Wasted Credit Card Points Nine Ways Americans Waste Their Credit Card Points
You work hard to earn your rewards points. They’re yours, and the last thing you want is wasted credit card points each year. However, this happens far more frequently than you know to thousands of people each year. You may even be wasting credit card points without knowing you’re doing it! If you’re worried about wasted credit card points, our list will help you avoid the most common ones.
9 Ways to Avoid Wasted Credit Card Points
1. Assuming Conversion Ratios are the Same
You convert your rewards points into dollars, and you can redeem them at various stores. However, wasted credit card points occur when cardholders assume every store has the same conversion ratio. This isn’t true and assuming can make you pay more for the same gift card at different locations. For example, one store may take 2,500 points to make a $25 gift card. Another store could take 3,500 points for the same $25 gift card. If you didn’t shop around you’d be wasting credit card reward points.
2. You Overpay for Your Points or Miles
Your credit card may give you points you can convert into miles. If they do, you have to make sure you’re getting the best deal. For example, people with the American Express card could have 100,000 points. They can redeem these points for cash or miles for free travel. Many people would be tempted to take the cash because it looks like a better deal. These 100,000 points convert into around $1,000 in cash you can put toward a flight. But, if you redeem them for in a frequent flyer program, you could get up to 100,000 miles. This equals out to a $5,000 first class ticket.
3. You Don’t Qualify for the Sign-Up Bonus
Earning rewards points can be hard, and it can take a while to amass a decent amount. Many credit cards offer a signup bonus and not qualifying for it counts as wasted credit card points. Typically, you’ll spend x amount in three months to get the point bonus. This can range from the low hundreds to thousands. Don’t buy additional things to hit the signup bonus, but use your card for everyday purchases instead.
4. You Use Your Points on Merchandise
Merchandise usually has a low point-to-value ratio. This means that you’ll spend a lot of points for a little reward. If you don’t care about wasting credit card points, this isn’t a big deal. You’ll get your item with your points. But if you do care, you’ll want to look at other options. Things like airline miles, travel discount opportunities, or gift cards are good ideas. You generally get more points per value with these types of redemption choices.
5. Your Card Doesn’t Suit Your Lifestyle
If you use your credit card for travel, make sure it matches up with your needs. Say you have an airline credit card and you’re getting a lot of points. These points are only good if they’ll get you where you want to go. Say you travel to Europe a lot on one airline. However, the airline you’re earning points from doesn’t offer a lot of Europe flights. This adds up to wasted credit card points because you’re missing opportunities with other airlines.
6. You Make Routine Late Payments
If you make several late payments, you could miss out on rewards points. Today, many reward credit cards withhold points for late payments. While missing a payment once in a while isn’t terrible, consistent late payments can hurt. You won’t be able to get the most out of your rewards card point system. The cardholder may also add late fees or raise your APR in response to your late payments. So you stand to lose a lot of money for simple mistakes.
7. Your Rewards Expire
Many credit card companies offer unlimited rewards that never expire like with the Discover it® Card. Other credit card companies have yearly, or every 36-month expiration dates on their rewards. Wasted credit card points occur when you don’t pay attention to expiration dates. If you were saving up for a large purchase, but your credit card rewards expire, you’ll lose all of them. It’s best to double check your terms and conditions and find out exactly when your rewards expire. This way, you can cash them out how you see fit before you lose them. For example, the Citi® Double Cash Credit Card but the cash rewards expire if not used.
8. You Don’t Take Advantage of Higher Point Categories
Your credit card may offer higher rewards options in rotating categories. If you don’t take advantage of them, you’re wasting credit card points. You could get two or three times the normal cash back rewards for things like grocery stores or gas purchases. So use the best gas card you have to make all your gas purchases. Failing to make your card work for you is a trap a lot of cardholders fall in. So check which categories have higher reward rates and use your card there.
9. You Don’t Understand Your Reward Points
People get frustrated when something isn’t straightforward. Redeeming your credit card points can be complicated at first. This can lead people to ignore their rewards and wasted credit card points. If it’s possible, set your rewards up as a statement credit. You can even set an amount, and it’ll automatically redeem when it hits this amount. You won’t have to think about it, and it’s not too complicated to do.
Bottom Line on Wasted Credit Card Points
These nine things can easily lead to wasted credit card points. As a rewards card holder, you want to get the most out of your card. To ensure you do, check that you’re not falling victim to these easy mistakes. You’ll be able to maximize your rewards and make your credit card work for you.
CreditFast has reviewed the best reward credit cards on the market. Some of the credit card offers are from our advertising partners. CreditFast has objectively reviewed the features and benefits of each reward credit card. We have chosen credit card offers based on our editor’s recommendations.