With many destinations off the table and many trips on hold, a big question looms for travellers this year: What’s the point of frequent flyer miles if you can’t fly often? “It’s hard to justify credit cards with sky-high annual fees right now,” says Sara Rathner, travel rewards expert at personal finance company Nerdwallet. “The perks that usually drive the price down, like a credit toward the cost of Global Entry or lounge access, mean nothing if you don’t set foot in an airport.”
Fortunately, issuers such as American Express, Capital One, Chase and Citi have updated popular cards to make them more useful when customers are closer to home. Citi Premier ($95 annual fee) still offers three points per dollar on airline and hotel purchases, but this summer Citi added similar three-for-one rewards on restaurant and supermarket purchases.
The Chase Sapphire Reserve ($550 annual fee) typically offers $300 in annual travel credits; until June, these can also be applied to gas and groceries. Until April, the card earns three points per dollar on up to $1,000 spent at grocery stores each month. Through April, Chase will also allow Sapphire Preferred ($95 annual fee) and Sapphire Reserve cardholders to redeem Ultimate Rewards points for up to 1.5 cents each on grocery and home improvement purchases and charitable donations. Previously, this great redemption rate was only available when redeeming Chase points for travel.
The popular American Express Platinum ($550 annual fee) pivoted in May, giving cardholders up to $320 in statement credit to use on streaming subscriptions such as Hulu and Netflix, as well as wireless phone service. Although that promotion ended in December, Amex has added a free Uber Eats Pass membership (normally $10 per month) to its perks for this year, which waives Uber delivery fees on restaurant and grocery orders.
However, until the pandemic restrictions are lifted, many consumers may be better off switching from a travel-focused card to one that offers cash back. The Amex Blue Cash Preferred ($95 annual fee), for example, earns 6 percent back on streaming subscriptions and up to $6,000 a year spent at US supermarkets. It also earns 3 percent back on gas and transit, and 1 percent on everything else. Chase recently announced rich cash-back benefits for its Freedom Unlimited and Freedom Flex cards (both with no annual fee). Both earn 3 percent on restaurant and drugstore spending. The Unlimited also earns 1.5 percent on other purchases. The Flex adds 1 per cent on most other spending, plus 5 per cent on rotating categories such as groceries and gym memberships.
Think twice before simply cancelling 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, which many issuers will do with little fuss.
Whatever your strategy, this could be a good time to start saving for that epic trip you want to take once travel restrictions are lifted. “It takes time to accumulate a six-figure sum in travel rewards,” advises Rathner. “Consider using that 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.