to write an in-depth post because there are so many people that don’t believe these cards really work the way they say they do.

Note: I do know that this is somewhat of a location thing. Travel rewards credit cards are popular in the U.S. but don’t exist in most other countries.

Travel rewards credit cards are extremely popular right now. For me, I’ve been interested in them for a few years now, and it seems like everyone going on a vacation is talking about them these days.

Note: Please head to Best Rewards Credit Cards to learn more.

If you haven’t done so yet, check out How To Take A 10 Day Trip To Hawaii For $22.40 – Flights & Accommodations Included for one example of how well they work.

Articles like that can make these credit cards seem amazing, and they really can be if you’re smart.

Honestly, I absolutely love travel rewards cards. In fact, I’ve gone on many extremely affordable vacations due to travel rewards credit cards, I’ve received lots of free cash back, they’ve allowed me supercheap first class flights, and more.

Actually, Wes recently went on a 3,000 mile sailing trip in Europe, and when he was done, I was able to book a last minute flight back to Arizona (where we were at the time in the RV) using travel rewards credit card points. He was able to sit in business class on a 12.5 hour flight (from London to Los Angeles, I believe) and it cost less than $100 after points. It would have cost even less if I booked it more than just a few days ahead of time. After a month on a boat sharing a bed with another crew member, we wanted to get him a roomier/comfier seat, and our travel rewards credit cards made it super affordable!

He told some of the people on the sailing trip about how much we saved using a travel rewards credit card, and they thought he was being scammed!


As a person who regularly uses credit cards (but has never paid a penny towards interest!), I knew I had to talk further about this subject since there seems to be so much confusion.

Here are the common questions I hear about travel rewards credit cards.


Don’t you have to pay interest when you use a credit card?

Surprisingly, many people don’t know how credit cards actually work. Many people think that you always have to pay interest when using a credit card.

However, that is not true.

I use a credit card all the time and have never paid a penny towards interest, late charges, or anything like that.

The key here is that I always pay my balance in full before it is due.

Credit cards have notoriously high interest rates – USA Today reports that the average interest rates for credit cards is currently at 16.71%. But, that’s only when you don’t pay your balance.


Are travel rewards credit cards for everyone?

Using a rewards card means that you can gain points and get things for free or cheap for simply using your credit card. This means you can earn airline points, gift cards, hotels, cash, etc. If you are already going to be paying for something, then you might as well get something for free out of it, right?

Credit cards can be used to pay for many things – almost anything and everything that you can think of.

If you know you can use credit cards responsibly, then you can use them to pay for your day-to-day purchases. Paying for gas, groceries, even some utility bills with a rewards credit card means you will be earning points. And, those points are basically free money.

That’s what I like about travel rewards credit cards. I’m already going to use my credit card, so if there is a bonus, then I definitely want that as well!

And, using a credit card can also be an easy way to track your transactions. I like credit cards because I can easily track my spending and see where my money has gone. With cash, I always find myself wondering what I spent my money on.


What are the disadvantages of travel rewards credit cards?

I think there are advantages to using credit cards, but there may also be disadvantages.

First of all, like I said earlier, you have to know that you can be responsible with your credit cards. If you know that you can’t pay your balance each month, then you should probably reevaluate your spending. By spending more on credit cards than you can actually afford, you will be paying even more in interest rates, which means those rewards aren’t really rewards.

With travel rewards credit cards, one big negative is that many people find themselves spending more in order to reach a bonus. Many rewards cards say you have to spend a certain amount in a specified time to reach that reward. For example, some popular cards say you have to spend $3,000 within the first three months in order to qualify for a bonus. If you weren’t normally going to spend $3,000, then the bonus may not be worth it. Going into debt in order to qualify for a credit card bonus is probably 99.9999% of the time a bad decision (I won’t say 100% because I’m sure someone can prove me wrong, haha!).

Also, you want to make sure that you don’t hurt your credit score in the end.

If you don’t use credit cards correctly, it can lead to it decreasing your credit score and possibly even ruining it.

