If you’ve been swiping away with your plastics, you’ll be glad to hear of the many ways travel rewards credit cards can help you get away. For starters, don’t be hesitant to use your travel credit card to buy things you already need like gas and groceries. If you love to travel and don’t have a travel rewards credit card by now, you’re probably missing out on even more opportunities for adventure. All too often, these cards, in particular, aren’t used properly which in turn costs the user more money. So with that said, put your mistakes to rest!
Here are some of the most common mistakes associated with travel rewards credit cards and how to avoid them to get the most out of your card.
Not Using the Card for Everyday Purchases and Monthly Bills
In order to reap the rewards of a travel rewards credit card, you actually have to use it. You’re often missing out on free flights, hotel stays and car rentals if you aren’t charging your everyday expenses and monthly bills. Since you have to pay your bills each month anyways, you might as well get something out of your grocery runs and cable bill. In addition to missing out on miles and points, all too often consumers forget to use their card enough in the first few months to obtain the sign-up bonuses generally attached to them. You usually have to spend a certain amount within three months of opening up a new account. These bonuses are often the main advantage of travel rewards credit cards. Missing out on the thousands of miles and points can be a costly mistake.
Signing Up for a Card with a Steep Annual Fee and You Seldom Travel
One of the costliest mistakes you can make with a travel rewards credit card can occur the minute you apply. Many consumers just pick a travel credit card without really going over the fine print. Many of which have annual fees, varying in price depending on how many benefits they yield. If you don’t travel often enough throughout the year, the annual fee isn’t always worth the cost. There are some without annual fees that might be a better fit for you. However, these tend to take longer to acquire the benefits and miles you might want. If you’re on the fence about annual fees, you can usually sign up for a card that waives the fee for the first year. That way you can test out the card, see how much you actually use it for travel and decide if the annual fee pays for itself with the rewards you get in return.
Keeping High Balances
As with any credit card, keeping a high balance month to month can be quite costly. However, with travel rewards credit cards, keeping a balance can be so costly that the miles and awards you acquire don’t cancel out all the interest you have to pay. Travel rewards credit cards often come with a high interest rate. Before you start charging up these cards, make sure you have the funds to pay them off each month. In essence, you should treat your travel rewards credit card like a debit card. Whatever you charge on it you should pay immediately. You can also avoid costly interest payments by merely knowing your APR before you make purchases. Price out your bills and income and be sure you can appropriately pay off your balance each month.
Failing to Utilize All of Your Card’s Perks
Travel rewards credit cards aren’t just about accruing miles and points. Many also have other benefits that you might not even know they have. For example, your card might reimburse you for expenses if your luggage is lost or your flight is canceled. Other cards might cover your car rental insurance. If you’re paying for car rental insurance at the counter, you are often just tossing your money out the window. Before you charge a flight or car rental on your card, check to see what benefits throughout your trip are available to you. You could save a nice chunk of change merely by knowing what your credit card will cover.
Paying Foreign Transaction Fees
It used to be the standard among credit card companies: they would charge a fee for each transaction made abroad. Today, most travel credit cards don’t charge a foreign transaction fee. If yours has one, you’re better off opening up one without the fees and closing the one with fees afterward. If you make a lot of purchases abroad in a year, these charges can quickly add up. Paying foreign transaction fees is generally completely avoidable if you merely select a card that doesn’t charge them.
Using Your Miles/Awards Last Minute
Mileage flights and award tickets come and go in the blink of an eye. Using your rewards or miles acquired from your travel rewards credit card could end up costing you if you wait around until the last minute. These tickets will cost more miles, taxes, and fees the longer you wait. Instead of being cautious, thinking you will get a better deal if you wait, seize the day and book those mileage and award tickets as soon as you see a good deal.
By using a travel rewards credit card carefully, you can often travel more and for less money. Do you have a travel rewards credit card? What other mistakes have you made with these credit cards that ended up costing you in the end? Share your experience with us in the comments below.