Time to Stop Using Your Travel Rewards Credit Card

Until recently, I spent most of my spending on credit cards that offered me travel rewards. I preferred an airline card for personal expenses and a business travel card for freelance expenses. Since I (previously) traveled relatively often, I was very motivated to earn and burn travel rewards as quickly as possible. This week I switched my spending to credit card refunds.

The “why” should be too depressingly obvious: I seriously considered when I would be able to travel again and decided that my rewards would not do me much good for a long time. In the summer, professional conferences have already been canceled, and the chances of going on vacation out of town in the near future are very small … let’s say, unlikely .

So I put the travel rewards game on hold for now. Over the next few months – and maybe longer – getting cash back on your purchases seems like a smarter move.

If you want to apply a similar strategy, here are my tips for how to quickly switch everything:

  • Pick up your credit card statements and scan them for subscriptions or automatic payments. If you have a recurring payment assigned to a travel credit card, visit the applicable website or app and reassign that payment to a refund credit card.
  • Make refund cards the default option in your digital wallets.
  • Open your travel apps, online shopping apps, and other credit-related apps and add your refund cards as your default payment method.
  • Recheck your utility bills, monthly premiums, and other automatically paid services. They are usually very difficult to adjust and may take a full monthly cycle before the company accepts your new payment method; For example, I changed the automatic payments settings on my insurance company’s website, but my April premium is still automatically deducted from my travel reward card.
  • Don’t forget to change the card associated with your Amazon account!

When you switch automatic payments to refundable credit cards, it’s also a good opportunity to ask yourself if you really want to keep all those subscriptions, streaming services, premium apps, and so on. The process of changing cards took me only about five minutes; If you can take those five minutes to swap payment methods and cut your expenses, so much the better for your future financial health.

One final note: switch payments, yes, but don’t actually cancel those travel credit cards, unless it’s one of those that have high annual fees and you see yourself earning enough rewards to cover those costs. Closing a credit card that you no longer use is usually a bad move for your credit rating: you will lose some of the available credit (which means that the credit utilization rate will increase and your credit rating will decrease) and, if you close the oldest card in your disposal, you lose this crucial factor in the age of the loan.

As difficult as it may be to imagine now, you may one day want to re-use these travel reward cards. For now, let’s continue to work together to smooth this curve.


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