6 Common Travel Rewards Pitfalls

Using points and miles can drastically improve your vacations, with discounted hotel rooms and high-end flights. But it’s not all champagne in crystal glasses.

No matter how savvy you are, it’s always possible to make mistakes with travel rewards. Let’s take a look at some of the most common travel rewards pitfalls and how to avoid them.

The concept of rewards points is simple in theory: You earn points when flying on a certain airline, staying at a certain hotel or using a travel rewards credit card. You then redeem your points for rewards, such as award flights and hotel stays.

For the most part it’s straightforward, but there’s so much more to uncover in order to make the most of your points, and making mistakes can be easy for the unwary customer.

1. Poor value redemptions

Whether you’re earning airline miles or credit card points, you always have the ability to redeem rewards in various ways. Common redemptions include hotel stays and flights, but it’s also possible to use your points for things like merchandise and gift cards.

The value you’ll receive when redeeming your points for merchandise or gift cards is nearly always going to be lower than when redeeming your points for travel. For example, it’ll cost you 14,286 American Express Membership Rewards for a $100 gift card to Walmart.

At this rate, you’re getting just 0.7 cent of value out of your AmEx points — less than half of NerdWallet’s valuation of up to 1.2 cents each up to 2.8 cents each when transferred to travel partners.

» Learn more: How much are your airline miles and hotel points worth this year?

2. Never redeeming your points

While it’s not a good idea to redeem your points at a poor value, it’s also not a good idea to hoard your points either.

Why? Because there’s always a devaluation around the corner. It can be exciting to watch your points balance grow, but keeping a large stash in your pocket can be a losing proposition.

It doesn’t matter if you're waiting for a hard-to-find award seat or you’re simply loath to spend your points. Holding onto points for long periods of time runs the risk of their becoming less valuable due to devaluations.

Truth be told, the most valuable redemption is the one you’ll actually make. This may mean choosing to fly in a less glamorous premium class than you could with another airline, but if the flight makes sense for your travel plans, redeeming your points is a better option than seeing them devalue.

» Learn more: Don't just redeem miles — redeem them wisely. Here's how

3. Losing your points

There’s nothing worse than going through all the effort to earn points and then realizing they've expired. This can happen with all kinds of points, though there are usually ways to avoid it.

General credit card points, for example, typically don’t expire as long as you continue to hold the card in good standing, but you may have to forfeit points if you close your account.

Airlines such as Delta Air Lines and JetBlue Airways have officially declared that your points will never expire as long as you keep your account with them open. The same can’t be said of American Airlines AAdvantage miles, which expire after 18 months without activity. Points from most hotel chains will also expire without any qualifying activity in a certain period.

While it may be possible to reactivate your lost points, keeping track of expiration dates is key to keeping them alive in the first place. It’s not hard to generate activity for most accounts; this can be as simple as using a co-branded credit card, completing a guest reward survey or transferring points.

» Learn more: The best travel credit cards right now

4. Missing free benefits

Did you know that there are three major hotel chains that will give you free nights on your award stays? Hilton and Marriott offer the fifth consecutive night free when redeeming with points. IHG, meanwhile, gives those who hold the IHG One Rewards Premier Credit Card their fourth night free.

This means, for example, you’ll pay the same amount of points whether you’re staying four or five nights at a Hilton hotel — but it’s entirely possible to miss this type of benefit when looking for a room.

5. Not managing your loyalty

You may not be loyal to one hotel or airline, but perhaps you should be. The travel industry heavily rewards its repeat customers and you could be missing out on big benefits.

Consider Alaska Airlines MileagePlus elite status, which rewards you with additional bonus miles based on your status level. Here’s a business class flight from Los Angeles to Tel Aviv-TLV for $1,638 via American Airlines in March.

Through the American Airlines and Alaska Airlines partnership, Alaska members can earn miles on an American flight based on the distance flown, plus multipliers based on your fare class and elite status.

This ticket is an I fare class (this means you’re booking discounted business class), so you’re going to earn 150% of miles flown. Without elite status, you’ll be pocketing 23,946 Alaska miles for this flight.

Now let’s say you have MVP Gold elite status, which is Alaska’s middle-tier status. MVP Gold grants you an extra 100% bonus on earning miles.

Having MVP Gold status means that you’d instead earn 39,910 Alaska Airlines miles on this same flight. That’s a difference of 15,964 miles!

» Learn more: The best airline and hotel rewards loyalty programs this year

6. Being inflexible — particularly with dates

One of the downsides of award travel is the need to find award availability. It can be difficult to do so, especially if you’re looking at popular flights or dates. However, it pays to be flexible with your search rather than springing for premium bookings.

Here’s a flight on United Airlines from Tahiti to San Francisco in March in business class.

At 70,000 miles, this is an expensive award flight. But, it’s still a pretty good redemption considering this is the cost for that same route a day later.

As you can see, it’s more than double the price to book this ticket. Being flexible with your dates can help you save big.

If you want to use your travel rewards

There’s no doubt that travel rewards can amp up your vacation. At the same time, what appears to be a simple concept in theory can have plenty of pitfalls if you’re not careful. Avoid these six mistakes to make sure you maximize your travel savings and benefits.