10 common travel credit card mistakes you need to avoid

The Bank of America content was last updated on January 18, 2023

A travel credit card can be the ticket to big savings on flights, hotels, rental cars and other travel expenses. But how do you know if you’re using your travel card to its full potential?

For example, are you taking advantage of card features and benefits such as priority boarding, airport lounge access or free checked bags when flying? If not, you may be missing out on some of the best benefits your credit card offers. Nearly three years after the pandemic hit, the World Tourism Organization recorded that international tourism is increasing, with arrivals reaching nearly 60 percent of pre-pandemic levels.

If you’re one of many soon-to-be vacationers, you should avoid the following missteps to wring out the most mileage possible out of travel credit cards. After all, you should make your credit card serve you and your needs, not the other way around.

Here are 10 other common travel card mistakes to steer clear of as you navigate your way to maximum savings:

1. Redeeming travel rewards for cash back

Your travel credit card may let you redeem miles or points for cash back, but that doesn’t mean you should.

“In most cases, it’s never worth it to redeem rewards points for cash because the travel you can get with those points or miles is far more valuable,” said J.R. Duren, terms editor at The Balance, in a previous interview.

Duren pointed to the Chase Sapphire Preferred Card as an example of how much value you can lose by picking cash over travel.

“If you rack up 40,000 points, the cash value of those points is $400,” he says. But redeeming your rewards for travel through the Chase Ultimate Rewards portal earns you a 25 percent bonus, raising the value to $500.

Using your points for travel puts you ahead by $100, but you can bump that up even more by transferring points to one of Chase’s travel partners. Using Hyatt’s loyalty program as an example, Duren says booking an eight-night stay with those points can save you more than $800.

In that scenario, the cash value of your points is doubled. You don’t have cash in hand, but you’ve got something that’s even better: more than $800 savings on travel.

2. Losing value on rewards transfers

Some travel credit cards allow for 1:1 transfers to hotel and airline loyalty programs. The drawback is that you may end up transferring points or miles for a lesser value.

The best thing to avoid shortchanging your rewards value? Read the fine print, said Natasha-Rachel Smith, the former vice president of global communications and public relations and consumer affairs expert at TopCashback, in a previous interview.

Know how much value you’re getting upfront for your rewards. And pay close attention to any hidden costs — some rewards programs require you to pay a small fee with each transfer. Depending on how often and how much you transfer, you should ensure that your transferred rewards far outweigh the transfer fees you would pay.

“Whether the point of transferring rewards is to extend the expiration date or gift someone miles, make sure you don’t pay anything out of pocket,” Smith says.

3. Allowing miles or points to expire

Some travel credit cards have use-it-or-lose-it rewards programs. If you’re not putting your rewards to work, you’re essentially throwing money away.

According to Robin Saks Frankel, credit card and personal finance writer, you should know the rules for rewards expiration inside and out.

Smith suggests trying to extend the life of your rewards by making a small redemption or purchase to keep them active. “Earning as little as one point could be enough to keep your rewards balance safe,” she says.

Easy hack: “Set up calendar alerts to make sure you don’t lose out on your hard-earned rewards,” Frankel says.

4. Buying points or miles when you don’t need to

Certain cards allow you to buy miles or points to get to your next redemption faster. With the Alaska Airlines Visa® credit card, for instance, you can buy miles at a discount through Alaska Air’s Mileage Plan.

According to Duren, buying points or miles rarely benefits you, even when they’re on sale. The exception may be if you’re a few hundred points away from being able to book a flight or hotel stay with points and you need a little extra push to get there.

Paying more for your miles out of pocket than you would if you earned them by spending on purchases doesn’t make good financial sense.

“Rule of thumb when acquiring miles and points is, if it’s not free or cheap, then it’s not worth it,” Smith says.

5. Missing out on partnerships with your favorite hotels or airlines

Picking a card that doesn’t partner with brands you prefer sets you up for rewards failure early on, Duren says.

And that includes not understanding where a brand’s best value is for flights or hotels and being unfamiliar with the rules and limits on redemptions.

“My wife and I are Hyatt loyalists, so we know all the ins and outs of upgrades, tier benefits and Chase points transfers,” Duren says. “If we switched to Marriott, we’d have no idea what we were doing.”

