If you use a travel rewards credit card as I do, you’ve probably already realized that the points you’re earning right now are pretty useless given the current situation.
I’ve had to cancel multiple trips which have resulted in airline credits and points refunds. Sure, I’ll be able to use those when things to return to normal, but for now, I’m getting no value out of them whatsoever.
For the time being, I’m going to use my non-travel credit cards, but that’s easy for me to say since I have more than a dozen cards on hand. For the average person, they typically only have 2-3 cards so swapping cards may not be that easy.
If you’re using a travel credit card, here are some options that you should consider as now is a good time to switch your credit cards.
Do a product switch
For those of you with one of the best travel credit cards, it may be a good idea to product switch to one of the best cash back credit cards. All you need to do is call your credit card provider and tell them you’d like to product switch credit cards.
For example, if you have the BMO World Elite Mastercard, you could BMO Cashback World Elite Mastercard. This is possible as you’re switching from one credit card to another within the same provider. Alternatively, you could transfer to a no annual fee credit card if you’re trying to keep your expenses down.
Before you do a product switch, ask your provider if they’ll rebate the annual fee since you won’t be getting a full year’s worth. For example, if you’ve already paid your annual fee of $120, and you’re six months into the year, you can ask if they’ll rebate you $60.
Note that quite often when doing a product switch, you won’t be eligible for the sign up bonus that comes with the card you’re switching to.
Don’t forget to use up any remaining points you have before product switching as you’ll lose them. The easiest way to do that is to transfer your points to any available partner or to use them on gift cards or a statement credit. Keep in mind that using your points for travel usually gives you the best value, so if you use them for anything else, you’ll be devaluing your points.
Apply for another card
Instead of product switching, it might just be easier to apply for a new credit card. Since you already have a travel credit card that likely has an annual fee, I’d recommend a cash back card with no annual fee. By doing this, you’re basically putting your travel rewards on hold for the time being.
Of course, some people don’t like the idea of paying an annual fee for a credit card when they’re not using it. You could cancel your card, but then you need to deal with any outstanding points. No one knows how long the current pandemic will last, but I wouldn’t get rid of your travel points unless you’re experiencing cash flow issues.
Another solution would be to product switch from your high end travel credit card to an entry level one. Since it’s the same rewards program, you wouldn’t lose your points. The issue is, you can’t just product switch whenever you want. If travel bans are lifted, switching back to a premium card may not be that easy.
I’m really curious to see if American Express Platinum Cardholders will get any kind of break on their annual fee. I’m paying $699 for the card and am getting no value out of it right now.
Best cash back credit cards to apply for
I personally don’t recommend cancelling your travel credit cards or cashing in your points if you don’t have to at this time. That said, I do recommend that you stop using your travel credit cards as the points you earn have very limited value right now. The best thing you can do is to apply for a no fee, cash back credit card as you’ll be able to earn some immediate benefits. Here are the cards I recommend.
Tangerine Money-Back Card
- No annual fee
- 2% cash back on up to 3 categories
- 0.5% cash back on all other purchases
- Automatic monthly redemption with no minimum balance required
- Instantly pause your card
- Adjust your credit limit online
- Automatic pay my balance feature
- Purchase assurance and extended warranty
The Tangerine Money-Back is the ideal cash back card as it has no annual fee. You get to choose up to three categories that earn you 2% cash back while all other purchases get you 0.5%. What really makes this card stand out is that you can redeem your cash back every month without any minimum balance requirements. This is important as many other cash back cards have strict conditions if you want to cash out.
BMO Cashback World Elite Mastercard
- $120 annual fee – first year free
- 1.5% cash back on all card purchases
- Mastercard Airport Experiences provided by LoungeKey
- Complimentary roadside assistance program
- Concierge service
- Travel insurance
- Price protection
- Extended warranty
The BMO Cashback World Elite Mastercard is a premium cash back card that gives you an arguably earn rate as you’ll 1.5% cash back on all your purchases. In addition, there’s usually a sign up bonus where you’ll earn extra cash back in your first three months. There is an annual fee of $120, but it’s waived for the first year. Payouts happen annually, but you can also request a one-time lump sum payment as long as you have a minimum of $50 available in cash back.
This isn’t goodbye for your travel credit cards. Think of it as see you later. We’ll all be able to travel again, but who knows when that will be. You might as well earn cash back now while things play out.