Reward redemption and use of card benefits are on an incline, according to 2015 numbers from J.D. Power. More than half (53 percent) of cardholders redeemed rewards in the past 6 months, compared with 49 percent in 2014. What’s more, 67 percent of customers used at least one of their card’s benefits in the past year, compared to 57 percent in 2014.
Even so, certain reward tactics and card benefits often go unused.
“Many consumers aren’t aware of some of their credit card perks, how to use them or that they even exist,” says Ariana Arghandewal, author of PointChaser.
To prevent you from leaving value on the table, we asked rewards bloggers and experts what they consider to be the most underutilized rewards card strategies.
1. Combining cards
Rewards newcomers may perform exhaustive research in an attempt to find a single card that fills all their rewards needs. However, some cards shine brightest when paired with another. Take the Chase Freedom, for example.
“Chase Freedom is marketed a cash back card, but it actually earns Ultimate Rewards points,” says Scott Grimmer, founder of MileValue.com. “Chase wants you to redeem those points for 1 cent each, but if you have a Chase Sapphire Preferred or Ink Plus, you can transfer Freedom’s Ultimate Rewards to those cards’ Ultimate Rewards accounts.”
Once you’ve transferred those points to the partner card, they become much more powerful, thanks to the Sapphire’s and Ink Plus’s airline and hotel transfer partners. Instead of cash, you can get free flights and hotel stays.
“Transferring to airline miles lets you take advantage of underpriced awards like 40,000 United miles one way in first class from Australia to Southeast Asia or 4,500 British Airways miles one way from New York to Charlotte,” Grimmer says. “Instead of each point being worth 1 cent, you can get outsized value with a little research.”
2. Transferring points
Speaking of transferring points to partner travel programs, that’s another underutilized perk, experts say. In addition to the Chase Cards mentioned above, several other cards offer transfer options, including Citi’s ThankYou Premier and Prestige cards, the Starwood Preferred Guest card from American Express (a CreditCardForum advertising partner) and the cards in AmEx’s Membership Rewards program.
Cardholders may not be aware of their card’s transfer program or may be suspicious that they’ll lose value in the transfer. However, strategically transferring points into a card’s partner frequent flier and hotel programs can result in greater value than redeeming for cash or using points to book through a card’s travel portal.
“Consumers would be much better advised to transfer those points to a frequent flier program and book from there, where they can receive 5 cents per point fairly easily, and up to 10 cents if really savvy about it,” says Ryan Lile, founder of Frequent Flyer Academy.
Many cardholders make the mistake of redeeming points through their card’s travel portal before looking at their transfer options, says Tiffany Funk of PointsPros and its affiliated blog OneMileAtATime.
“We have clients contact us all the time saying they’d looked at their credit card travel portal, and were being quoted a million points per person for business class tickets to Asia,” Funk says. “They’re shocked when we can offer similar flights for say, 150,000 points each, and that’s just from leveraging the transfer partners.”
Transferring points has its own risks, so calculate the value of your points based on the cash price of the ticket (just follow these instructions) before making the transfer – and compare that value to your other redemption options.
“It’s important to understand exactly what your redemption options are in order to make the best use of your points,” Lile says.
3. Tapping the bonus categories
For rewards aficionados, this is second nature. But many consumers don’t put much thought into which card they use to pay for a purchase.
“Many cards offer bonus points for spending in certain categories, and consumers don’t always take advantage of those,” Funk says.
Sometimes, maximizing your card’s rewards is as simple as matching the co-branded logo to the purchase.
“Some cards, especially ‘official’ co-branded airline or hotel program cards, offer bonus miles or points for spending with the sponsor of the card, such as using the United Explorer card to pay for United tickets,” Lile says.
Other times, you’ll need to re-read your card’s terms to flex its bonus categories – and keep track of rotating categories. But that effort can be worth it to earn, for example, 5 percent back.
4. Actually using the perks
We won’t blame you for not reading all your card’s fine print – but within it lie potentially valuable benefits: rental car insurance, purchase protection, lost luggage coverage, emergency assistance, extended warranty coverage and more. Your card’s benefits can easily offset your card’s annual fee, Funk says, “but only if you take advantage.”
Arghandewal recommends cardholders read the fine print or call their issuers to check up on their cards’ travel protections.
“This way, the next time they’re at a car rental kiosk, they can save a significant amount of cash on collision damage waiver without giving up peace of mind,” she says. “The same goes for any travel emergencies. Charging airfare and hotel bookings to the right credit card means not incurring huge losses when travel plans are cancelled.”
5. Cashing in on freebies
Cardholders may get drawn to a card for the freebies it advertises (such as free hotel nights and statement credits for travel expenses) – and then fail to take full advantage and let these benefits lapse.
Free hotel nights can be a particularly effective way to cancel out the annual fee, says Caroline Lupini of Point Princess. The IHG Rewards Club Select card, for example, charges a $49 annual fee but provides a free night at an IHG property every cardholder anniversary – including at luxe properties like the InterContinental Bora Bora and Thalasso Spa.
“Most people spend at least one night a year in a hotel, and most hotels cost more than $49 per night,” Lupini says. “There is value to be had right there. And since IHG Hotels are plentiful in most places around the world, there is a good chance that one will fit your travel needs.”
It can be surprisingly easy to underutilize free-night perks. In most cases, free hotel nights offered by credit cards expire a year or less after the date of issue, so make sure you don’t snooze and lose.