It pays to be extra careful when choosing a card that’s co-branded to an airline that you know and love. An airline may offer generous rewards when booking flights, but if it has limited flight routes and doesn’t fly to a destination you often visit, those rewards may not take you very far. You have to pick a card that fits your specific situation.

Be sure to do your research on a card and its issuer’s transfer partners thoroughly before you apply. For example, don’t apply for the Capital One Venture Rewards Credit Card with the intention of transferring your miles to Delta Air Lines, only to realize Delta is an exclusive partner of American Express.

6. Paying for travel perks you won’t use

Free checked bags and companion tickets are sweet incentives to sign up for a travel credit card. The problem is these freebies aren’t really free if the card has a high annual fee.

Balancing the value of travel extras against what you’re paying for an annual fee comes down to how frequently you travel.

“If you regularly fly for business, something like free TSA PreCheck is a great perk,” Duren says. If you only fly once or twice a year? Not so much.

The cards that offer statement credits for TSA PreCheck or Global Entry fees also tend to offer other top-shelf benefits, such as free lounge access and annual statement credits for travel-related incidentals. Not surprisingly, they’re also the cards with some of the highest annual fees.

For instance, if you apply and are approved for The Platinum Card® from American Express or the Chase Sapphire Reserve card, you’ll pay an annual fee of $695 or $550, respectively.

Not sure if that’s reasonable for your budget? “Before you commit to paying a hefty annual fee, take a hard look at your lifestyle to judge if the benefits are worth it,” Smith suggests.

7. Incurring foreign transaction fees

Foreign transaction fees can be the bane of an international traveler’s existence. Cards that charge this fee tack on a surcharge of 1 percent to 3 percent on anything you buy outside the U.S. — as well as for online purchases made on websites based abroad.

That’s money wasted unnecessarily. “Any good travel card will forgo foreign transaction fees,” Frankel says.

The Capital One VentureOne Rewards Credit Card is one foreign transaction fee-free option; the Chase Sapphire Preferred card is another.

8. Choosing the wrong booking option

Should you book through the airline or through your card’s travel portal? It’s a tough question — and one you can’t afford to get wrong.

Booking directly through the airline may be easier than using your card’s travel portal as a middleman. It also might offer better flight options, with fewer restrictions and more generous return policies.

On the other hand, if your card offers a bonus when you book through the portal, booking with the airline would mean missing out on those extra miles or points.

Duren says to carefully consider pricing before you book through your card’s travel portal. If the pricing for flights or rooms is higher through the portal versus booking directly with the airline or hotel, that shrinks the value you get from earning a rewards bonus.

9. Forgetting about rewards categories

Some travel credit cards keep things simple by letting you earn one flat rewards rate on everything you spend. Others mix things up with different rewards categories.

The American Express® Gold Card is a great example of a card with multiple bonus categories. It offers 3X points for flights booked directly with airlines or at AmexTravel.com and 4X points at U.S. supermarkets (on up to $25,000 in spending per calendar year, then it’s 1X point) and restaurants. Other purchases earn 1 point per dollar.

Seems simple enough, but can you go wrong if you book flights through travel sites such as Kayak or Orbitz? A flight’s a flight, right? Not exactly. In that scenario, you’d only earn 1 point per dollar on your booking, instead of 3 points, since it was made with a third-party site.

For those who struggle to keep track of where you can earn the most rewards, you should stick with a travel card that pays the same generous rewards rate on everything you spend, like the Capital One Venture Rewards Card.

10. Overspending for a sign-up bonus

Getting a big introductory sign-up bonus with a new travel credit card feels like hitting the jackpot, but chasing after those bonuses can be dangerous.

Duren says introductory bonuses make you focus on the short-term payoff rather than thinking about the card from a long-term perspective. In the process, you overlook a critical part of the equation: the minimum spending requirement.

“If you’re choosing a new card based on the sign-up bonus, ask yourself if meeting the minimum spending requirement is worth it,” Frankel cautions.

Be smart and look at things objectively as you compare bonus offers. If you have to spend $3,000, $4,000 or $5,000 to nab the bonus, how likely are you to pay it off in full right away? The more interest you pay because you’re carrying a balance, the more value is siphoned away from the rewards bonus. Welcome offers are really only worth it when their spending goals align with your usual spending and don’t force you to spend wildly over budget.