Cruise Credits: Are they worth it?

Beginning in early March, cruise lines that port in the United States began to suspend or cancel planned voyages during what is typically their busiest season of the year. Nearly 32 million people were expected to take a cruise in 2020, according to the Cruise Line International Association (CLIA). But now, due to the worldwide outbreak of Coronavirus (COVID-19), millions of people are facing a future of cumbersome refund policies instead of tropical beaches.

If you’re one of the millions of people enduring hours of hold time while trying to get a refund, you may be understandably frustrated with the process.

If you have been able to get in touch with a cruise line representative, you were probably offered something called a “cruise credit” in lieu of a traditional refund. Most cruise lines based in the United States are currently offering competitive rates for customers who choose to take a cruise credit for a future trip instead of a refund. Some cruise lines are offering cruise credits worth more than the original trip — some as high as 125 percent of the principal trip value.

Before you jump on what may seem like a great offer, however, consider the pros and cons of “cruise credits”.

What are Cruise Credits?

An easy way to understand cruise credits is to look at them like gift cards. If you paid for a cruise that was canceled, the cruise line can offer you a cruise credit to be applied towards a future cruise. This money — typically equal to or more than the original trip value — acts as a gift card to be applied to a future cruise. If you’re offered a cruise credit that exceeds the value of your original cruise, you can often use the added value towards onboard experiences such as spa trips and excursions.

Current Cruise Credit Offerings:

What to consider when deciding between a cruise credit or traditional refund:

 The benefits of taking a cruise credit instead of a traditional refund are clear. With many cruise lines, cruise credit offerings are worth more than the original value of the cruise. Most notably, cruise lines such as Holland America will give passengers who choose a cruise credit over a traditional refund an additional 25 percent credit on the original cruise value and $250 in onboard credit per passenger.

If you have the flexibility to reschedule your cruise for an undetermined date in the future, a cruise credit could be a good way to get additional value out of your trip. But, if your schedule in the next year does not lend itself to impromptu vacations, you may want to consider taking the refund instead.

While the rate of coronavirus infections is declining in some parts of the world, it’s still very much on the rise in others. The cruise industry hopes it can resume scheduled cruises in the early summer, but whether or not that will actually happen remains to be seen.

Cruise lines are incentivized to offer these competitive cruise credits because they want to keep as much revenue they have already collected as possible. As a consumer, you have the ability to shop around and find the best future deals possible. Though the exact date that regular travel and cruises can resume is unknown, the travel industry is already showing that the potential for huge deals and savings is on the horizon. If you choose a refund on your cruise now, you will likely be able to book a great deal on a future cruise in the coming weeks and months.

Cruise Refund Policies:

Final Thoughts

Planning future travel during a pandemic can seem like an uncertain venture at best. Rescheduling canceled travel when the near-future seems uncertain can be even more daunting. If you had a cruise canceled because of COVID-19, know that you’re not alone in navigating a confusing system of refund policies and cruise “credits”.

While both options have their benefits, a traditional refund will allow you more flexibility when planning your next cruise, while a cruise credit will lock you in with a cruise line (but may also come with an additional financial incentive). If you want to take advantage of a cruise credit but you’re worried about having to cancel or reschedule (yet again) due to the uncertainty of travel, a credit card that offers travel insurance may give you peace of mind on future vacations.