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Are Travel Rewards Credit Cards Worth It? Here's the Truth Nobody Tells You
Debt Freedom

May 3, 2026

Phase 2: Clear the Ground

Are Travel Rewards Credit Cards Worth It? Here's the Truth Nobody Tells You

3 min read

by:
Anthony O'Neal
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Are Travel Rewards Credit Cards Worth It? Here's the Truth Nobody Tells You

Free flights sound amazing — but is it really that simple? Let's break it down.

Listen, family. I see the ads. You see the ads. "Sign up for this credit card and get 80,000 bonus miles!" Free flights. Free hotel stays. Airport lounge access. Sounds like a dream, right?

But here's what nobody's telling you: 78% of Americans are carrying credit card debt right now. And the average credit card interest rate is sitting above 20%. So before you chase those "free" flights, we need to have an honest conversation about whether travel rewards credit cards are actually helping you — or quietly stealing your wealth.

Real talk. Let's get into it.

Who Should Even Consider a Travel Rewards Card?

Before we go any further, let me be clear. This conversation is not for everyone.

If you're carrying credit card balances right now, stop reading and go work your debt snowball. I'm serious. No amount of airline miles is worth paying 22% interest. That's not a reward — that's a trap.

But if you meet all three of these conditions, keep reading:

  • You are 100% consumer debt-free
  • You pay your credit card balance in full every single month — no exceptions
  • You have a strong credit score and a fully funded emergency fund

If that's you, then yes — a travel rewards card could be a strategic tool. Not a lifestyle. A tool.

"It's not about how much you make. It's about what you do with what you have."

How Travel Rewards Cards Actually Work

Let me put this on the bottom shelf for you.

Travel rewards cards give you points or miles for every dollar you spend. You rack up enough points, and you can redeem them for flights, hotels, rental cars, and other travel expenses.

Most cards also offer a sign-up bonus — sometimes worth hundreds of dollars in travel — if you spend a certain amount within the first few months.

Here's the basic structure:

  • Sign-up bonus: Spend $3,000–$5,000 in the first 3 months, get 50,000–80,000 bonus points
  • Ongoing rewards: Earn 1–5 points per dollar on purchases (depending on the category)
  • Redemption: Use points for flights, hotels, car rentals, or statement credits
  • Annual fee: Ranges from $0 to $695 depending on the card

Sounds straightforward. But the devil is in the details.

The Real Benefits Worth Knowing About

Now, I'm not going to sit here and act like there aren't some legitimate perks. There are. Here are the ones that actually matter:

1. Airport Lounge Access

If you travel even a couple times a year, this one adds up fast. Airport food is expensive. A meal and a drink at the terminal can run you $30–$50 easy. Lounge access gives you free food, drinks, Wi-Fi, and a quiet place to work or rest. Over a year, that alone can offset a good chunk of your annual fee.

2. Travel Insurance Built In

Many travel rewards cards include trip delay coverage, lost baggage reimbursement, and trip cancellation protection. This means you may not need to buy separate travel insurance — which can cost $50–$200 per trip depending on the destination.

That's real money saved without doing anything extra.

3. Rental Car Insurance

This is one a lot of people sleep on. Rental car companies charge $25–$35 per day for their insurance coverage. If your travel card covers rental car damage, you can decline that add-on and save hundreds over the course of a year.

4. Travel Credits

Some premium cards offer annual travel credits — $200 to $300 that automatically reimburse you for travel purchases like train tickets, rideshares, or flights. If you're already spending that money, the credit essentially reduces your annual fee.

The Dangers Nobody Wants to Talk About

Here's where I need to keep it real with you, family. Because the credit card companies are not your friends. They are businesses designed to make money off of your spending behavior.

High Interest Rates Will Destroy Any "Reward"

The average travel rewards card charges 20–24% APR. If you carry a balance — even once — the interest you pay will wipe out every single mile you earned. Every one.

Let me show you the math:

  • You earn 50,000 bonus miles worth roughly $500 in travel
  • You carry a $3,000 balance for 6 months at 22% interest
  • You pay approximately $330 in interest alone

You just gave back 66% of your "free" reward. That's not winning. That's losing slowly.

