Saving Credit Card Travel Rewards Can Cost You $1,000

Earning travel credit card reward points can feel exciting, like building up an extra bonus savings account of special currency that you can use just for travel. But along with earning points and miles, you need to make a plan for how to actually redeem those points.

Too many people focus only on saving their credit card travel rewards and never cash them in. This is a bad idea! For one thing, credit card travel reward points don’t earn interest like the best savings accounts do. And sometimes holding on to those points and miles can hurt you in unexpected ways.

We talked with Danielle Desir Corbett, an expert in affordable luxury travel, to see what happens when people hold on to their credit card points and frequent flyer miles for too long — and what you should do instead.

How to lose $1,000 on expiring airline frequent flyer miles

Corbett knows firsthand about the financial losses that can come from not redeeming frequent flyer miles and credit card rewards. “Expiring travel rewards is a problem I’m all too familiar with,” Corbett said. “Overnight, I recently lost 123,000 AAdvantage® miles, a collection I’ve accumulated for several years. These miles, which I had planned to use for our delayed honeymoon, expired after 24 months of inactivity.”

Some airline frequent flyer programs have miles that do not expire. But unfortunately for Corbett, American Airlines AAdvantage® miles expire after 24 months — unless customers take certain actions to keep their accounts current.

“Despite receiving reminder emails about my account status, I mistakenly believed booking a flight through American Airlines would keep my miles active,” Corbett said. “Unfortunately, the flight departed after the expiration date, resulting in the loss of all my miles. To reactivate these 123,000 miles today, I must pay a hefty $1,000.”

The lesson: Make sure you understand the fine print and terms and conditions of your airline frequent flyer program, hotel loyalty program, or any other travel rewards program. “Never assume,” Corbett said. “Call customer service for guidance.”

Here are a few questions you might want to ask:

• Do my credit card points expire?
• Are there time limits, cutoffs, or blackout dates for redeeming miles or points?
• What are the restrictions on how I can use miles and points?
• Can I transfer unused points or miles to a travel partner, such as a partner airline’s frequent flyer program?

Chase Sapphire: Flexible point redemptions and transfer partners

One possible downside of airline frequent flyer programs (and some airline credit cards) is that the points you earn on your card can mainly be used for air travel. Instead of focusing your credit card spending just on one airline, many people might want a more flexible way to use travel rewards credit cards.

Corbett recommends the Chase Sapphire credit cards because they offer flexible ways to redeem your points — for air travel, hotels, and more. And Chase Ultimate Rewards® points never expire as long as your credit card account is open.

The Chase Sapphire Preferred® Card has a $95 annual fee, but it offers several valuable perks, such as:

• 25% higher redemption value when booking points through the Chase Travel portal
• Ability to combine points with other Chase credit cards
• Some trip cancellation, baggage, and car rental protection

“Chase’s redemption flexibility caters to travelers of all redemption skill levels,” Corbett said. “Those who prefer cash back can redeem their points for gift cards, statement credit, or directly deposit them into their checking and savings accounts. Or you can redeem Chase Ultimate Rewards points for airfare, hotel, or car rental bookings directly through the Chase Travel portal, or transfer your Chase points to airline and hotel partners like Marriott Bonvoy or JetBlue.”

The lesson: The best travel credit cards can give you more flexibility for how to redeem your points for travel, without being limited to one airline or type of travel. The Chase Sapphire Preferred® Card and the premium Chase Sapphire Reserve® can give you a multiplier effect for redeeming points for travel. And being able to transfer points to airline frequent flyer programs or hotel loyalty programs makes these cards extra versatile, like having several airline and hotel credit cards in one.

Wells Fargo Autograph Card: Now even more valuable

Chase Sapphire cards aren’t the only travel credit cards that offer points transfers to travel partners. Wells Fargo also offers this valuable benefit with its newly revamped Wells Fargo Autograph℠ Card (see rates and fees).

“Now that you can transfer your Wells Fargo Autograph℠ Card points to six transfer partners, the Wells Fargo Autograph℠ Card is even more valuable,” Corbett said. “You can even pool your points with family members and friends for upcoming redemptions, reaching your travel goals faster.”

Bottom line

Don’t let your credit card points or frequent flyer miles just sit there — put them into action by redeeming them for travel. Some airline frequent flyer programs have miles that expire. And even if your credit card points never expire, they don’t earn interest or otherwise “grow” in value with each passing year.

It pays to redeem your points sooner rather than later in case travel prices go up or loyalty programs decide to devalue your points. Instead of focusing on saving your points, make a plan to redeem your travel credit card points and turn them into happy travel memories.