Travel Got Cheaper When I Stopped Making These Mistakes With Credit Card Rewards Points

This is how I squeeze every last drop of value from my points and miles.

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Travel rewards credit cards can make it possible to turn everyday purchases into your next vacation. But if you use your points the wrong way, you could end up leaving a lot of money on the table.

Here are five ways you may be losing value with your travel rewards points or miles.

1. Getting Cash Back

Cash back credit cards are great for people who want the flexibility of cold hard cash. But if you have a travel credit card, steer clear of redeeming points for dollars. With many travel rewards programs, you get much less bang for your buck with cash back.

For instance, if you have the Capital One Venture Rewards Credit Card you get 1 cent per mile on travel redemptions and just half a cent per mile if you request cash back.

The Chase Ultimate Rewards program is rare in that it offers a more balanced point structure for cardholders who want to cash in their points for money: 1 cent per point when you redeem for cash back. When I was new to travel rewards, that’s exactly how I used my sign up bonus with the Chase Sapphire Preferred. Back in 2013, I got $400 for the 40,000 points I earned with the card’s introductory incentive. While that’s on par with what you might get with a cash back credit card, I could have redeemed those points for $500 in travel if I had used the rewards to book travel through Chase’s Ultimate Rewards portal instead.

2. Merchandise

clothing hangs on a rack in a store
Credit: /outline205

Some rewards programs allow you redeem points merchandise catalog items like electronics, household appliances, travel accessories and more. This may be tempting if you’ve had your eye on a product, but don’t have the cash in hand to pay for it. But you’ll do better to use your points or miles for what they were intended: travel.

For example, American Express allows you to buy merchandise with points at a value of 0.5 cents per point. But if you use your points to buy gift cards or to book airfare, you can get up to 1 cent apiece in value.

If you transfer your points to one of Amex’s airline or hotel transfer partners—one of the best ways to maximize travel rewards—you could potentially earn even more.

3. Experiences

Select travel credit cards, especially ones with airline and hotel loyalty programs, give you the option to redeem your points or miles for experiences like concerts or sporting events, instead of free flights or hotel stays.

In 2016, for example, I used 44,250 British Airways Avios to purchase three one-day tickets to Disneyland, giving me a value of 0.75 cents per Avios (park tickets cost $110 each at the time). However, I could have gotten more value than 0.75 per point. According to Upgraded Points, the British Airways’ rewards currency is worth 1.3 cents each on average when you redeem for award flights.

In some cases, experiences may be more valuable to you than airfare, especially when the experience is only offered through your credit cards rewards programs. But always compare the experience with what you could get with actual travel redemptions to avoid missing out.

4. Pay with Points

Some rewards programs allow cardholder to use points to make purchases with select online retailers. With the Chase Sapphire Preferred and other cards that earn Chase Ultimate Rewards, you can get 0.8 cents per point when using your points on Amex Membership Rewards can be used with several retailers at a rate of 0.7 cents per point.

Again, if you’ve racked up a lot of rewards, your points can save you money at checkout. But remember, the more often you use your points this way, the more value you’re missing out on.

5. Subpar Hotel or Airline Redemptions

With general travel credit cards, your rewards typically have a set value per point or mile, depending on how you use them (travel, cash back, gift cards, merchandise, etc.). With airline and hotel point redemptions, however, the value of your rewards can fluctuate, even when you’re redeeming for a free flight or hotel stay.

To make sure you’re getting good value, look at different flight or hotel options, and compare the point redemption rate you’d get from each.

If one hotel charges $500 or 50,000 points, you’re getting 1 cent per point. But if a stay at a different hotel in the area costs $500 or 40,000 points, you’ll get 1.25 cents per point, making it the better option. The same strategy works for frequent flyer miles.

Popular Annual Fee Credit Cards That Offer Valuable Rewards Points Programs

a couple enjoy the view from a rooftop pool
Credit: /Orbon Alija

Whether you’re new to rewards credit cards or thinking about adding a new card to your wallet, these are a few of the most popular credit cards from Slickdeals Credit Card Hub. If travel is an important part of your life, our guide to the 10 best travel rewards credit cards is a perfect resource for people who want to earn travel rewards with their pre-budgeted spending.