Want to know the simple steps to using your credit cards the right way? Here’s how:

  • Always pay your bills on time.
  • Pay the full balance each month.
  • Watch your utilization rate.


What’s the catch with travel rewards credit cards?

The credit card companies aren’t just giving away points and cash back because they are nice, so I’m sure you’re wondering what the catch is.

Credit card companies offer these great bonuses and rewards because they are hoping that you’ll become a loyal customer. Credit card companies make money in various ways such as:

  • Interest charges.
  • Taking a percentage of each transaction when you use your credit card at a store.
  • Annual fees.
  • And more.

I think the biggest catch is not using your credit card responsibly and/or spending more in order to reach a rewards incentive. The goal with travel rewards cards is that you gain something by using your credit card – it should never be going into debt or spending more than you intend to.

Also, if you decide to look into a travel rewards card, do your research and find which one is best for you. There are some for specific airlines or hotels, there are others that let you use your points at a variety of companies, and more. The point again is that you are gaining something, not losing out.

Please head to Best Rewards Credit Cards to learn more.

Do you use travel rewards credit cards? Why or why not?

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Michelle Schroeder-Gardner

Author: Michelle Schroeder-Gardner

Hey! I’m Michelle Schroeder-Gardner and I am the founder of Making Sense of Cents. I’m passionate about all things personal finance, side hustles, making extra money, and online businesses. I have been featured in major publications such as Forbes, CNBC, Time, and Business Insider. Learn more here.

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  1. jenn from much to my delight

    I just got my first one (Chase sapphire) this month and was glad to read this article, as I’m really hoping it will pay off. I actually put off a few bigger purchases until I received it in the mail, because I want those points!

    1. What do you plan on doing with the points you earn?

    2. Sean

      Hey Michelle, I got a TD travel card (Canada) and they have a “special” expedia website that you need to log in to. I recently tried to book a trip and compared the prices to the ones available on the regular expedia website and it was cheaper! That seems like a scam to me – something to watch out for.

  2. DNN

    I don’t recall having a travel rewards based credit card. I’ve had credit cards where I was rewarded x and x amount of points or dollars for making purchases at certain places like gas stations, hotels, shopping online and so forth. I hear that some people who have credit cards with travel rewards on them save a significant amount of money and cash out and high amounts. Perhaps I should look into that someday and see how I too can benefit from it.

    1. I love travel rewards credit cards for myself 🙂

      1. DNN

        I may look into a travel rewards based credit card in the future with matching side hustle millionaire status. I took a venture out to Santa Barbara, California back in 2006 to attend a CJ affiliate marketing event. I had exclusive round trip, hotel and rental vehicle all for a week under $1,100 including taxes. Credit card that I had at the time which was American Express & HSBC I don’t recall having travel rewards benefits associated with those credit cards. Looking at the bigger picture, I know that I’m going to need another credit card in the future as my side hustle millionaire status grows. thank you for reminding me that I need one Michelle. Keep up the good work my friend! 🙂

  3. Hey Michelle,

    I could relate to the fact that people end up spending more just to reach a bonus or an incentive at an X amount (which is already higher than the budget). I have seen so many cases! But, credit cards are great to use if you can deal with it properly and know how it works.

    I ensure that I pay the balance 2-3 days before my 45 days cycle ends and I have not paid interest as well.

    Thank you for this post.

  4. I have been using all my reward points for credit card use (which I always pay off each month so no interest/no fees) for cash redemption. I’m beginning to see that this might not give me the best bang for the buck as it is probably worth it to try and accumulate points for travel instead?

    What are you thoughts on cash back vs saving for travel using these points?

    1. I like both and I personally do both 🙂

    2. Jay

      Depending on credit card, many (most) of the time redeeming for cash will equal less benefit. For example, in most cases redemption award for airline tickets will be 1 point = 1 mile. 1 mile = $1. In this case, redeeming 500 points for a $500 airline ticket is a 1:1 ratio. However, that same credit card often times has a redemption ratio of 1 point = .50 cents when redeeming for cash. So, if you were to redeem 500 points for cash, you’d only receive $250.

