While 33% of rewards card holders said they intended to use their loyalty rewards for summer holidays, only 21% redeemed them for travel related rewards, according the Capital One 'Rewards Barometer' study. This article is copyright 2012 The Best Customer Guide.

The quarterly survey among American consumers found that the top barrier preventing people from using their rewards points for travel was not having enough rewards to book the trip they wanted (43%). Blackout dates and lack of availability also prevented many cardholders from redeeming their rewards for travel.

"Card holders should understand that sometimes it can be difficult to use the rewards they've earned with some programmes," said Amy Lenander, Vice President of Rewards programmes at Capital One.

When card holders redeem rewards for travel, their trip is not always as free as expected since they are sometimes charged extra for airline taxes, fuel surcharges, and booking fees when they redeem. In fact, 37% of cardholders who used rewards for travel still had to pay fees when they redeemed their rewards.

However, more than one-third of respondents surveyed were not sure if they would be charged a fee or additional expense when using rewards to book travel.

Not only are card holders often unaware of the extra fees charged for rewards redemption, but more than half of the respondents (52%) are not even sure if they are likely to be charged foreign transaction fees on their credit card purchases while traveling abroad.

But, as summer travel winds down, consumers can will start planning to save using credit card rewards for back-to-school and everyday shopping. With 60% of surveyed parents with rewards cards planning to spend anything from US$101 to US$500 per child on back-to-school expenses, credit card rewards (such as cash back) lessen the overall impact on their wallets.

The holiday shopping season will also see 32% of rewards card holders redeeming rewards toward holiday gifts, with 13% already having specific plans to do so. Among those with plans to redeem for holiday gifts, more than half will choose gift cards (58%), while only 18% will choose merchandise.

Among the other key findings of the report:

  • Since the launch of the Rewards Barometer in the spring of 2011, free money remains the top motivation for consumers to earn and redeem rewards at 59%.
  • Cash remains the top rewards redemption option at 42%, followed by domestic airline tickets (31%) and gift cards (28%).
  • Redemption rates remain consistent in 2012, with an average of 44% redeeming in the prior three months.
  • More than 90% of rewards card holders continue to be satisfied, very satisfied or completely satisfied with their rewards credit card.