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My 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
When 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
Since 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.
There 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.
I 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.