Getting started in the world of credit card points, airline miles, and loyalty programs can be incredibly overwhelming and confusing. Between trying to understand airline partnerships, point transfer options, program rules, and redemption strategies, it’s very easy for beginners to make costly mistakes right out of the gate.
Avoiding these common errors and pitfalls is crucial to get up to speed quickly and start maximizing the value of your points and miles for free travel as soon as possible. Read on to learn the top 9 mistakes beginners often make when earning and redeeming loyalty currencies – and how to avoid them.
Mistake #1: Believing All Points and Miles Programs Offer Equal Value
One of the biggest and most foundational mistakes beginners make is assuming that all points and all miles programs are created equal. It’s easy to fall into the trap of thinking that earning any type of points or miles is valuable no matter what. Just like one U.S. dollar is not equal to one British pound, one Chase point is not equal to one American Express point or one American AAdvantage mile. Each currency has its unique value, and understanding this is crucial.
Unfortunately, the reality is much more nuanced. Not all loyalty currencies and programs are made the same. The earning rates, redemption values, transfer partners, and overall utility can vary widely across the rewards landscape. Taking the time to understand point valuations and program differences is crucial right from the start.
Simply earning generic “points” or “miles” without digging into redemption values and transfer utility is one of the quickest ways to leave tons of free travel and long-term value on the table. Always take the time to properly evaluate if a loyalty currency aligns with your travel goals and redemption plans before aggressively pursuing sign-up bonuses or spending.
For example, Chase Ultimate Rewards points are widely considered one of the most valuable and flexible loyalty currencies available. When redeemed through Chase’s airline and hotel partners for premium cabin award flights and top hotel stays, Ultimate Rewards can frequently get upwards of 2 cents (and sometimes more) per point in value.
Meanwhile, a mileage currency like Delta SkyMiles tends to be worth around 1 cent apiece when redeemed for main cabin Delta flights. The differences between these two currencies and their typical valuations are massive – redeeming 100,000 Ultimate Rewards points could be worth $2,000 or more, while 100,000 SkyMiles would top out around $1,000 in value. And that’s not even accounting for Delta miles typically having less airline partner award options too.
This is just one example, but the larger point remains – failing to research point and mileage valuations upfront could lead a beginner down the wrong earning path right from the start. Having a solid understanding of which programs offer outsized value is step one before getting too deep. Don’t assume all points are made equal without doing your homework first.
Mistake #2: Not Understanding or Utilizing Airline Partnerships
A close second behind improper point valuation is not taking the time to understand how airline partnerships work and how they can help maximize your award travel opportunities – especially when you’re just starting out and have limited points and miles balances to work with.
One of the most powerful aspects of loyalty programs like Chase Ultimate Rewards and American Express Membership Rewards is that they allow you to transfer points to a wide array of travel partners. This includes multiple major airlines across the major global alliances like Star Alliance, SkyTeam, and Oneworld.
For example, Chase Ultimate Rewards can be transferred to United Airlines in Star Alliance, or British Airways in Oneworld, among other options. This capability to transfer points opens up far more award flight routing and redemption options compared to if you just redeemed your points in one isolated program.
Having access to full alliance networks gives you the power to book award flights marketed and operated by any partner airline in that alliance. If you see award space available on any Star Alliance flight, you can transfer Chase points to United and book it. This massively increases award routing possibilities.
Partners also frequently allow for stopovers or open jaws on one-way awards, give access to more business and first class award space, and can help get around issues like phantom availability or poor online reward search tools. But you only unlock these benefits by taking time to learn transfer options.
Simply looking at the airline’s own redemption rates and award chart tells just a fraction of the full story. Knowing your points transfer partners before making any redemptions or transfers is a key step. Don’t leave value on the table by failing to leverage partnerships from the beginning.
