3 Mistakes to Avoid When Collecting Travel Rewards

Don't make these potentially costly mistakes.

It's no stretch to say that travel rewards credit cards have changed the way many of us plan our travel. With a few careful card picks, you can earn enough travel rewards for a family vacation or luxury trip you'd never afford otherwise.

However, effective use of travel rewards isn't simply a matter of swiping and redeeming. It takes careful planning to put together a rewards trip, from choosing rewards currencies to coordinating redemptions across multiple brands for a cohesive trip.

Although a solid plan doesn't guarantee a perfect trip, a little forethought can help you avoid many of the mistakes common to rewards collectors -- including these three.

1. Not considering all the travel options

The key to booking travel with rewards is flexibility. In many cases, you're at the whim of award availability, which can be particularly limiting during popular travel times. If you're too focused on set options, such as travelling on precise dates or with a specific airline, you could be seriously complicating your job.

For example, your local airport may only have one or two airlines, which limits how you can earn your rewards -- especially if your local brands don't have great airline credit cards. Flying out of a nearby hub could open up your options, letting you choose a rewards currency that's easier to accrue.

Being too rigid about your travel options can also lead to missing out on rewards deals that could lead to more valuable redemptions. For instance, one transferable rewards credit card may have more hotel transfer partners than another. But better transfer rates could make the second card more valuable if you're flexible about where you stay.

2. Avoiding (or ignoring) the math

Managing your finances is an important part of the rewards game. At best, not crunching the numbers means you wind up getting less value out of your rewards than you could have. At worst, you could wind up with useless rewards and credit card debt.

First off, you need to know exactly how many rewards you're going to need for every redemption you have planned. It can be frustrating -- and pricey -- to start redeeming rewards only to find you're a few thousand short of where you need to be. While you can often purchase hotel or airline rewards to top off your balances, those options are rarely cheap.

Choosing which rewards cards to use also takes a bit of arithmetic. That's because assigning a value to different types of points and miles depends as much on how you redeem them as the rates at which you can earn them. The card that earns 3x miles per dollar in dining rewards may actually end up giving you a lower return than one that earns 2x points per dollar, if you can use those points in a more valuable redemption.

A little math can go a long way when it comes to things like sign-up bonuses, too. A big welcome bonus can make or break your travel rewards plans, and earning that bonus typically requires meeting a spending requirement. You need to do the math before you even apply for a new card to ensure you can earn the bonus without making purchases you can't afford to repay.

3. Making hasty rewards decisions

This mistake ties into the other two, as it occurs most often when you start collecting cards or transferring rewards before you finish planning your trip and crunching the numbers. You may go into the accrual process with only half a plan -- and wind up with a pile of rewards you don't even use in the end.

You can minimize some of the potential for mistakes here by selecting cards with flexible rewards. Transferable currency programs with a wide range of travel partners make it more likely you can put your rewards to good use. But it may be hard to put together a complete travel rewards trip without using a co-branded airline or hotel credit card.

Before you start applying for new rewards cards, have your plan in place. Know how you're going to use each type of rewards you'll collect -- perhaps with a few contingencies. And never transfer credit card rewards until you're ready to use them for a specific redemption. That keeps you from transferring rewards to one brand when you end up choosing another down the line.

All's well that redeems well

Any time you plan a big rewards trip, there's always room for error. But hopefully these tips help you avoid some common mistakes that could lead to wasted rewards and missed opportunities.