  5. I’ve used travel rewards to travel to Europe, Mexico, Aruba and Hawaii. The cards can definitely pay off in that regard. I only wish I’d churned them earlier when it was easier to do so. I had a go-to card and basically used that for about 9 years straight.

  6. This is a great post, Michelle! I use credit cards for the exact reason you highlighted above – since you’re already going to be spending the money, you might as well rack up some points / free money!

    I do struggle with the temptation to spend more to reach the incentive offered. As a person who is currently living on a bare-bones / subsistence-only budget, it took a lot of research to find a card with a low minimum spend of $200 a month! (Which is amazing for me.)

    Between cash-back credit cards and travel rewards credit cards – which do you prefer?

    I currently only use cash-back credit cards, but I’m definitely going to be looking into applying for some awesome travel rewards credit cards soon! Thank you for the wonderful guide!

    1. Personally, I like both! They both have their positives 🙂

  7. Bernz JP

    Been using AMEX rewards for many years now and still love it. Wife and I love all the restaurant gift cards and the Airport lounge access points benefits. I’ve used it to purchase from Amazon and also use the gift cards as gifts. A few months ago they added a $15 Uber credit to the account every month and had used it a few times. You have to have good discipline when you own one of these cards or as you said got to use them responsibly.

  8. Jake @ The Morning Start

    Awesome post, Michelle. Travel credit card points are amazing!!! You just need to know how to use them after acquiring them. Using them efficiently will increase the longevity of your points. I can’t tell you how many time my points have saved my butt in unplanned situations where I needed to find a quick flight.

  9. Travel rewards credit cards don’t make sense for me personally, mainly because I always forget to use them during their promotional period, and those that offer the points year round are always crap when it comes to the rewards lol. However, for those that are super into travel hacking, I know this type of credit cards is HUGE, and can really add up in savings!

    1. There are great ones that offer year round rewards too! My Capital One Spark card gives 2% back 🙂

  10. Kim

    Having a credit card with a travel rewards program can be a great way to save money on travel just from spending as normal. But as you pointed out, it’s important to use it responsibly, else it won’t be worth it.

  11. Ray

    This article made me want to sign up for one but I always wonder this…
    Do you think Travel Rewards Credit Cards offer better value than Cash Rewards Credit Cards??

    I LOVE credit card rewards and have always used cash rewards credit cards only because it’s easy to evaluate how much of a value I’m receiving in terms of $$$. With Travel Rewards CC, I feel like I don’t know how much of value exactly I am receiving when I receive points in mileage.

    Any thoughts on this?

    1. I’m definitely no expert. I like having both types of cards, though!

  12. Steph

    In addition to the factors you highlight (pay it off, pay it timely, don’t be tempted to overspend), I think it’s important to think about how/whether you travel when selecting a card. For some, a card with a program that allows you to exchange points for a variety of air or hotel rewards may be great. For my family, our travel in recent years has been more about road trips and less about flying. Because of that (and travel for work where I get to keep my frequent traveler program credits), I found that a hotel-chain specific credit card was best. Spending points plus stay points have resulted in high program status for me. That means I get significant bonus points on stays (racking up points more quickly in the program) as well as a number of intangibles (I often am able to check into a hotel as early as 9 or 10 am; late check out at 4 pm; last minute reservations for unexpected travel; concierge floor access (which I often use for free breakfast, dinner, bottled water, etc); other privileges). It works really well for us and has resulted in thousands of dollars of free stays over the last several years. But I also recognize these rewards would make zero sense for someone with other travel habits and preferences. And if you don’t really travel much at all, a cash back card is probably a much better solution.

    Anyway, being a responsible credit card user is the first consideration. Really understanding the various programs and how they align with your travel needs is important as well in terms of deriving the most value from a selected card.

    1. Yes, responsible credit card usage is extremely important.

  13. I just so wish this was a thing where I’m from!

  14. Raz | MakeLivingGood

    Few months ago I bought air tickets using BoA travel cards and received about 20% cashback on purchases. It was great and saved me lots of money on tickets. I think credit cards are weapons of mass destruction unless used carefully. 🙂