Mistake #3: Prematurely Transferring Points Without Confirming Award Availability
A very common mistake that even experienced collectors make is getting ahead of themselves and transferring flexible points to airline partners before properly confirming that the award flights they want are actually bookable. It’s tempting to want to speculate, but this is a costly rookie error all too easy to fall into.
Here’s an example of how this plays out: you have a bucket list dream trip planned to Bora Bora. You’ve heard flights on Air Tahiti Nui are practically impossible to find with miles. One day you notice American Express Membership Rewards transfers to Air Tahiti Nui as a partner. So you decide to transfer a big chunk of points over without checking award space, thinking you’ll just book whatever you can find later.
But then when you call Air Tahiti Nui after your points are transferred, you find out there is no award availability on your dates at all. And transfers between programs are often irreversible, so your points are now stuck. This is crushing after you transferred speculatively based on incorrect assumptions.
The proper steps are to always search award availability first using the multi-partner award search tools mentioned above, verifying that the exact flights and award seats you want are actually currently bookable with miles. This search can pinpoint partner flights across alliance airlines all in one place.
Only once the award space you want is confirmed should you then transfer points from your credit card or flexible currency program. Never transfer miles or points prior to verification – award travel is always subject to availability, and you don’t want your points trapped in a program without good redemption options. Patience pays off.
Mistake #4: Lacking Proper Organization of Points, Miles, and Loyalty Accounts
Staying organized is essential in the world of points and miles. Tracking your credit score, card application dates, bank account log-ins, payment due dates, minimum spending requirements, annual bonuses, annual fees, and the loyalty currencies you hold can be overwhelming. Failing to stay organized could lead to missed points and miles or financial penalties.
That’s why it’s crucial to have an organized tracking system in place from the very start. This can be as simple as a spreadsheet, notebook, journal, or app that helps you:
- Record what travel reward credit cards you’ve opened and when (to track bonus eligibility).
- Note ongoing miles, points, and elite-qualifying metrics earned across the various programs.
- Set reminders for expiration timeframes so your points don’t disappear.
- Maintain an up-to-date list of airline and hotel transfer partners for each points currency.
- Save logins and key program details so they’re not forgotten.
Mistake #5: Obsessing Over Airline Elite Status
A very easy trap for newcomers to fall into is becoming obsessed with wanting mid-tier or top-level airline elite status because of the special perks like priority boarding, confirmed upgrades, and lounge access. Airline elite status absolutely offers some fantastic benefits. But beginners often ruin their goals and overspend trying to aggressively qualify for status through flying or credit card bonuses alone.
The key is to always carefully evaluate whether pursuing status makes sense based on your individual travel patterns and budget. How often do you really fly a particular airline? Is status worthwhile if you mostly fly economy class? Do you travel heavily for work or leisure? How much would qualifying through flights cost?
For most beginners with point and mile goals, relentlessly chasing status often does not make sense, especially if done at the expense of earning lucrative signup bonuses and valuable flexible points. A few extra elite-qualifying miles or minor status perks are rarely worth choosing a loyalty program solely for status over one that offers more redemption value.
You never want to sacrifice the chance to earn potentially hundreds of thousands of miles and points from credit card bonuses just to get some mid-tier status perks. Make sure you do the math of exactly what status will cost and if the benefits truly warrant that investment for your situation. Obsess over value, not status.
Mistake #6: Fearing Annual Fees on Premium Travel Rewards Credit Cards
Now this is a big one, and not just the annual fees. One thing that often deters newcomers is high annual fees on many of the top tier, most rewarding travel rewards credit cards. Top cards often carry fees in the $95 – $695 range. Understandably beginners are hesitant to fork over that much yearly for a card. I often hear, “why should I pay for an annual fee for a credit card?”
Why? Because the points, perks, credits, and signup bonuses that come with premium travel cards frequently offset the annual fee – sometimes multiple times over. The return on spending and bonuses alone often more than eclipses the upfront fee cost.
Here are a few credit card examples:
- Chase Sapphire Reserve®: $550 annual fee but offers a 50,000-point signup bonus worth around $750. Also comes with up to $300 in annual travel credits, airport lounge access, and earns 3x on travel and dining spending.
