9 Award Redemption Mistakes To Avoid

9 Award Redemption Mistakes To Avoid
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When it comes to points and miles, earning them is the easy part. Some credit card welcome bonuses are so generous, you’ll have enough to book a round-trip ticket to virtually anywhere. The hard part after you’ve banked that bonus is actually redeeming it for travel. That’s by design: Airlines and hotel loyalty programs count on uninformed travelers to redeem miles for the lowest value or let them expire altogether, creating “breakage”.

But you don’t want to be uninformed—that’s why you’re reading this. If you’re redeeming miles for the first time or are simply looking to get the most value out of your miles possible, you’ll want to be on the lookout for the most common missteps and avoid them. Here are nine mistakes to avoid when redeeming points and miles:

1. Collecting the Wrong Currency for Your Travel Goals

While it’s tempting to apply for a credit card because the welcome offer looks enticing, you should always collect rewards based on your personal travel habits and goals. If you’re hoping to use points for a trip to Europe, collecting Southwest Rapid Reward points won’t do you any good.

Take into account both where you live and where you want to travel. If you live in the Dallas, Texas area, American Airlines Aadvantage miles will most likely be more beneficial to you than Delta SkyMiles. If you prefer AirbnBbs over chain hotels, then getting a The World of Hyatt Credit Card won’t be useful, no matter how large its property portfolio. You might be better off channeling your spending on the Capital One Venture Rewards Credit Card and redeeming those rewards on Airbnb bookings.

Setting travel goals and planning ahead can help you avoid the mistake of collecting the wrong currency and having to start from scratch. A good strategy is to collect flexible rewards like Amex Membership Rewards or Citi ThankYou Points, to name a few. These rewards are transferable to over a dozen different airlines and hotel programs. Earning these points gives you plenty of redemption options if you’re unsure how exactly you’ll use your points.

2. Not Diversifying

With the dynamic nature of most loyalty programs these days, diversifying is more critical than ever. If you’re saving up Delta SkyMiles for a trip to Europe and suddenly find the redemption rate has tripled, you won’t have to cancel your trip if you have backup rewards.

Better yet, if you have flexible rewards, you can transfer your rewards to a myriad of airlines when you’re ready to book. And if none of them have award availability, you can convert your points to statement credits or use them to book through a designated travel portal.

3. Not Knowing the Value of Your Points

Points and miles are valuable tools for cutting down travel expenses and the last thing you want to do is let them go to waste. Not knowing how much your points are worth can lead to significant award redemption mistakes. Sometimes airfare is cheap relative to saver award space. You might be better off paying cash for your ticket rather than redeeming miles.

For example, Iberia frequently runs airfare deals on economy flights to Spain as cheap as $350 round-trip. In these situations, it makes more sense to pay $350 than to redeem 60,000 AAdvantage miles since you’re getting less than 0.6 cents per point.

To avoid this fate, you’ll want to compare award rates against cash prices. Simply divide the cash price by the point rate to determine your redemption value. For example, if a $200 Alaska Airlines fare requires 12,500 miles, your redemption rate is 1.6 cents per point.

Many sites, including Forbes Advisor, publish award valuations for hotels, airlines and bank currencies. While valuations can be subjective, they provide a good baseline to compare your award redemptions against.

4. Paying Fuel Surcharges

Foreign carriers like Lufthansa and British Airways impose hefty fuel surcharges on award tickets that can top $1,000 each way. This can get quite expensive if you’re booking award tickets for two or more people. Even for solo travelers who collect miles to save on travel, paying $1,000 in fuel surcharges is not optimal.

Luckily, you can avoid paying airline fuel surcharges by booking with an airline that doesn’t impose them. For example, Avianca Lifemiles lets you book Lufthansa first-class seats without the fuel surcharges. While Miles & More charges over $1,500 in taxes and fees for a round-trip first-class ticket to Germany, Avianca charges just $53.

Knowing which airlines pay fuel surcharges and the alternatives will help you save money on award redemptions. The key to being able to do this is diversifying your points portfolio and having transferable rewards to draw from when you need to book travel.

