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Travel credit cards can be quite lucrative — from earning deeply discounted first-class flights to receiving complimentary hotel elite status, the perks these cards offer can significantly improve your travel life.
But it’s not all high-end award redemptions and free checked baggage; every travel credit card comes with its own set of points, redemption values, rules and fine print. Understanding these is key, but even the most experienced among us get it wrong sometimes. Whether you’re a travel card veteran or a total newbie, let’s take a look at the 10 worst travel credit card mistakes.
1. Spending too much
Many different travel credit cards come with a welcome offer, which usually means you’ll get a lump sum of bonus points after meeting a certain spending threshold. While this can be a good way to earn a lot of points at once, not having a plan for how to meet that spending requirement can be a big mistake.
Buying things just to meet your spending goal can land you in trouble, as can having additional expenses that weren’t already in your budget. Before you sign up for a card — and even after — make sure that your purchases make sense. It’s never a good idea to buy something you can’t afford, even if it helps you meet the welcome offer requirements. If you aren’t careful, pricey interest rates on travel credit cards can end up costing you more than you’ll gain.
» Learn more: The best travel credit card welcome bonuses right now
2. Not spending enough
While it’s important to be smart with your spending and expenses, it’s also important to remember to spend enough. Travel credit card welcome offers usually come with a time limit — for example, with the Capital One Venture Rewards Credit Card: Enjoy a one-time bonus of 75,000 miles once you spend $4,000 on purchases within 3 months from account opening, equal to $750 in travel.
Failing to meet the spending requirement within the set time frame would disqualify you from earning the bonus, which can be a big hit to your award travel dreams.
Credit card annual fees don’t count towards the minimum spend for the welcome offer, so take this into account when reviewing your spending.
3. Losing your points
If you’ve decided you don’t want your credit card anymore, it may be tempting to just call up your card issuer and ask to cancel. However, you’ll want to learn your card's point policy before you do so; some banks will force you to forfeit your points if you don’t have an active credit card on file.
4. Redeeming points at low value
Different credit cards offer varying ways to redeem points, but not all of these redemptions are equal. American Express Membership Rewards, for example, are worth as little as 0.5 cent each when redeemed for a gift card. But NerdWallet values AmEx points at 2.8 cents each when factoring in its higher redemption offers, including transfer partners. That’s quadruple the point value you’d receive from a gift card redemption. Typically, gift cards or credit card statements are a poor option for using travel points if you’re trying to maximize their value.
5. Not transferring points
Card issuers such as American Express, Chase, Citi and Capital One offer travel credit cards that earn flexible points currencies. These currencies allow you to transfer your points to multiple airline and hotel partners for award redemptions.
You’ll often find that transferring your points will result in a greater value for your rewards points and is a better option than booking through your bank’s own travel portal.
6. Spending points versus paying a low cash price
It’s tempting to redeem your points for every travel expense — after all, isn’t that why you earned them? But before you book you should always check the cash price first.
Some hotel and airline programs will charge a specific number of points for an award redemption, no matter how much you’d otherwise pay in cash. This means, for example, that a low-cost flight to Europe may cost $400 roundtrip, but the corresponding award flight may still cost $600 worth of points. Save your points for when cash rates are high in order to redeem them for the best value.
7. Not using your benefits
Travel credit cards don’t just earn rewards points. Most offer additional benefits, which range from annual travel credits to free hotel nights. These benefits typically have to be used within a year’s time and don’t roll over if unused, which means you’ll need to stay on top of all your card’s benefits each year.
World of Hyatt Credit Card, for example, offers an annual free night certificate valid at any Category 1-4 hotel. When used, this certificate can save you hundreds of dollars on a night at a property. If you don’t redeem it before its expiration date, however, you’ll lose that free night.
8. Misunderstanding bonus categories
One of the best perks of travel credit cards is the ability to earn bonus points on what you buy. Each credit card has its own set of bonus categories, which will reward additional points on specific purchases. It’s important to read the rules on these categories carefully, however, in order to ensure that you’ll get the extra points.
A great example of this is The Platinum Card® from American Express, which will give you 5 AmEx points per dollar spent on airfare booked directly with the airline or via the AmEx travel portal. This means that flights booked via other methods, such as through online travel agencies, won’t qualify for the additional bonus points. Terms apply.
» Learn more: A guide to travel credit cards for beginners
9. Picking the wrong cards
Where do you travel? What kind of hotels do you prefer? Do you only purchase discount flights, or are you willing to splurge on full-fare tickets? Understanding your own travel habits should come well before selecting a travel credit card. After all, what’s the use of a United Airlines credit card if you only fly on American?
10. Not using your travel credit card
When it comes to travel credit cards, perhaps the worst mistake of all is failing to use them. This isn’t just because you’ll miss out on earning points; credit cards come with consumer protections that cash and debit cards don’t. Some travel cards will even include additional benefits, such as rental car insurance or trip delay insurance, when you pay with your card.
» Learn more: Why nearly every purchase should be on a credit card
When used correctly, travel credit cards can offer you great value and improve your travel experience. However, even experienced travelers blunder like letting a free night certificate expire or misunderstanding bonus categories. Be sure to investigate your options thoroughly before getting a travel card so you can avoid these mistakes.
How to maximize your rewards
You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2023, including those best for:
Flexibility, point transfers and a large bonus: Chase Sapphire Preferred® Card
No annual fee: Bank of America® Travel Rewards credit card
Flat-rate travel rewards: Capital One Venture Rewards Credit Card
Bonus travel rewards and high-end perks: Chase Sapphire Reserve®
Luxury perks: The Platinum Card® from American Express
Business travelers: Ink Business Preferred® Credit Card