I have a friend who insists on paying for group dinners with his credit card, and the rest of us paying him back. His goal, of course, is to be “the one to get all the points.” When I pressed him on how he maximizes all those hundreds of thousands of points (we eat out a lot), he revealed his grand plan to save up his points and take a major vacation...in five to seven years. That’s when I had to break the news: His plan was ill-conceived.
The truth is that racking up travel points for years isn’t as savvy as it may seem. Let’s look at why you should always plan to redeem your points and miles fairly often so that you’re not leaving money on the table.
Redeem your points sooner rather than later
It might seem tempting to hoard your points, following the thinking that more points equals bigger travel. However, as The Points Guy explains, your travel points and miles are almost guaranteed to lose value in the long run. In other words: The sooner you can spend them after you earn them, the better the deal.
So when should you be redeeming travel points? As we’ve previously covered, one rule of thumb is to only bank points for what you plan to use in the next year or so. Otherwise, you might be throwing away their value.
Consider a travel rewards card
If you’re a consistent traveler who is serious about getting the best points value for your lifestyle, then you should look into travel rewards cards. Two of the top examples are the Chase Ultimate Rewards and American Express Membership Rewards programs. Compare your options with different best-of lists, like this one from Nerdwallet or this one from Bankrate. Just make sure you’re earning enough points—and redeeming them regularly—to justify the card’s annual fee.
Otherwise, if you find your travel rewards are collecting dust, you might be better off switching to more flexible cash back credit card.
The bottom line
Travel rewards are one of the best uses of your credit card points, but you have to redeem them regularly to get their full value. And with the state of airline prices these days, it’s in your best interest to start planning your vacation ASAP. Don’t delay your joy, and don’t let all your hard-earned points go to waste.