Annual Fees Add Up

Some of the most popular travel cards charge $95 to $550 per year. If you're not actively using the benefits — the lounge access, the travel credits, the insurance — you're paying for perks that sit on the shelf.

Think of the annual fee as prepayment for benefits. If you won't use them, you're throwing money away.

The Temptation to Overspend

This is the one that gets most people. When you know you're earning "points" on every purchase, your brain starts justifying spending you wouldn't normally do.

"I'll just put it on the travel card for the points."

That mindset is dangerous. You don't manufacture spending to earn rewards. You earn rewards on spending you were already going to do. Period.

So Are They Actually Worth It?

Here's my honest answer: It depends on your discipline.

If you are debt-free, you pay your balance in full every month, and you travel at least once or twice a year — a travel rewards card can be a smart, strategic tool that saves you real money.

But if you're using it as an excuse to spend more, if you're carrying balances, or if you're chasing points like it's a game — you're playing yourself.

Here's a simple test. Ask yourself:

  • Can I pay this balance in full when the statement comes? Every single time?
  • Am I spending money I would have spent anyway?
  • Will I actually use the benefits this card offers?

If the answer to all three is yes, it could work for you. If any answer is no, stick with your debit card and keep building wealth the proven way.

What I Recommend If You're Just Getting Started

If you've never had a travel rewards card before, don't start with the $550-a-year premium card. That's like buying a Ferrari as your first car.

Start modest. Look for a card with:

  • A low annual fee ($95 or less) or one that's waived the first year
  • A solid sign-up bonus with a spending requirement you can hit naturally
  • No foreign transaction fees if you travel internationally
  • Rewards that match where you already spend (groceries, gas, dining)

Try it for one year. Track your rewards. Compare them against the annual fee. If the math works, keep it. If it doesn't, cancel it and move on.

"Cookie jar on the bottom shelf — keep it simple, keep it strategic."

Your Action Step This Week

Here's what I need you to do right now:

  1. Check your current credit card situation. Are you carrying any balances? If yes, pause on travel cards and go attack that debt with the debt snowball method.
  2. If you're debt-free, evaluate whether a travel rewards card fits your actual spending habits — not the lifestyle you wish you had.
  3. Never sign up for a card just for the bonus. Make sure the ongoing benefits justify the cost year after year.

Conclusion

Look, family — travel rewards credit cards aren't evil. But they're not magic either.

They're a tool. And like any tool, they can build something beautiful or they can cause serious damage depending on who's holding it.

The credit card companies are betting that you'll overspend, carry a balance, and pay them interest for years. Don't prove them right. If you're going to play this game, play it smart. Be disciplined. Pay it off every month. And never, ever let a piece of plastic control your financial future.

The goal isn't free flights. The goal is freedom. Time freedom. Financial freedom. The kind of freedom where you can travel the world — and pay cash for it.

Now I want to hear from you: Have you ever used a travel rewards card? Did it help you or hurt you? Drop it in the comments — let's talk about it.

Keep building,

ABOUT THE AUTHOR
Full name

Anthony O'Neal is a bestselling author, speaker and personal finance educator. He teaches families how to get out of debt and build real wealth on any income through The Escape Plan, his show The Table with AO, and the In the Black app.

About the Author

Anthony O'Neal

Anthony O'Neal is a #1 national bestselling author of Debt-Free Degree, personal finance expert and host of the popular podcast and YouTube show "The TABLE." Since 2014 he has challenged cultural norms and equipped millions of people to live a debt-free life, break generational wealth-gaps and build true wealth. He has appeared on Good Morning America, Live! with Kelly and Mark, Fox & Friends, Rachael Ray, The Tamron Hall Show, CNN News and has been featured in Success Magazine, MarketWatch, Bloomberg, Black Enterprise and GOBankingrates, among others. Anthony is a sought after, dynamic public speaker, speaking on stages with audiences of 40k+ people and an adjunct professor at Virginia Union University in Consumer Economics. He has been recognized by Black Enterprise as Top 40 Under 40 (2023) and Top 25 Personal and Professional Development Influencers to Follow by Success Magazine (2023). He is the author of Take Your Seat at The Table: Live an Authentic Life of Abundance, Wellness, and Freedom, and his latest book, Stop Living Paycheck to Paycheck. He resides in the Washington, DC suburbs.

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