Getting started with points and miles is not easy. There’s a lot to learn about credit cards, bank rules, earning points, as well as the biggest challenge, learning how to redeem your points and miles for the best value.
Given all of this, you’re bound to make mistakes along the way. I sure did. I still cringe when I think of how many American Express points my husband and I wasted as we redeemed flights for our honeymoon to Italy.
But all of us have to live and learn. You can only do the best you can with the knowledge you’ve got at the time. That’s the reason I’ve put together this guide…to help you (hopefully) avoid some of the most common points and miles beginner mistakes.
15 Mistakes You Don’t Want to Make as a Points and Miles Beginner
The following list of mistakes is based on my own personal experiences, as well as from the reader discussions in my Facebook group, Travel Hacking Study Hall. If you’re not a member yet, request to join so we can chat more in the group. 🙂
For now, let’s dive into this list of points and miles mistakes. The quicker you learn them, the better off you’ll be!
Mistake #1: Not knowing about the Chase 5/24 rule.
Some will argue this rule is less relevant than it once was, particularly for anyone who’s more established in the points and miles hobby. But, beginners must understand this rule from the start.
Chase’s 5/24 rule states that Chase will deny you for any of their credit cards if you have 5 or more new credit cards from any bank in the last 24 months, regardless of how amazing your credit score is. This includes credit cards from individual stores like Target or Victoria Secret.
There are some nuances to the rule when it comes to business cards. So make sure you understand that Chase business cards are subject to the 5/24 rule but won’t add to your overall 5/24 count. Business cards from banks like American Express and Citibank also won’t add to your 5/24 count.
If you’re just starting out with points and miles you might be wondering why you should care about Chase travel rewards credit cards. After all, other banks offer cards that earn points and miles.
First, Chase Ultimate Rewards cards like the Sapphire Preferred, the Ink Preferred or a Freedom earn Ultimate Rewards points which can be redeemed for flights and hotels within the Chase Travel Portal or by transferring to their airline and hotel partners. For beginners especially, Ultimate Rewards points are great because they’re valuable and one of the easiest point currencies to learn.
Second, Chase’s line-up of co-branded airline and hotel credit cards are also really valuable. These cards include brands like Southwest, United, Hyatt, Marriott, and IHG.
The bottom line is to make sure you understand the first 5 cards to consider as a beginner.
Mistake #2: Thinking all points and miles are equal.
Flexible points, airline miles, hotel points, and cashback rewards all have different values. 1 United mile is not the same as 1 Hilton point. And, even within these broad categories, there’s a difference. For example, 1000 Hyatt points are much more valuable than 1000 IHG points.
This also means credit cards that offer bonus categories like 2x, 3x, 4x the points or miles aren’t always more valuable than another card that offers the same or less than this.
For example, the IHG Premier card offers 2x the IHG points on restaurant spending. The Sapphire Preferred offers 2x the Ultimate Rewards points at restaurants, as well. However, 2 Ultimate Rewards points are much more valuable than 2 IHG points no matter what type of traveler you are.
Your travel goals and style will determine which points and miles are right for your goals. Travelers looking to score cheap flight deals could do really well with cashback reward points. If you don’t have a lot of flexibility in when you travel, you’ll be much better served with flexible points versus specific airline miles.
The bottom line is to understand what miles and points are and how each one can bring value to different parts of your travel goals.
Mistake #3: Avoiding credit cards with annual fees.
I get it. In a perfect world, there would be no annual credit card fees. Unfortunately, that’s not where we live.
You certainly want to assess whether a fee is worth it or not. (More on this in a second.) But, avoiding credit cards with annual fees is the same as shooting yourself in the foot in the points and miles world.
Credit card fees are justified when you get outsized value from the perks and benefits offered by the card. Some of the easiest examples to see this in action is with co-branded hotel credit cards. Many offer a free night when you renew your card. For example, the World of Hyatt card comes with a $95 annual fee but also earns a free night in a category 1-4 hotel each year. The value of this free night can be more than double what was paid in the annual fee.
Even with premium cards like the Chase Sapphire Reserve, the $300 travel credit each year immediately cuts the annual fee on the card by more than half. This is before you use an airport lounge or get a 50% bonus on the points you redeem in the Chase travel portal.
The bottom line is to look at the bonus, perks, and benefits of a card and work to offset the fee by taking advantage of what the card offers. Otherwise, you’ll be missing out on a lot of travel rewards opportunities!
Mistake #4: Closing credit cards without a strategy.
This is related to the previous mistake but deserves a spot all its own. Canceling credit cards is part of a solid financial strategy. Sometimes credit cards no longer return the value they once did. Or perhaps you’ve hit the limit of cards a bank will give you and you need to close one in order to eventually open another.
But, it’s important to understand a couple of things because when you close cards it temporarily costs you a few points on your credit score.
