Travel reward credit cards have a number of benefits.  After all, what could be better than earning points toward a vacation simply by making purchases you were planning to make anyway?  In addition, many of these cards offer additional perks such as travel insurance, lost luggage insurance, and car rental insurance.  Despite all of the benefits associated with travel reward credit cards, however, there are some potential drawbacks to these cards as well.  Therefore, before deciding to apply for a family reward credit card, you should evaluate both the pros and cons before deciding if it is right for you.

 

Higher APRs

 

Perhaps the biggest drawback to having a travel reward credit card is the fact that these cards tend to have higher APRs than traditional credit cards.  Whereas your credit may be good enough to get you a card with an APR less than 8%, you might find yourself paying 12% or more when you carry a travel reward credit card.  If your credit is not quite so good, you may even pay over 20% for one of these cards.

 

Getting socked with a higher APR can add up quickly and can cost you a bundle in finance charges.  Therefore, unless you plan to pay the balance in full at the end of each billing cycle or will be carrying a balance only on rare occasions, you probably should skip on the travel reward credit cards until your finances are under a little bit better control.

 

Black Out Dates and Restrictions

 

Although more and more travel reward credit cards are hitting the market that offer consumers increased flexibility, many of these cards still have blackout dates and other restrictions.  Therefore, if you are not flexible in making travel arrangements, you might never find the opportunity to cash in on the points you have earned.  Make sure to check out the travel restrictions of the card before you apply in order to prevent being disappointed later.

 

Limitations on Travel Companies

 

While some travel reward credit cards are “blanket” travel cards that allow travelers to make travel plans with any company they choose, some place restrictions on who the travel points can be redeemed through.  For example, you might be restricted to making your plans with just one airline or with one hotel chain.  If you are completely loyal to one line and do not have a problem with these restrictions, one of these cards may not be problematic to you.  At the same time, the lack of flexibility can make travel planning more difficult.

 

Expiring Points

 

Some travel reward credit cards issue points that never expire, but this is not always the case.  If you do not spend a great deal of money each year, it will take you some time before you spend enough money to earn the points it takes to cash in on a travel reward.  If the points you earn expire after a year or two, you may never be able to take advantage of the rewards system.  If you know that it will take you some time before you earn enough points to cash in on the rewards program, make sure to choose a card that does not have an expiration date on when the earned points need to be used.