Summer vacationers are using credit card rewards to cut travel costs, but many are unaware of hidden fees they'll have to pay on overseas credit card transactions.
Those are two findings of Capital One Financial Corporation's latest quarterly survey of how consumers accumulate and redeem credit card rewards.
"Given the current economic climate, high-value credit card rewards are becoming even more critical as consumers plan their summer getaways," the financial services company explained in a statement. "While about a third used their credit card rewards for summer travel last year, more than 40 percent plan to use their rewards for travel this summer."
Hotels, airline tickets and gas were the top choices of consumers who planned to redeem rewards as part of their summer travel plans, the survey found.
Other findings were that 43 percent of respondents had redeemed rewards in the last three months, but only 24 percent were completely satisfied with their current rewards program. Blackout dates and inability to book a last-minute trip were common frustrations for consumers who were unable to redeem rewards for travel services they wanted.
Thirty-six percent of the survey respondents said they planned to use credit cards rewards to travel outside of the U.S. But nearly 60 percent weren't sure whether they'd be charged foreign transaction fees on overseas credit card purchases. Those fees could add 2 percent to 3 percent to their vacation costs, Capital One said.
The company's statement also offered a few tips for summer travelers who want to turn credit card rewards into vacation savings:
- Match your rewards program to your travel habits. If you're not loyal to one specific hotel or airline, consider a program that's not tied to one particular brand.
- Read the fine print. If your rewards have expiration dates, you'll need to use them before you lose them.
- Budget for added costs. Fuel surcharges, baggage fees and foreign transaction fees on credit card purchases can make travel more costly than expected.
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