5 Tips for Collecting Valuable Reward Points — and Spending Them

What's Hot

2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

Each year, consumers leave billions of dollars worth of reward points unspent. Use this strategy to make sure yours go to good use.

My husband and I recently flew first-class on a major airline from Washington, D.C., to Hawaii for just a few hundred dollars.

Nope, we don’t know anyone who works for an airline. We just collected and redeemed reward points we accrued by using the airline’s credit card.

What is remarkable is that most of us believe it makes financial sense to pay for expensive travel with loyalty points — 58 percent of us, according to a recent survey conducted by Harris Poll for the American Institute of CPAs (AICPA) — but far fewer of us actually manage to do it. The poll found that only 15 percent of respondents used reward points to pay for all or part of their travel. And almost as many people — 14 percent — took a trip that resulted in a credit card balance.

It’s crazy: More than $16 billion worth of reward points and miles go unredeemed each year, according to Colloquy, a research publisher specializing in loyalty and business practice analysis.

The reason is that most of us lack a strategy. But you can change that by following some simple tips for gathering, tracking and redeeming loyalty points:

1. Collect them wisely

First, remember that you shouldn’t spend more on credit cards than you can pay off. It’s seldom a good idea to run up a credit or debit card in the hopes of accruing enough points for a free airline trip, hotel stay or other big-ticket reward.

“When chasing after elite status with hotels and airlines, it’s important to not lose sight of the fact that miles and points often have a dollar value associated with them,” Gregory Anton, chairman of the AICPA’s National CPA Financial Literacy Commission said in a statement. “Spending extra money in hopes of earning free nights and flights has the very real potential to leave Americans feeling like they’ve been travel hacked when their credit card payments are due.”

2. Choose the card that fits your needs

My husband and I carefully chose a credit card that would reward us with one airline point for each dollar spent — on an airline that has frequent flights from Washington, D.C., to the main destinations we visit. If airline rewards aren’t something you are sure you’ll need, you may want to look for a card that allows you to transfer points among companies such as airlines, hotels, car rental firms and elsewhere, recommends the AICPA. Frequent foreign travelers may benefit from a credit card that waives foreign transaction fees. Basically, look carefully at benefits offered by various cards, and apply for one that aligns with your needs.

One great place to start shopping for a card is here, in our Solutions Center.

3. Choose a card with a sign-up bonus

You don’t want to apply for too much credit because it could negatively impact your credit score. So look for a card that gives you a bonus — perhaps a significant amount of airline miles or a waived annual fee, recommends the AICPA. Other bonuses might include significant reward points for one purchase. Remember, you want to earn rewards without overspending.

4. Track your points

Mim King, a money manager from St. Paul, Minnesota, recommends you track your point balances and expiration dates on a spreadsheet.

You could also use a free tracking system

AwardWallet.com is a free service that allows members to track their loyalty programs — including credit card points, frequent flier rewards and hotel rewards. AwardWallet — just one such service out there — claims to cover 661 programs. If they don’t cover some of yours, King suggests tracking the outliers yourself. But don’t leave it to chance. Consider that most households have 29 reward memberships but use less than half of them.

5. Use technology to meet a goal

Have a specific destination in mind? London, Paris, San Francisco, Marrakesh? Consider RewardExpert.com, an online service dedicated to helping you “craft a strategy” using rewards and points to “get you where you want to go sooner than you think.” The program does everything from guide users to rewards programs that best suit their goals to show them how to combine points from various programs. It also determines how long it will take to meet your goal.

What’s your way of accumulating and using loyalty points? Share with us in comments below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: 8 Ways to Get Your FICO Score for Free

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,001 more deals!