Not Utilizing Your Travel Rewards Could Lead To Substantial Debt
Monday, August 8, 2016
A recent telephone study conducted by Harris Poll on behalf of the American Institute of CPAs suggests that most Americans don’t end up using their travel rewards, resulting in completely avoidable debt when they return home.
The study revealed that only 15 percent of Americans used rewards points to pay for part or all of their vacations, while 14 percent say they’ve taken a trip that has pushed them into credit card debt.
Oddly enough, this is coming at a time when most travel sites are posting about “travel hacks”, or ways to travel efficiently and cost-effectively. Twelve percent of the people surveyed said they had opened a credit card to receive hotel or airline rewards, while six percent chose a more expensive flight or hotel to earn travel rewards points. Six percent have taken a trip just to maintain or upgrade a rewards level. But only seven of Americans used rewards points to pay for any part of their last vacation, with only one in a hundred paying for their entire trip using points.
“When chasing after elite status with hotels and airlines, it’s important to not lose sight of the fact that miles and points often have a dollar value associated with them,” said Gregory Anton, CPA, CGMA, chair of the AICPA’s National CPA Financial Literacy Commission. “Spending extra money in hopes of earning free nights and flights has the very real potential to leave Americans feeling like they’ve been travel hacked when their credit card payments are due.”
The survey also revealed that 14 percent of Americans have suffered negative financial consequences as a result of their vacation. A resounding 12 percent are presently carrying a balance or paying interest on their credit card, three percent are missing a payment or being charged a late fee, and two percent are going over the spending limit on their credit card while on vacation.
Looking for more information on the AICPA survey? Speak to a member of the National CPA Financial Literacy Commission by contacting Marc Eiger at 212-596-6042, [email protected], or James Schiavone at 212-596-6119, [email protected].
