Earning reward points on a travel credit card can feel exciting, like building an extra bonus savings account of extra currency that you can use exclusively for travel. But in addition to earning points and miles, you also need to plan how you’ll actually redeem those points.
Too many people focus only on saving on credit card travel rewards and never cash them out. This is a bad idea. First, credit card travel rewards points don’t earn interest like the best savings accounts. And if you continue to keep those points and miles, you may suffer unexpected damage.
We spoke to affordable luxury travel expert Daniel Desir Corbett about what happens when people hold on to credit card points and frequent flyer miles for too long, and what they should do instead. I heard the story.
How to lose $1,000 in expired airline frequent flyer miles
Mr. Corbett knows firsthand the financial loss that can be caused by not using frequent flyer miles or credit card benefits. “Travel award expiration is a familiar issue to me,” Corbett said. “Overnight, I recently lost 123,000 AAdvantage® miles that I had accumulated for several years. Those miles, which I had planned to use for my delayed honeymoon, expired after 24 months of inactivity. Ta.”
Some airline frequent flyer programs have miles that never expire. Unfortunately for Corbett, American Airlines’ AAdvantage® miles expire after 24 months unless customers take certain steps to keep their accounts current.
“Despite receiving email reminders regarding the status of my account, I mistakenly believed that my miles would remain valid if I booked a flight with American Airlines,” Corbett said. “Unfortunately, my flight departed after its expiration date, so all my miles were lost. To reactivate those 123,000 miles today, I would have to pay the hefty sum of $1,000. ”
Lesson learned: Be sure to understand the fine print and terms of airline frequent flyer programs, hotel loyalty programs, and other travel rewards programs. “Never assume,” Corbett says. “Please call customer service for instructions.”
Below are some questions.
Do credit card points expire? Are there any time limits, deadlines, or blackout dates for redeeming miles or points? What restrictions are there on how I can use my miles or points? Can I redeem unused points or miles? Can I transfer it to a travel partner? Is it a partner airline’s frequent flyer program?
Chase Sapphire: Flexible points redemption and transfer partner
One potential downside to airline frequent flyer programs (and some airline credit cards) is that the points earned on the card can be used primarily for air travel. Instead of concentrating your credit card spending on just one airline, many people are looking for more flexible ways to use their travel rewards credit cards.
Corbett recommends the Chase Sapphire Credit Card, which offers a flexible way to redeem points for things like air travel and hotels. Additionally, your Chase Ultimate Rewards® points will never expire as long as your credit card account remains open.
The Chase Sapphire Preferred® Card has an annual fee of $95, but it offers some valuable benefits, including:
Redemption is 25% higher when you book points through the Chase Travel portal. You can combine your points with other Chase credit cards. Select trip cancellation, baggage and rental car coverage
“Chase’s redemption flexibility accommodates travelers of all redemption skill levels,” Corbett said. “People who want cash back can redeem their points for gift cards or statement credits, have them deposited directly into their checking or savings account, or use Chase Travel to save money on flights, hotels, or rental cars. You can also redeem Chase Ultimate Rewards points directly for your reservations by visiting our portal or transferring them to our airline and hotel partners like Marriott Bonvoy and JetBlue.”
Takeaway: The best travel credit cards give you more flexibility in how you redeem points for travel without being limited to one airline or type of trip. The Chase Sapphire Preferred® Card and premium Chase Sapphire Reserve® give you a multiplier on points redemption for travel. You can also transfer points to airline frequent flyer programs and hotel loyalty programs, making these cards even more versatile, like having multiple airline and hotel credit cards in one.
Wells Fargo autographed cards: Even more valuable
The Chase Sapphire card isn’t the only travel credit card that offers point transfers to travel partners. Wells Fargo also offers this valuable benefit with the new and improved Wells Fargo Autograph℠ Card (see Rates and Fees).
“The ability to transfer Wells Fargo Autograph℠ Card points to six transfer partners makes the Wells Fargo Autograph℠ Card even more valuable,” said Corbett. “You can also pool points with family and friends and redeem them for future rewards, helping you reach your travel goals faster.”
conclusion
Instead of keeping your credit card points and frequent flyer miles, put them to good use by redeeming them for travel. Some airline frequent flyer programs have miles that expire. Credit card points also don’t expire, meaning they don’t accrue interest or “gain” in value over the years.
It’s a good idea to redeem your points early in case your travel price increases or your loyalty program reduces the value of your points. Instead of focusing on accumulating points, plan to redeem your travel credit card points for fun travel memories.