5. Falling for Booking Traps

Airlines like American Airlines will boast of having “no blackout dates,” but that just means you might end up redeeming twice as many miles for a non-saver award. Other times, you might see an outrageous rate for a non-saver economy-class award that’s higher than a saver business-class ticket.

Avoid falling for booking traps like these by familiarizing yourself with award charts and browsing fare calendars for the lowest deals. Also, don’t rely on airlines to show you the lowest rates based on your search. Compare the cost of economy, business- and first-class awards. The last thing you want to do is pay a higher rate for a worse seat because you didn’t take this crucial step.

6. Searching Award Space in the Wrong Place

The first time I redeemed points for an award, I searched the American Airlines website for flights to the Middle East and came up empty. I eventually learned that partner award space wasn’t searchable online and had to call the AAdvantage booking desk to book those awards.

Nowadays, airlines have better-integrated partner award inventory online. But there are still some awards that won’t be bookable online. Just because you can’t find the partner award flight you want, that doesn’t mean it’s not available. Call the airline and see if you can snag that seat for a reasonable price.

Before searching for award space, it might be worth your time to look at your loyalty program’s award booking page. See if there is any information about partner awards and whether they’re all bookable online. This can save you time and ensure you don’t miss out on award space because you’re searching in the wrong place.

7. Not Leveraging Stopovers and Open Jaws

Maximizing your points isn’t always as simple as booking a round-trip ticket in first class. Familiarizing yourself with different loyalty programs and their award routing rules can help you stretch your points further. By leveraging stopovers and open jaws, you can get more value from your points.

For example, if you’re headed to Bali, you can redeem 70,000 AAdvantage miles for a one-way ticket in business class. But with the Alaska Mileage Plan program, you can book the same award for just 50,000 miles and get a free stopover per one-way flight.

Airline miles are hard to come by and more banks are placing restrictions on credit card welcome bonuses. So you want to maximize your rewards as much as possible. There’s no better way than to leverage stopovers and open jaws to work in multiple trips on a single itinerary.

8. Searching for Award Space at the Wrong Time

You may have heard from dubious sources that booking your ticket on a specific day of the week gets you the best deal. The truth is that your travel dates (and demand) are the most significant factor in determining how much you’ll pay. Timing is just as important when you’re redeeming airline miles. Many airlines release award space 330 days before departure. Hop online 330 days before your planned trip and you’re more likely to snag that award seat you’ve been saving up for.

While booking in advance is always best, some airlines don’t release award availability until closer to departure. That’s the case for Lufthansa, which releases their coveted first-class seats on long-haul routes two weeks before departure. So if you’re looking for these seats in advance and not having any luck, this is why.

Searching for award space at the wrong time can cause frustration and ultimately waste time. Knowing when airlines release award space will avoid this hassle and increase your chances of booking the seat you want.

9. Letting Points Expire

Last but definitely not least, the biggest award redemption mistake is letting your points expire before you can redeem them. Many airlines and hotels no longer have expiration dates, meaning you don’t have to worry about keeping your account active. These include Delta SkyMiles, HawaiianMiles, JetBlue TrueBlue, Southwest Rapid Rewards and United MileagePlus.

But several still have expiration policies in place. If you don’t earn or redeem miles within a specified period, you’ll forfeit your points.

  • American AAdvantage miles expire after 24 months of inactivity
  • British Airways Executive Club miles expire after 36 months of inactivity
  • Hilton Honors miles expire after 24 months of inactivity (although expiration is currently paused until December 31, 2022).
  • IHG One Rewards miles expire after 12 months of inactivity
  • Marriott Bonvoy miles expire after 24 months of inactivity
  • Singapore Krisflyer miles expire after 36 months of inactivity
  • World of Hyatt miles expire after 24 months of inactivity

Bottom Line

Points and miles are incredibly valuable and becoming more difficult to earn. With banks imposing limits on credit card approvals, earning points via credit card welcome bonuses is more challenging. That’s why it’s more important than ever to get the most value out of your airline miles. Keep these mistakes in mind and you’ll be on your way to your dream destination without draining your mileage balance (or wallet).

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