Travel rewards cards can come with so many perks and benefits to appeal to you. However, it doesn’t matter if you’re a pro in the game, or a beginner. Unfortunately, it’s easier to make mistakes when using these rewards cards.
Read below for some more tips and pointers on how to avoid these errors.
Check out our list of the best credit card promotions here.
 The Chase Sapphire Preferred® Card offers 100,000 bonus points after you spend $5,000 on purchases in the first 3 months from account opening. You'll earn: • 5x on travel purchased through Chase TravelSM • 3x on dining, select streaming services and online groceries • 2x on all other travel purchases • 1x on all other purchases • $50 Annual Chase Travel Hotel Credit • Get complimentary access to DashPass which unlocks $0 delivery fees and lower service fees for a minimum of one year when you activate by December 31, 2027. Get 25% more value when you redeem for airfare, hotels, car rentals and cruises through Chase TravelSM This card carries a $95 annual fee. |
1. Keep a Balance
This is one of the biggest mistake anyone can make with a travel rewards card. When you keep a balance on this card, it will damage your credit score. Then, after your credit score goes down, it will make it harder for you to open other cards or loans.
Plus, you’ll see that the majority of these cards come with high interest rates. In other words, racking up a balance each month without paying it off will hurt you. Furthermore, it will also decrease the value you get from their rewards you earned.
Pointer: You should pay your balance completely, limit your financial spending, keep track of a budget to see if you go over your income.
2. Missing Payments
Thankfully, this isn’t as bad as keeping a balance on this card. But, they do get pricey and you will most likely be charged with a fee ranging from $25 – $35 if you’re even a day late. Normally, payments that you make after the deadline will be reported to the credit bureaus which will be bad for your credit score.
Pointer: Make it so you have automatic payments. However, keep in mind it will take about a month of two for it to start. Remember, that you must keep making manual payments until it kicks in.
3. Closing Your Credit Card
One common misconception that goes around is that you have to cancel your credit card before you open another. Which is not accurate at all by the way. The only thing this will do to you is make havoc on your credit score. Here are some reasons why:
- Normally, your credit utilization ratio accounts 30% of your credit score. It will compare your account balance with your credit limitations. Having a lower utilization will lead to lower balances and higher credit limits.
- Additionally, how long your credit history is about 10% of your credit score. This is done by taking the average age of your account. Typically, the accounts that have been open longer is much better.
Pointers: You should not cancel your card unless you know for a fact that it won’t damage your credit utilization ratio. Furthermore, if you want to steer clear of annual fees on cards you don’t use, sign up for the no-annual fee version.
4. Losing Your Miles or Points
There are several loyalty programs such as the Delta SkyMiles and JetBlue TrueBlue that last almost forever. Usually, other programs will take out points if they see there isn’t much activity on your account for a specific amount of time. Some inactive time periods will range from 3 – 18 months.
Pointer: One way you can keep your miles and points from expiring is to make 1 transaction a year on all your cards.
5. Missing Out on a Welcome Bonus
The main reason you want to sign up for a credit card is to receive their welcome bonus offer. Not meeting the requirements during the promotion period can result in you missing out on great rewards. Remember:
- This time frame begins right when your application is approved. It does not mean it will start when you get your card.
- Specific spending for: annual fees, balance transfers, and cash advances normally don’t count as a requirement.
Pointer: Remember when your welcome offer expires, and see what will count for your requirements.
6. Using the Wrong Card
There are a few rewards cards that give you bonuses for making transactions at specific merchants. This is for: travel, restaurants, gas, and grocery stores. You don’t want to use a card that earns 1% cashback for your food when you can use the Chase Sapphire Preferred card to get 2x points.
Pointer: Be sure to read through the agreement, terms, and conditions to know how their earning systems and perks work.
7. Ignoring Cards with Annual Fees
It’s normal for many people to see credit cards with annual fees to not be worth their money. But, even if some cards come with a fee, they come with much better welcome bonuses, rewards, perks, and more. Typically, all of these features will make the card worth while with the fee.
Pointer: Look at our list of best credit card bonuses that we update every month.
8. Paying Foreign Transaction Fees
Some credit cards usually charge you with a 3% fee for making transactions in a foreign area. It even includes the foreign conversions into USD. Fortunately, there are many travel credit cards that now waive these fees. There is absolutely no reason for you to pay for foreign transaction fees when there are so many that waive it.
Pointer: Just get a credit card that doesn’t come with foreign transaction fees.
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Conclusion
All in all, there are many sins that can happen when you own rewards credit cards. There is a possibility of you traveling “free” of charge and using benefits to their full potential. However, just be sure that you’re staying away from making the mistakes listed above.
