Don’t Lose Your Credit Card Point Rewards

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credit card point rewardsMy wife and I recently spent 6+ hours in the car together driving to and from a wedding.  During the trip, my wife shared that her sister had once used a credit card that accumulated rewards points.  She confessed that she had been meaning to redeem the points and then switch the card over to cash back.  But she hadn’t gotten to it.  She wondered if those points would expire… I told her that she’d better check!

 

Editor’s Note: I’d like to say that I finally redeemed her points for my sister.  Phew, that was on my to-do list for WAY too long!  Thanks for the prompting, Rob 🙂  It may have been a blessing in disguise to have delayed it though.  I was able to convert the points to cash back and was not able to the last time I looked into it, hence why I put it off.  At the time, I couldn’t decide what type of gift card or magazine subscription my sister would benefit from most.  I do plan to seek out a new cash back credit card for her though since they cannot simply “switch” her current one.

 

Travel Rewards Card

credit card point rewardsWhen I first met my wife, her family exclusively used a rewards travel credit card as a family, that gave them a certain amount of points per transaction.  I initially asked how many points they got per purchase, but they themselves were a little unsure.  My wife’s Mother had been sold on it at some point and thought that was the best deal at the time.  Their family would take yearly international trips, so it made sense.

 

After her passing, they didn’t intend to travel as frequently.  I did a little digging, and it turned out that the card was no longer the best option for them.  It had an annual fee associated with it, and by checking out some reputable credit card review websites, I quickly learned that they could do much better.

 

At the time, I’m sure that the credit card that was selected was fantastic.  However, their priorities had changed, yet they hadn’t sought out another credit card to align with the changes. 

 

Unused Credit Card Points

credit card point rewardsSince her family was not traveling as frequently, their accumulated points were left unused.  As a result, large amount of points would expire every year.

 

Unfortunately, this is not uncommon.  Research has shown that roughly 1 in 3 credit card rewards go unused every year.  This is why you might see travel credit cards offer rates better than cash back credit cards.  The best cash back credit cards are around 1.5% cash back on a purchase, with some reaching as high as 2%.  

 

Since travel credit card users do not always redeem their points, credit card companies typically offer huge promotional mileage points to open a card, along with rates that exceed 2% at times.  Clearly, these credit card companies know how to reel people in.

 

Travel Hacking

credit card point rewardsThere are a ton of people who travel hack.  I enjoy reading their various tips and tricks to maximize travel rewards and minimize airline and hotel costs.  

 

Personally, I would love to travel hack and admire the various travel and personal finance bloggers that are travel hacking their way around the world.  

 

This is one of the reasons that I am constantly checking out credit card reviews to spot more lucrative options.  So far for our family, the cash back reward works really well.  But, I am interested in travel hacking in the future.  

 

Honestly, the only reason that my wife and I haven’t delved into travel hacking is because our small child does not travel well.  We went to look at houses today for an hour, and he fussed most of the way in the car.  Needless to say, even though he’s not a great traveler yet, we hope it’s just a phase.

 

 

Yearly Check

credit card point rewardsI encourage everyone to take a look at their credit cards at least once a year.  You never know if a new one might come along that would make more sense for you.  Just like my wife’s family, sometimes goals and priorities change.  If your rewards don’t fall in line with new goals, before you know it, you might forgo years of useful rewards as a result.

 

NerdWallet is by far the best website for checking out current credit card options.  Under the “Credit Cards” tab, you can check out the most profitable credit cards for specific categories (rewards, travel, business, etc.).  Check it out!

 

Readers, what kind of point rewards system does your main credit card offer?  Have you ever traveled hacked?  Have you ever changed your main credit card because of the rewards system?  Share your thoughts below.

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44 Comments

  1. I shuffle cards about five nes a year to utilize signup bonuses for travel hacks. Maybe tens of points go unspent when switching cards because you can never hit just perfectly. In the context of the 200k points I earn a year though it’s not really measurable. I did read the same data you provided too though. It’s sad because that’s money people are leaving on the table. Churning cards requires careful monitoring of points and renewal dates. As such it’s unlikely more active travel hackers are losing many points.

