Now's the Time to Rethink Your Travel Rewards Card — Here Are the Ones That Still Make Sense

Illustration of woman boarding a plane via a staircase

With numerous destinations off the table and many trips on hold, a big question looms for travelers this year: What's the point of frequent-flier miles if you can't fly frequently? "It's hard to justify credit cards with sky-high annual fees right now," says Sara Rathner, a travel rewards expert at the personal finance company Nerdwallet. "The perks that normally drive down the price, like a credit toward the cost of Global Entry or lounge access, mean nothing when you don't set foot in an airport."

Fortunately, issuers including American Express, Capital One, Chase, and Citi have updated popular cards to make them more useful as customers stay closer to home. Citi Premier ($95 annual fee) continues to offer three points per dollar on air and hotel purchases, but this summer Citi added similar three-for-one rewards for purchases at restaurants and supermarkets.

The Chase Sapphire Reserve ($550 annual fee) typically offers $300 in annual travel credits; through June, these can also be applied to gas and groceries. Through April, the card will earn three points per dollar on up to $1,000 spent at grocery stores every month. Chase will also let Sapphire Preferred ($95 annual fee) and Sapphire Reserve users redeem Ultimate Rewards points at up to 1.5 cents apiece for purchases at grocery and home improvement stores and for charitable donations through April. Previously, that advantageous redemption rate was only available when cashing in Chase points for travel expenses.

The popular American Express Platinum ($550 annual fee) pivoted in May to give cardholders up to $320 in statement credits to be applied toward streaming subscriptions like Hulu and Netflix and wireless phone service. Though that promo ended in December, Amex has added to its perks for this year a free Uber Eats Pass membership (normally $10 a month), which waives Uber delivery fees on restaurant and grocery orders.

Until pandemic restrictions abate, though, many consumers might be better served by switching from a travel-focused card to one that guarantees cash back. The Amex Blue Cash Preferred ($95 annual fee), for example, earns 6 percent back on streaming subscriptions and on up to $6,000 a year spent at U.S. supermarkets. It also earns 3 percent back on gas and transit and 1 percent on everything else. Chase recently announced rich cash-back perks for its Freedom Unlimited and Freedom Flex (no annual fee for either). Both earn 3 percent on restaurant and drugstore spending. The Unlimited also gets 1.5 percent on other purchases. The Flex adds 1 percent on most other spending plus 5 percent on rotating categories like groceries and gym memberships.

Think twice before simply canceling a card, however, as closing an account can have a negative impact on your credit score. Instead, consider downgrading to a product with a lower (or no) annual fee, something many issuers will do with little fuss.

Whatever your strategy, this could be a good time to save for an epic trip to be taken once travel restrictions are lifted. "It takes time to stockpile a six-figure sum of travel rewards," Rathner advises. "Consider using this time to accumulate points and miles for the future."

A version of this story first appeared in the January 2021 issue of Travel + Leisure under the headline Now's the Time to Rethink Your Travel Rewards Card.

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