- American Express® Gold Card: $250 annual fee but offers up to 60,000 points as a bonus when you apply. The American Express Gold Card provides up to $120 in Uber Cash annually, up to $120 in dining credits at select merchants, and 4x points on dining and groceries.
Always crunch the numbers of short and long-term returns versus fee costs. Many premium travel cards can quickly pay for themselves. Fear of fees alone can make you miss out on huge bonuses over time.
Mistake #7: Spending Flexible Points on Cash Back, Gift Cards, or Merchandise
Many bank loyalty programs like Chase Ultimate Rewards and American Express Membership Rewards offer the option to redeem points for cash back, gift cards, merchandise, and more. This level of flexibility seems like an advantage as a beginner. But more often than not, redeeming points for these items is short-sighted.
Loyalty currencies that have the option to transfer to multiple travel partners will basically always get better per point value when redeemed for high-end award travel. But cash back and gift cards often only rebate at a flat 1 cent per point — a poor return for valuable currencies.
For example, you could redeem 100,000 Chase points for $1,000 as cash back at that rate. Not awful, but not great. Or those 100,000 Chase points could become $2,000+ in business class flights to Europe when transferred to United Airlines and booked strategically. That’s double the value over cash back. And who wouldn’t love a business class flight to Europe?
This is why it almost always makes sense to avoid the temptation of quick and easy non-travel redemptions. Transferable points are best utilized for high-end award flights and hotels that normally cost a fortune. Don’t take the easy cash back option without researching if more value can be unlocked elsewhere.
Mistake #8: Redeeming Points Through Bank Travel Portals
Some flexible bank points programs offer the option to redeem points for airfare, hotels, car rentals, and more directly through their own travel booking portal. This “easy” redemption method appeals to newcomers. But again, convenience comes at a cost, sometimes.
American Express, Chase, Capital One, Citi, and others operate their own travel reservations platforms powered by points. But the rates offered by banking portals can be worse than what you would get transferring to airline and hotel partners. I say “can be” because there have been times when booking through a credit card portal would be better than transferring to a travel partner. It’s rare, but it does happen.
Mistake #9: Not Paying Off Credit Card Balances In Full Each Month
The biggest mistake a beginner can make is failing to pay off their travel rewards credit card balance in full each month. Many people understandably get excited about the signup bonuses, rewards, and perks of premium travel cards. But they neglect the critical step of paying balances off completely to avoid interest.
Here’s an example of how this plays out: you open a new card and earn 50,000 points, worth $750 in travel. But you spent more than you could afford at the time and carried a $3,000 balance month to month. Even at a reasonable 15% APR, that’s $450 per year in interest.
That interest cost just erased over half the value of your signup bonus. And because you can’t pay off the debt, you’re cut off from opening any new cards and bonuses until it’s gone. One small balance snowballs into losing thousands in rewards value over time.
The ultimate points and miles strategy depends on opening multiple cards over a period of time to earn signup bonuses rapidly. Carrying debt destroys this. The math simply doesn’t work if you pay 15-25% APR on balances, which negates the 2-5% back you earn in rewards. Yikes…
Always ensure you can pay off balances in full every month before getting started. Rewards become meaningless once high interest costs enter the picture. Avoid debt no matter how appealing the sign-up bonus.
Final Thoughts
Maximizing credit card travel rewards does take some time and effort upfront to learn the intricate workings of loyalty programs. But avoiding these common beginner mistakes from the start will give you a huge leg up to build your points and miles balances faster.
Patience and knowledge truly pay off when you can start redeeming incredible first and business class trips sooner than you may think. Do your homework, understand airline partners, carefully track your points, don’t take shortcuts or assume all programs are equal, and always pay your credit card balance each month (this is the most critical mistake). With this solid foundation, you’ll be well on your way to redeeming amazing trips.