First, no-fee credit cards should be kept open forever even if you’re no longer using them. They add to the age of your overall credit which helps your credit score. Similarly, if there’s a credit card you’ve had open for a long time, think twice before canceling your card.
The bottom line is you must have a strategy before you cancel a credit card. There are steps to go through including considering a product change, downgrading, or even possibly getting a retention offer that could affect your decision.
Mistake #5: Using points and miles for merchandise or gift cards.
With the exception of cashing out fixed-value 1 cent per point cashback rewards, it’s never a good idea to redeem flexible points, airline miles or hotel points for anything other than flights and hotels. Even at the minimum, the redemption return value is always higher.
With the Chase Sapphire Reserve, you’re getting at least 1.5 cents per point in the Chase Travel Portal and much more when you transfer points to their airline and hotel partners for award flights and hotel nights.
The bottom line is you shouldn’t use your valuable travel rewards points for merchandise or gift cards unless you want to give away at least half of their value.
Mistake #6: Not having clear goals.
As a beginner, you want to focus on your first redemption, while still keeping the Chase 5/24 rule in mind. You don’t want to waste your time on welcome bonuses that don’t align with your travel goals.
Keep everything small and manageable in the beginning. As you learn more, you’ll want to diversify. Flexible points currencies can be transferred to a variety of partners for a wide range of destinations and trips.
But if you’re a domestic traveler only, earning points with Southwest might be more valuable for you than someone who takes international trips. If you live near a small airport that has no JetBlue flights, it might not make sense to get the JetBlue card even if it has a great bonus offer.
The bottom line is to keep your goals in mind as you get started. Don’t compare yourself with others or be swayed by flashy credit card bonuses if they’re not right for you.
Mistake #7: Not using your credit card for all daily expenses.
When you pay with cash or direct debit from your bank account, you earn no rewards for your spending. Earning points and miles is not about spending more. It’s about spending smarter. (My husband has to nearly put a hand over my mouth when I see someone paying in cash at the grocery store or a restaurant!)
You should use your travel rewards credit cards for all your bills and daily expenses that can be paid with a credit card. Everything includes your morning coffee, your Netflix subscription, and your household goods purchases. All of these are opportunities to earn rewards for the spending you’d be doing anyway.
Take advantage of credit card bonus categories that offer 5x on gas or 4x on grocery spending to maximize your earnings. Use shopping portals. Add a card to your wallet that earns more than 1x on non-bonus category spending, like the Ink Unlimited with its 1.5 Ultimate Rewards points earned for every dollar spent or the Blue Business Plus card that earns 2x the Membership Rewards points on all purchases up to $50k each year.
And if you’re spending smarter by only making purchases and paying bills you would have paid anyway, it’ll be easy to pay your credit card bill in full at the end of the month so you don’t chip away at the value of the travel rewards earned with high-interest fees.
The bottom line is your everyday spending can help you earn free travel. Use it to its fullest potential.
Mistake #8: Missing the welcome bonus on a new card.
Of course, there are long-term benefits to travel rewards credit cards. But the welcome offer is what gives your loyalty account that initial boost.
Beginners who make this mistake usually think they’ve spent enough but didn’t realize a couple of important things.
First, the clock starts when the account opens, not when the card arrives or when it’s activated. If you have 3 months to meet the minimum spend, the timer starts the day you’re approved for the new card.
Second, the annual fee doesn’t count towards the minimum spending requirement. Some credit cards waive the annual fee the first year so this isn’t a factor. But if not, be sure to exclude the annual fee from what you’ve spent to make sure you calculate correctly.
The bottom line is you should always track your spending, understand the above terms, and give yourself some comfortable breathing room to ensure you meet the minimum spending and hit the bonus without breaking a sweat.
Mistake #9: Not taking advantage of big purchases.
Aside from regular bills and everyday spending, we all face large expenses from time-to-time whether we need new kitchen appliances or have to pay a big tuition or tax bill.
These expenses can be used to easily meet (multiple) minimum spends if planned accordingly. Target these costs with a new credit card to get a far better return on your investment. Remember, these are things you’d be paying for regardless so why not harness that spending to earn free flights.
And, if it’s a big purchase that can’t be paid with a credit card, look to use a service like Plastiq to meet the minimum spend.
The bottom line is large purchases don’t come up all the time. When they do, plan ahead so you can maximize that spending.
Mistake #10: Getting too many new credit cards in a short period of time.
As a beginner, you want to take it slowly. Focus on starting with a couple of cards. Respect the fact that you’re a beginner and need some time to understand how to manage any new cards. Also, remember you have to be able to meet the minimum spend. It does you no good to sign up for a bunch of credit cards and miss earning the welcome bonus.
