Updated: Aug 31, 2023

The Worst Travel Credit Card Mistakes That Will Cost You a Free Flight

Using a travel rewards credit card to earn free flights is a smart move but it can end up backfiring if you're making these costly mistakes.
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When travel season hits you will want to cash in on those miles or points you've racked up with your rewards credit card. It's great that you have a rewards credit card, but if you don't know how to redeem or maximize your points, you're basically cheating yourself out of the goodies your card is offering. However, there are some mistakes that you could make that might cost you a free plane ticket.

Not Maxing Out Category Bonuses

When it comes to how you can earn rewards with a travel credit card, you can go with one that offers a set number of points or miles on everything you spend. That's a good choice if you want to keep things simple and earn rewards everywhere you go but you can get more mileage out of your card by choosing one that offers a tiered rewards structure.

Did you know? Many credit cards require you to activate your rewards categories before you can earn more points. This is usually sent to you via email and all you have to do is click yes.
For example, the FlexPerks Business Edge Travel Rewards Card from U.S. Bank pays out double points on the category you spend the most in during each billing cycle plus double points on most cell phone expenses. Currently, the categories are airline expenses, gas and office supplies. The card also offers triple points when you use it to make a charitable donation to a qualified organization and one point on everything else.

When you've got a card that offers multiple ways to score rewards, the worst thing you can do is not max out your earnings in each category whenever possible. This is particularly true if you've got a card that rotates categories every quarter.

With the FlexPerks card I mentioned earlier, you don't have to activate it to earn bonus points, that but you still have to be savvy about how you spend. For example, if you charged $1,000 in airfare, $500 in groceries and $300 in gas one month, you'd earn 2,800 points. Including the $200 for a donation to your favorite charity and charging your $100 cell phone bill would add another 800 points to the total. The key is to know what categories are going to earn you the most rewards so you can target your spending accordingly.
Tip: Some cards with rotating category bonuses cap the amount of rewards you can earn per quarter. If that's the case with yours, you'll want to have a back-up card you can use to continue earning travel rewards once you hit your limit.

Not Paying your Credit Card Balance

Image via Flickr
Image via Flickr

Carrying a balance on any credit card usually isn't the best move but it's an especially bad choice if you're doing it with a travel credit card. Unless you've got a card with a 0 percent rate, you're going to have to pay the credit card company interest each month which can nibble away at the rewards you're earning.

Here's an example to illustrate how carrying a balance can make that free flight you're working towards more expensive. Joe uses his travel rewards card to book a hotel and rental car for his next trip. The card pays double points on these purchases and he spends $1,000, earning 2,000 points in the process. The points convert on a 1:100 basis so they're worth $20.

The card Joe is using charges an interest rate of 15 percent. Instead of paying it off in one go, he plans to break it up into four payments of $250. By the time the balance is wiped out, he's paid in $32 in interest. That's not a huge amount but he's canceled out the bonus he received from making the purchase in the first place and owes an extra $12.

The bottom line? If you're paying interest on several thousand dollars worth of charges from month to month, you're basically paying money to earn rewards, which defeats the purpose of using a travel credit card in the first place.
Tip: If you plan on carrying a balance, just go with a 0 percent interest card. At least you'll have 15-18 months to pay your balance without worry about interest.

Redeeming Miles for Merchandise


In an effort to offer customers more variety, many travel credit cards now give you the option to redeem your miles or points for merchandise, but you're selling yourself short if you choose this option. When you swap your miles for merchandise, you typically end up getting far less for them in terms of value than you would if you used them for a free flight.

Let's look at the FlexPerks Business Edge card again. Once you hit 20,000 points, you can cash that in for a $400 plane ticket. That means that each point you earn is worth about two cents. Now let's say you have the option to redeem 100,000 points for an Apple MacBook Air, which retails in the Apple store for $899.

If you do the math, that means your points are worth roughly 9/10 of a cent. It's entirely possible that you could end up getting even less value, depending on what it is you're redeeming for. Unless you don't mind having to take such a steep discount on your points, you're much better off sticking with using your travel rewards for travel only.

If you're a regular travel credit card user, what other mistakes do you recommend staying away from? Leave us a comment below!

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