One of the easiest travel hacks out there is using a travel rewards credit card. What makes them so appealing are the generous signup bonuses and the ability to earn additional points on your daily spending. Those points can eventually be redeemed for free or discounted travel. Sounds simple enough right?

It should be, but there are mistakes you can make with your travel rewards credit card. Every card has specific rules to get your rewards and different benefits that you’re entitled to. You need to understand exactly what you’re entitled to so you can maximize your rewards. If you don’t you might end up spending more money than you should. The following are mistakes to avoid with your travel rewards credit cards.

Not signing up for a travel rewards credit card

The biggest mistake when it comes to travel rewards credit cards is not having a travel rewards credit card. Some frequent travellers don’t like signing up for multiple credit cards because they’re worried about how it affects their credit score. It’s true your credit score will take a small hit, but it’ll go back up after a few months as long as you’ve paid your bills on time and in full.

Even if you’re happy with your current credit card, it might make sense to get a travel rewards credit card. The obvious reason is so you can start earning travel rewards, but many of these cards come with additional benefits such as insurance, lounge access, and price protection which may interest you. Here’s a post on some of my favourite travel rewards credit cards.

Missing your signup bonus

To get that massive signup bonus, most travel rewards credit cards require you to spend a certain amount in a set period of time. For example, it could be $1,500 in the first 90 days, but if you’ve applied for a high-end card, it could be $3,000 – $5,000 in 90 days; that’s a lot of spending!

The general idea is to apply for a new credit card if you know you have a major expense coming up. It doesn’t matter what that expense may be, you just need to help boost your spending to get your rewards. There are ways to manufacture spending, but those tricks are usually not great for the casual credit card user. If you’re short on your minimum spend, consider purchasing gift cards just to get over the required threshold.

Carrying a balance

Let’s be clear, if you’re carrying a balance just to earn travel rewards, you’re probably spending more than you’re getting. Unless you enjoy paying 19.99% (or more) in interest, it never makes sense to carry a balance on your credit cards. Honestly, this is the biggest mistake you can make with your credit card.

If you constantly find yourself carrying a balance on your cards, you need to make paying down your debts a priority. The easiest way to do that is to focus on your highest interest debt first (known as the debt avalanche method). Alternatively, you can start with the smallest amount you owe and then work your way towards largest debts (the debt snowball method).

Not taking advantage of multipliers

Every credit card tends to have ways you can earn additional points depending on where you do your spending. It may be for certain categories such as gas and groceries (this usually applies to cash back cards), but quite often you can earn extra points when shopping at certain merchants. You want to get familiar with your credit card/travel rewards program and find out how you can earn extra points.

Sometimes the multipliers come from redemptions. E.g. Certain cards will offer you more points (or require fewer points) when you book your travel plans directly with them or one of their partners. You might be allowed to claim any type of travel, but again, find out what’s the best value for you.

Avoiding annual fees

For some people, annual fees are a deal breaker. They refuse to pay an annual fee just to earn points. This is good in theory, but quite often the benefits you get (including the signup bonus) are worth much more than the annual fee. Don’t forget that many credit cards offer the first year free, so you may not have to pay anything at all.

When your annual fee does roll around, take a look at your spending and determine if it makes sense to pay the fee to keep the card. If it doesn’t, cancel the card before that fee is due.

Not using your additional benefits

Almost every travel rewards credit card comes with extra benefits, the most common being travel insurance. If you have a premium card (has an annual fee), the odds are you’ll have a comprehensive insurance package included. The key thing to remember is that you usually have to charge the full amount of your airfare, hotel, and car rentals to your card to qualify for the insurance. Not sure what travel insurance includes? Here’s a guide that breaks down everything you need to know.

Other benefits may include free checked baggage, hotel status, lounge access, concierge service, price protection, and much more. All of these services normally cost extra, so if they’re included, don’t pay for them. You always need to read the fine print to find out what you’re entitled to.

Collecting points that you won’t use

There’s no point in collecting a ton of points if you don’t plan on using them. Seriously, why would you collect travel rewards points if you don’t like to travel? You’re better off using a cash back card. You also want to think about the rewards program that your credit card is associated with. Instead of sticking to a single airlines rewards program, maybe it makes more sense for you to join a program that gives you more flexibility.

Every travel rewards program is different so you’ll need to do some research to figure out which one is best for you. Generally speaking, I find that hotel programs to be very lucrative since there tends to be more valuable, but many airline programs are great too if used effectively.

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