Keep in mind, also, banks take note of a lot of applications in a short period of time. Respect the bank rules. It’s better to fly under the radar rather than attract unwanted attention from a bank. I’d much rather avoid a phone call with a bank and just get auto-approved, wouldn’t you? 🙂
The bottom line is to pace yourself with new applications. This doesn’t mean you can’t be opportunistic and grab a great offer but, as a beginner, it’s best to remember that slow and steady is the recipe for success.
Mistake #11: Letting points and miles expire.
Some airline and hotel loyalty programs don’t have expiration dates, but some do, like American Airlines or IHG. If you have that program’s co-branded credit card, your points won’t expire. The same goes for flexible points with Chase, American Express, Citibank, and Capital One. If you have a card open with them, your points won’t expire.
And luckily, many programs also have ways to reset the clock to save your points or miles. Making a small purchase in the airline or hotel’s shopping portal, earning dining rewards, or even transferring flexible points or making a redemption can work.
For those programs, that don’t offer any way to reset the clock on expiring points or miles, it’s best to get some value instead of losing them altogether. Consider booking a flight. Check to see if there are any other travel partners where you can transfer them. If all else fails, see if you can cash them out or redeem for a gift card to avoid a total loss.
The bottom line is don’t let your hard-earned points and miles expire! It’s always best to earn and burn your travel rewards quickly for the best value. But, it’s also smart to use a tool like AwardWallet to send an alert when an expiration date gets close.
Mistake #12: Not joining loyalty programs from the start.
Anyone getting started with points and miles will inevitably have a lot to learn about how to maximize the power of airline alliances for smarter redemptions. Because of this, it may not be clear why signing up for loyalty programs like Iberia or British Airways from the start is important, even for those travelers who only want to travel domestically.
Some loyalty programs have rules about how long an account must be open before you get all the advantages of being a member. For example, British Airways and Iberia Avios can be transferred and combined between accounts but only if your Iberia account has been open for at least 90 days.
The bottom line is you should look at the transfer partners for the flexible points you’re earning and start by joining those loyalty programs. They’re free to join and as you learn more, you’ll understand more about how to use partner redemptions to your advantage.
Mistake #13: Thinking the time and effort is not worth it.
Skeptics and even beginners often doubt whether or not earning and learning to use points and miles is worth the time and effort. In some ways, it’s understandable. They haven’t seen the proof that comes with knowing you booked a hotel entirely on points or booked an award flight and only paid $11.20 in taxes.
But it’s also easy to get discouraged if you’re searching for award availability and finding nothing. This is when it’s easiest to default to a “points and miles aren’t worth it” mantra.
This is because the redeeming part is a challenge that’s only overcome with learning, practice, and an open mind. Before you get to the point of booking an award flight, spend time learning about what different airline programs can do for you. Each has its own rules and mileage costs. Then, do some practice searches to familiarize yourself with the booking steps.
And, yes, if necessary, get creative. Can you be flexible on your dates, airports, and even destination? Even as a teacher with a rigid school schedule, I always found an award flight to book for my vacations. I didn’t have date flexibility but I switched destinations and even used different airports to create the opportunity to places like Budapest, Thailand, Finnish Lapland, Patagonia, Botswana…you get the picture.
The bottom line is don’t write off points and miles as not being worth it. Invest some time to learn and practice and the rewards returned will silence any last doubts.
Mistake #14: Transferring flexible points too soon.
Flexible points like those earned with Chase, American Express, Citibank, and Capital One come with the ability to transfer them to a variety of airline and hotel partners. This creates awesome redemption opportunities.
However, never transfer your flexible points until you’ve searched for and confirmed the award space you need is there. Most point transfers happen (almost) instantly so it’s easy to transfer just before you’re ready to book.
Once you transfer those points to an airline or hotel program, you can’ transfer those points back. Not to mention, it’s better to keep flexible points with the bank versus the airline or hotel program. This protects you somewhat from devaluations.
If one American Express transfer partner devalues, I can just use another partner. If I’ve transferred points to that partner just to sit them in that account, those points have just devalued as well.
The bottom line is to always search for award space first and then transfer just what you need to complete the award booking.
Mistake #15: Analysis Paralysis
This condition actually runs in my family genes so I know how easy it is to succumb…especially with all of the possibilities that come with points and miles. In the beginning, it’s downright overwhelming to know which miles to use, in which program, for the best value.
And while you’re playing with options, the award availability is disappearing before your eyes.
Of course, you want to learn and try to maximize your points as best as possible. But remember, very few people look back and say their first redemption was their best. You book the trip with the best knowledge you have at the time.
You don’t want to lose the chance to take a trip because you were debating back and forth, especially if you’re counting on that redemption to save out-of-pocket cash costs or don’t have date flexibility.
No one books a trip to Rome and while strolling with their gelato says, “OMG, this trip stinks because I spent 10k more miles than I should have.”
The bottom line is to do your research but don’t get stuck analyzing forever. Book.That.Award.
What points and miles mistake would you add to this list?
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