    • I love Capital One’s card since I can set it to automatically cash out at a certain level. I just have it set so it cashes out every time I reach 100.
      Daniel Palmer recently posted…Why Save?My Profile

    • Thanks for sharing Fulltime Finance!!! I definitely agree that travel hackers are probably not losing very many points. I have a feeling their eye is on the prize at all times 🙂

  2. We have one credit card (which we pay off each month) that we use for cash back! The amount we make is not grand, but hey, it’s something! I LOVE IT! I have not considered travel hacking, but may look into that some time the future.

  3. We used credit cards points a lot for travel before we had our son. We went to Ireland, on Caribbean cruises, Phillies Spring Training in Clearwater, FL, and Newport, RI. We didn’t travel very often, but we made the most of it when we did. I spent my 30th birthday in Ireland. It was actually cheaper to go there than anywhere in the US. We stayed in Dublin, visited all the places that would’ve been crowded but weren’t because it was offseason, and went on a day trip to Belfast. Oh, and drank plenty of Guinness! It was our second time there actually because honeymooned in Ireland as well. Did a tour of the southern tip — driving ourselves! So much fun 🙂
    Dave @ Run The Money recently posted…Money Management for Couples: Don’t Let Your Wedding Day Derail Your FinancesMy Profile

    • Thanks for sharing Dave!!! My wife and I spent two days in Ireland as well 🙂 If we have a chance to go back I’d love to the Cliffs of Moher!!! The pictures look breath taking 🙂

  4. When I was still in school, I hade a GM Visa card that lets me earn 5% of my purchases up to $500 per year and I can accumulate it for up to 7 years. After a couple of years, I did not want to buy a new GM vehicle and I canceled my card and left all the points unclaimed.

    Nowadays, I am only interested in cash back cards. Anyone card that pays me a high percentage of my purchases as cash back, I will be interested. With my current master card and visa combination, I get an average of about 1.5% cash back on my purchases.

    I have never travel hacked before and would love to do it when my kids cooperate and enjoy going on trips.
    Leo T. Ly @ isaved5k.com recently posted…The Benefits Of Investing With A PartnerMy Profile

    • Thanks for sharing Leo!!! Sounds like we have similar paths when it comes to owning credit cards and trying to travel hack in the future 🙂

  5. I love the reward points for using credit cards. Unfortunately we seem to accumulate points too fast sometimes hahaha. I just recently encouraged a friend of mine to start using a card that rewards points vs his debit card that he would always use that would give him nothing. Leaving money on the table.
    Mr Defined Sight recently posted…Guest Post: 4 Assets That You Should Not Invest InMy Profile

    • Thanks for sharing Mr. Definied Sight!!! I would definitely use a credit card over a debit card given the choice. Plus the security associated with a credit card is really nice 🙂

  6. I check my CC online statement so often that I generally have an idea how many points I have. A couple times a year I will redeem, but usually for balance credit. It makes it feel like I have a cheaper bill and sometimes that is more than the actual reward/gifts offered by the CC company.
    SMM recently posted…Sell Winners And Buy Losers – Asset RebalancingMy Profile

    • Thanks for sharing SMM!!! Like you I check my credit card bill constantly. Every $20 that I make with my rewards card I set up as a statement credit. I rather that money work for me immediately 🙂

  7. Hey MSM,

    I travel with my small children on international flights regularly. The best tip I ever discovered was the “Christmas Flight.” Especially when they are ages 2-6, bring a bunch of small toys gift wrapped in a bag. During the flight, give your child a chance to pick a gift once an hour. Throw in a movie or TV show and it has always worked really well!

    Good luck!
    (Also I love the “no foreign transaction fees & automatic trip insurance” of the Sapphire)
    Jack Catchem recently posted…7 Surprising Things Which Won’t Disqualify You From PolicingMy Profile

    • Thanks for sharing Jack!!! That is a brilliant idea regarding the “Christmas Flight.” I will definitely have to try that when we fly next. That sounds super fun and something to look forward to 🙂

  8. My husband and I have been accumulating points on our Chase card to use for our trip next year, but we also have the American Express blue cash preferred which we use for groceries, gas and department stores. We figured we couldn’t beat the 6% cash back on groceries and that easily covered the small fee associated with the card. I just checked after reading your post to make sure the points / dollars on these cards don’t expire, luckily they do not! Thanks for the great post.
    Courtney @ Your Average Dough recently posted…An Update On My Mutual Conversion InvestmentMy Profile

    • Thanks for stopping by Courtney!!! That’s really smart to use the American Express, especially if you get 6% cash back on groceries. Seems like a no brainer to me 🙂 Glad you don’t to hear that you don’t have points that expire!!!

