10 Common Credit Card Paying Mistakes to Avoid

A travel credit card can be your ticket to big savings on flights, hotels, car rentals, and other travel expenses. But how do you know if you’re using your travel pass to the fullest?

For example, are you using card features and benefits such as priority boarding, airport lounge access, or free baggage check-in during your flight? A 2021 Bankrate survey found that almost one in three credit card users (31 percent) did not use any rewards in 2020.

Avoiding these mistakes is the key to getting the most out of your travel credit cards.

Here are 10 other common pass mistakes to avoid on your way to maximum savings:

1. Exchange trip rewards for cashback

Your travel credit card may allow you to redeem miles or points for cash back, but that doesn’t mean you should.

“Most of the time, it’s never a good idea to redeem Reward Points for cash because the journey you can take with those points or miles is far more valuable,” says J. R. Düren, personal finance expert at Highya.

Duren pointed to the Chase Sapphire Preferred Card as an example of the value you can lose by choosing cash over travel.

“If you get 40,000 points, the cash value of those points is $400,” he says. But trading for a trip through Chase Ultimate Rewards earns you a 25 percent bonus, pushing the value up to $500.

Using your travel points gives you a $100 advantage, but you can increase that amount even more by transferring points to one of Chase’s travel partners. Using Hyatt’s loyalty program as an example, Duren says booking eight nights with these points can save you over $800.

In this case, the monetary value of your points is doubled. You don’t have cash, but there’s something even better: saving nearly $1,000 on travel.

2. Loss of value in the transfer of remuneration

Some travel credit cards allow 1:1 transfers to hotel and airline loyalty programs. The catch is that you may end up converting points or miles to a lower value.

What is the best thing to do in order not to underestimate the value of the reward? Read the fine print, says Natasha-Rachel Smith, personal finance expert at TopCashback.

Know how much value you get up front for your rewards. And pay special attention to any hidden costs.

“If the purpose of transferring rewards is to extend the expiration date or give someone miles, make sure you don’t pay anything out of your own pocket,” Smith says.

3. Allow miles or points to expire

Some travel credit cards have “use it or lose it” reward programs. If you don’t put your rewards to work, you are essentially throwing money away.

According to Robin Sachs Frankel, author of credit cards and personal finance, you need to know the reward expiration rules inside and out.

Smith suggests trying to extend your rewards by making a small trade or purchase to keep them active. “Earning just one point can be enough to keep your rewards balance safe,” she says.

Easy hack: “Set up calendar alerts so you don’t lose your hard-earned rewards,” says Frankel.

4. Buying points or miles when not needed

Some cards allow you to buy miles or points to get to your next redemption faster. For example, with an Alaska Airlines Visa Signature® credit card, you can purchase discounted miles with the Alaska Air Miles Plan.

According to Duren, buying points or miles rarely benefits you, even if they are on sale.

The exception would be if you are a few hundred points away from being able to book a flight or hotel stay with points and need a little extra push to get there.

Remember that paying more out of pocket for miles than if you were earning them by spending them on purchases doesn’t make good financial sense.

“Rule of thumb when earning miles and points: if it’s not free or cheap, it’s not worth it,” says Smith.

Professional advice: Look for frequent flyer mileage or points offers, such as bonus rewards when you purchase miles directly with an airline.

5. Lack of partnerships with your favorite hotels or airlines

According to Duren, choosing a card that doesn’t partner with the brands you prefer will result in forfeiting rewards early on.

And that includes not understanding where the brand has the most value for flights or hotels, and not knowing the rules and limits on redemptions.

“My wife and I are Hyatt supporters, so we know the ins and outs of upgrades, tier benefits, and Chase points conversions,” Düren says. “If we switched to Marriott, we would have no idea what we were doing.”

You should be especially careful when choosing a card issued in conjunction with a particular airline. An airline may offer generous rewards when booking flights, but if it has limited flight routes, these rewards may not get you very far. You must know how the card is suitable for your particular situation.

6. Paying for benefits you don’t get

Free checked baggage and companion tickets are nice incentives for getting a travel credit card. The problem is that these freebies are not completely free if the card has a high annual fee.

The balance between the cost of extra travel and what you pay for the annual fee comes down to how often you travel.

“If you’re a regular business flyer, a free TSA pre-check is a great benefit,” Düren says. If you fly only once or twice a year? Not so much.

Cards that offer credit statements for TSA Precheck or Global Entry fees also typically offer other top-tier benefits, such as free lounge access and annual credit statements for travel-related incidentals. Not surprisingly, they are also the cards with some of the highest annual fees.

For example, if you apply for and are approved for an American Express Platinum Card® or Chase Sapphire Reserve Card, you will pay an annual fee of $695 or $550, respectively.

Not sure if it’s reasonable for your budget? “Before you decide to pay a hefty annual fee, take a close look at your lifestyle to decide if the benefits are worth it,” Smith suggests.

7. Charging fees for foreign transactions

Transaction fees abroad can be the bane of the international traveller. Cards that charge this fee include a 1 to 3 percent surcharge on anything you buy outside of the US, as well as online purchases made on websites abroad.

This is wasted money. “Any good travel card will waive foreign transaction fees,” says Frankel.

The Capital One VentureOne Rewards Credit Card is a no-fee option for a single international transaction; the Chase Sapphire Preferred card is another one.

8. Choosing the wrong booking option

Book through an airline or through your card’s travel portal? This is a difficult question and you cannot afford to be wrong.

Booking directly with an airline can be easier than using your card’s travel portal as an intermediary. In addition, it can offer better flight options with fewer restrictions.

On the other hand, if your card offers a bonus when booking through the portal, booking with the airline will mean forfeiting those extra miles or points.

Düren advises weighing prices carefully before booking through your card’s travel portal. If the prices for flights or rooms through the portal are higher than when booking directly with an airline or hotel, this reduces the value you get from earning rewards.

9. Forget about reward categories

Some travel credit cards make life easier by allowing you to earn a fixed rate for everything you spend. Others mix things up with different reward categories.

The American Express® Gold Card is a great example. It offers 3x more points on flights booked directly with airlines or on AmexTravel.com, and 4x more points at U.S. restaurants and supermarkets (at spends up to $25,000 per calendar year, then 1 point per dollar) and restaurants. Other purchases earn 1 point per dollar.

Sounds simple enough, but can you go wrong if you book flights through travel sites like Kayak or Orbitz? Flight is flight, right?

Not really. In this case, you will only earn 1 point for every dollar you book, instead of 3 points.

Professional advice: If you’re struggling to keep track of where you can earn the most rewards, stick with a travel card that pays out the same generous reward rate on everything you spend, such as the Capital One Venture Rewards credit card.

10. Overspending on signup bonus

Claiming a big welcome bonus for signing up with a new travel credit card is like hitting the jackpot, but chasing those bonuses can be dangerous.

Düren says the introductory bonuses force you to focus on short-term value rather than thinking about the card from a long-term perspective. In doing so, you’re missing out on an important part of the equation: minimum spending requirements.

“If you’re choosing a new card based on a sign-up bonus, ask yourself if meeting the minimum spend requirements is worth it,” Frankel warns.

Be smart and look at things objectively when comparing bonus offers.

If you have to spend $3,000, $4,000, or $5,000 to receive a bonus, how likely is it that you will pay it back in full right away? The more interest you pay because you have a balance, the more value is pumped out of the reward bonus.

Editorial disclaimer

The editorial content on this page is based solely on the objective judgment of our contributors and is not based on advertising. It was not provided or ordered by credit card issuers. However, we may receive compensation when you click on links to our partners’ products.

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