How the credit card rewards game will change in 2021

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While many rewards enthusiasts were once staunchly against redeeming points for anything other than high-value flights or luxury hotels, the pandemic quickly changed all of that. Practically overnight, points and miles aficionados were left with a stash of rewards that could barely be redeemed for a domestic flight, much less a stay at the Hilton Molino Stucky Venice or a one-way ticket in Singapore Suites.

But we now have multiple vaccines, and rumor has it the Biden administration plans to ease at least some travel restrictions for Mexico, Canada, Europe, the United Kingdom and Brazil come mid-May. This means it’s possible the world of travel could hopefully begin getting back to normal sooner rather than later. Anything could happen, but at least we have reason to hope.

All of this may make you wonder—what other changes could we see come down the pipeline in 2021? Here are some of the trends to expect:

Flexible travel credit cards will remain prominent

Travel credit cards with flexible redemption options will remain popular throughout 2021 as travel uncertainty continues and as consumers focus on rewards that can be redeemed in more than one way. After all, one could easily skip over airline credit cards and sign up for a card like the Chase Sapphire Preferred® Card or Chase Sapphire Reserve® instead. These rewards credit cards let users avoid being locked into a single airline program and instead give them the chance to redeem their rewards for any flight, hotel stay, rental car, experience or cruise that’s available through the Chase Ultimate Rewards portal.

Also, remember that the Chase Ultimate Rewards program lets users transfer points 1:1 to airline and hotel partners like Southwest Rapid Rewards, British Airways, United MileagePlus and IHG Rewards. If none of those options work, Chase points can be redeemed for merchandise, gift cards or cash back.

If you want to make sure you don’t get stuck with points or miles you can’t use, consider checking out other flexible programs like Citi ThankYou and American Express Membership Rewards.

Flexible redemption options could be here to stay

Remember the Chase “Pay Yourself Back” promotion? This program, which has been extended through Sept. 30, 2021, for some of its card products, lets consumers redeem their points for extra value in categories that include home improvement stores, grocery stores, dining and more.

The Chase Sapphire Preferred lets you get 1.25 cents per point in value for these redemptions and the Sapphire Reserve gets you 1.5 cents per point—both options letting you receive the same value as you would through the Chase Ultimate Rewards travel portal.

Other rewards changes came about due to the pandemic (and could be permanent), including the option to redeem rewards from the Capital One Venture Rewards Credit Card or Capital One VentureOne Rewards Credit Card for purchases made through PayPal.com or Amazon.com. Through Jun. 30, 2021, both cards are also letting customers redeem their miles for restaurant delivery and takeout, as well as purchases made with select streaming services like Hulu, Netflix and Disney+.

Award availability will remain plentiful… at least for now

I don’t know about you, but I am practically itching to use airline miles for international flights. The same is true for my stash of World of Hyatt and Hilton Honors points, both of which have been largely useless as I continued growing them over the last year.

Fortunately, those of us who get out and travel early may be in the best position to take advantage. Across major hotel and airline loyalty programs, award availability for award travel is very plentiful at the moment.

Do a quick search with your favorite frequent flyer program and you’ll see what I mean. My family is currently hopeful for international travel to Europe this fall, and I haven’t had any trouble finding four decently-priced award seats to cities like Athens, Lisbon and Paris across major programs I typically use, like Delta SkyMiles, Air France/Flying Blue and American AAdvantage.

If you’re angling for international travel this year, it may be better off to go ahead and book what you want now, provided a flexible cancellation policy is in place. That way, you can lock in your travel but cancel if you need to.

Earning elite status will be easier this year

Almost all hotel and airline programs extended elite status for 2020 members into 2021, and many are making it easier to earn elite status in 2021 for the remainder of this year (and 2022 as well).

For example, the Hilton Honors program extended elite status for members with status expiring in 2020 and 2021 until Mar. 31, 2022. They also rolled over all elite qualifying nights earned in 2020 to this year (2021), and they halved their elite status requirements for 2021 at the same time.

Delta Air Lines also extended all elite status earned in 2020 forward into 2021, with a final expiration date of Jan. 31, 2022. All Medallion Qualification Miles (MQMs) earned in 2020 were also rolled over into 2021 for use toward this year’s elite status requirements.

Regardless of which airline or hotel program gave you status in 2020, it’s also certain you received some benefit that makes earning elite status this year easier than before.

Look out for new travel credit cards and better bonus offers

Finally, don’t forget that every year brings about new travel credit cards as well as new bonus offers on existing cards. This year won’t be any different, so you should make sure you’re ready to strike while the iron is hot.

For example, we’ve already seen higher welcome bonus offers this year on co-branded Delta Air Lines credit cards, and the American Express® Gold Card—which recently made its popular Rose Gold color option permanent—also has a high-value offer right now. Specifically, you’ll earn 60,000 points when you spend $4,000 within six months of account opening.

These are some of the best credit card offers right now, but like always, more are on the way. While the pandemic has created a lot of uncertainty when it comes to credit card rewards, this is one thing we know for sure.

Written by
Holly D. Johnson
Author, Award-Winning Writer
Holly Johnson began her career working in the funeral industry, which may make you wonder why she works in personal finance now. Yet, the funeral industry taught the author everything she needs to know about the value of one's money and time. Johnson left the mortuary business a decade ago in order to explore her passion for personal finance and travel the world, and since then, she and her husband have built a debt-free lifestyle that has them on the path to retire very wealthy in their 40s. Holly's love of budgeting also led to the creation of her debt payoff book, “Zero Down Your Debt: Reclaim Your Income and Build a Life You’ll Love."
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