  9. EVERYTHING I buy goes on credit cards. I know that people say not to pay with credit and pay with cash, but I’m one of those rare people with self control and am able to have the best of both worlds, pay off the card every month with no problem and get the rewards points which eliminates most of my payment in January with no changes to my consumption habits.

    • I’m like you Duncan!!! We put everything on the credit card and are usually pretty frugal. Plus I love how everything links up on Personal Capital 🙂

  10. I only use one credit card (paid off monthly) right now and am averaging ~$60/month in cash back. I typically use my cash back within a couple of months to either pay the CC or it is link to my amazon account and use it there. I think travel hacking will come in the future when my daughter is a little older.
    FIbythecommonguy recently posted…Net Worth Report #1- BaselineMy Profile

    • Thanks for sharing FIbythecommonguy!!! Sounds like you are definitely utilizing your credit card for some good 🙂 That’s a healthy cash back each month!!! Thanks for stopping by!!!

    • Thanks for stopping by Erik!!! I’m like you with I have a main credit card and then a back up. The main credit card gives 1.5% cash back while the other is used for overseas travel with no foreign transaction fees. Two is enough for now. But I am excited to travel hack in the future 🙂

  11. The card that’s always in my wallet is the Fidelity cash back (2%), but I try to use it rarely – I have a revolving door for my primary card as I try to earn the intro bonuses. The new Chase policy limit of 5 cards in 24 months has been a downer 🙁 One thing that is a must if you start cycling through 5+ cards is a spreadsheet – it makes it really easy to manage, though it is a little odd to be managing credit cards with a spreadsheet…
    Paul recently posted…A Swimming Pool Is A Terrible InvestmentMy Profile

    • I’ll have to check out that Fidelity cash back at 2%. That’s a great return. Thanks for the tip on using a spreadsheet to manage credit cards. I have a lot to learn.

  12. Doing a yearly check is great advice and something that’s easy to forget. If you don’t check your options every now and then you won’t know what you’re missing out on. You could be passing up a lower interest rate or better rewards without knowing it.
    Mike recently posted…The True Cost Of Owning A PoolMy Profile

    • Thanks for stopping by Mike!!! I definitely agree that it’s easy to forget to check around. I think the banks expect us to be lulled and forget about things 🙂

  13. I love getting credit card points! I purposely put most of my expenses on my credit card sot that I can earn as many points as possible. I generally will pay off my credit card after each expense so that I never rack up a balance but I can still get the points.

    I currently have my point system set up so that every time I reach a certain level, it will automatically cash out and repost $100 into my account. This way I never forget and never have points expired. Pretty awesome! Thanks for the great post!

  14. I am a big fan of reward cards, but only if they make sense and are paid off in full each month! I’ve done very well on my travel points, and always use them (it’s given us some fantastic upgrades on flights to first class!). Recently that expired on one, and so I have switched to another rewards card that I just keep collecting points on, and they send me vouchers for that shop which is great as we are saving up for a major purchase with them, already have over £500 of rewards from it!
    Cheers,
    FiL
    FIREin’ London recently posted…April ’17 PerformanceMy Profile

  15. I totally agree with checking your cards on a regular basis. I don’t have a credit card, but this is a good idea for debit and various fidelity cards as well.

    We actually have a couple of fidelity cards we could use to get discounts at various hotels or when buying airline tickets. If you have a lot of points, you can actually save quite some money! However, you’d have to book through the companies they’ve partnered up with, and since we usually find even cheaper options by ourselves, we use the points for other stuff.
    Adriana @MoneyJourney recently posted…5 ways to invest in real estate (even with no money)My Profile

    • Thanks for sharing Adriana!!! We definitely prefer the cash back cards to points at this point. If we ever got into travel hacking, we’d definitely consider the points 🙂

    • Thanks for sharing DC!!! I definitely want to try to travel hack when my son gets older. Definitely seems like a no brainer if you don’t have credit card debt.

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