The $1,500 Mistake I Made When Booking Reward Travel

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KEY POINTS

  • Some carriers impose extra fees on award tickets that can turn "free" travel into a big expense.
  • Adding a short, often inexpensive, leg on your journey can sometimes save you a lot of money.
  • Transferable rewards offer the best flexibility to deal with last-minute hiccups.

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I am a self-identified rewards addict. I consider maximizing my credit card rewards to be an actual hobby. And a good sign-up bonus can make me drool like Pavlov's hounds during a round of "Jingle Bells."

For me, rewards-chasing is a hobby well worth my time and effort. Not only is it fun -- who doesn't love a good credit card spreadsheet? -- but it's also been quite rewarding (pun intended). Over the last ten years, I estimate I've enjoyed close to five figures in free airfare and hotel stays, as well as a host of statement credits and upgrades.

But not every redemption has been a headline-worthy score. I've made my fair share of low-value mistakes and subpar redemptions. In fact, one of the biggest mistakes I made in the early days of traveling on points actually wound up costing me a whopping $1,500 in fees.

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The dreaded BA surcharge

One of the first -- and largest -- rewards trips I ever planned was a weeks-long trip to the UK for myself and two family members. Thanks to points and miles, we planned to go all-out, including flying business class both ways.

Because our local airport had limited airlines, I chose American Airlines for our flights. For UK routes, this meant flying across the pond on British Airways (they're part of the same airline alliance). Little did I know at the time, this would come back to bite me later.

You see, there's this fun little quirk about BA flights between the U.S. and the UK: fuel surcharges. Every BA award flight to the UK from a U.S. airport comes with these lovely little carrier-imposed fees on top of the points you need to redeem. The actual charge varies by flight and class; for our business class flights at the time, it was $500 a pop -- one way.

Unfortunately, I didn't realize this particular problem until I'd already amassed a good deal of miles in my American Airlines account -- miles that I couldn't transfer anywhere else. To keep my plans on track, I ended up forking over the fees to the tune of about $1,500 to get the three of us to the UK. (Getting back had its own issues, but that's another story.)

Going the extra mile

In hindsight, I would have been far better served going a little bit out of my way to save that extra $1,500 (well, most of it). You see, we could have flown into nearby Dublin, Ireland for the same amount of miles and zero surcharges. Then, our UK destination would have been just an hour -- and $150 -- away.

We could have even turned this apparent inconvenience into a perk. By adding a couple days onto our journey, we could have done a little sight-seeing in Dublin -- or anywhere else in Europe that caught our fancy -- before continuing on to our original destination. I even had spare points sitting around that could have potentially paid for the extra lodging required.

Plan twice, transfer once

Beyond the lesson to avoid British Airways for UK award travel, perhaps the most important thing I learned from this whole debacle was to stick with transferable travel rewards currencies -- and to only transfer them at the last minute.

If I'd had a giant stash of Amex Membership Rewards points, for instance, I could have transferred them to any number of other airlines to work around the fuel surcharge issue. Instead, I was so focused on earning American Airlines miles that I wound up with few options for that leg of our journey.

Additionally, it's a good idea to keep your points in place until you're absolutely certain of your plans and you're on the verge of making a booking. Most transferable points can be transferred almost instantly. At most, some may take 48 to 72 hours to go through -- but that's rare.

Storing your points in their most versatile form for as long as possible keeps your options open in case something comes up. And, as any rewards traveler soon learns, something always comes up.

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