Chase Sapphire Preferred

If you aren’t ready for the hefty annual fee that comes with premium cards, the Chase Sapphire Preferred may be the next best thing. The Chase Sapphire Preferred features a lower annual fee ($95) and many perks. New cardholders can earn up to $750 in travel when they spend $4,000 in their first three months. Earn 2X points on travel and dining and 1 point per dollar spent on other purchases. Points go 25% farther when redeemed on travel. Plus, this card has no foreign transaction fee, so you can use it freely on your trip to Tuscany.

  • Annual Fee: $95
  • Value: 2x points on travel and dining
  • Sign-Up Bonus: 60,000 points after spending $4,000 during the first three billing cycles
  • Pro: No blackout dates for point redemption
  • Con: High spending threshold to reach sigh-up bonus

Learn More About the Sapphire Preferred

Bank of America Premium Rewards

The Bank of America Premium Rewards Visa is another great card for travelers who want to begin earning points, but aren’t ready for the steep annual fees of premium credit cards. With a $95 annual fee, the Premium Rewards Visa offers new cardholders 50,000 points when they spend $3,000 in the first three billing cycles. It also gives 2x points on travel and dining, and 1.5X points for every $1 spent on other purchases. Your points don’t expire, and you can redeem them for cash back or gift cards too.

  • Annual Fee: $95
  • Value: 2x points on travel and dining
  • Sign-Up Bonus: 50,000 points after spending $3,000 during the first three billing cycles
  • Pro: 1.5x points on general purchases
  • Con: Highest rewards value limited to Bank of America Preferred Rewards members

Learn More About the Premium Rewards Visa

American Express Platinum Card

The American Express Platinum makes traveling with the family a little less frazzled with annual Uber, airline and hotel credits, and access to over 1,200 Centurion Lounges for you and two guests. New cardmembers will earn 60,000 points when they spend $5,000 in their first three months. The Platinum Card comes with a hefty $550 annual fee, but it’s a favorite among many cardholders because of its generous 5x points for flights and hotels booked through American Express Travel, as well as an annual $200 airline credit to cover baggage fees and other qualified reimbursements.

  • Annual Fee: $550
  • Value: 5x points for flights and hotels booked through American Express Travel
  • Sign-Up Bonus: 60,000 points after spending $5,000 in the first three billing cycles
  • Pro: $200 annual airline credit
  • Con: Only 1 point per eligible dollar spent

Learn More About the Platinum Card

The Bottom Line: How to Maximize Point Redemption

When it comes to point redemption, it’s important to understand which options your credit card offers and the redemption rate for each. While you may not be able to squeeze the maximum value out of your points or miles every time, you’ll be doing yourself a favor when you avoid certain options altogether.

Comparing Rewards Credit Cards

Still uncertain about which rewards credit card is right for you? We get it. Choosing a credit card that meets your needs is important, which is why Slickdeals’ Credit Card Hub helps you compare the benefits of different cards, search credit cards by rewards categories, and explore cards by their issuers — all to find the best fit for your wallet.

NEXT: I Get Triple Rewards Whenever I Book Travel; Here’s How I Do It

We want to make sure you get the best deal! Our editors strive to ensure that the information in this article is accurate as of the date published, but please keep in mind that offers can change. We encourage you to verify all terms and conditions of any financial product before you apply. Also, please remember this content wasn’t provided, reviewed or endorsed by any company mentioned in this article.

Ben Luthi

Ben Luthi is a personal finance and travel writer and credit card expert. He has a degree in finance from Brigham Young University and worked in financial planning, banking and auto finance before writing full-time for NerdWallet and Student Loan Hero. Ben is now a full-time freelance writer and enjoys traveling and spending time with his two kids. His work has appeared in several publications, including U.S. News & World Report, USA Today, Money, Success and Slickdeals.

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