Home > Credit Cards > 4 Credit Card Rewards Nightmares

Comments 0 Comments
Advertiser Disclosure


Rewards travel enthusiasts love to use credit cards to earn points and miles that they redeem for award travel. Others appreciate cash-back credit cards that amount to a discount on their purchases.

But not everyone is happy with their rewards credit cards. Cardholders can lose their hard-earned rewards in a variety of ways, or they might simply feel like they have been unable to redeem their points and miles for what was promised.

Here are four credit card rewards nightmares, and how you can keep them from happening to you.

1. The Missing Sign-Up Bonus 

Many people apply for a rewards credit card with the hopes of earning tens of thousands of points or miles, yet their promised rewards often fail to materialize. In most cases, cardholders fail to comply with the terms of these offers, which typically require making a minimum amount of purchases within a specified period of time. In other cases, applicants can mistakenly have the wrong “offer code” applied to their account, so the bank fails to grant the bonus, even when the terms are met.

How to keep this from happening to you: Not only should you closely read the terms of each offer, but you should save a copy of it until you receive your bonus. And don’t forget, the clock starts ticking on these offers when the application is approved, not when the card is mailed, received, activated or first used.

2. Not Getting the Reward Flights You Want 

Airlines very generously offer frequent-flier miles to their credit card holders, but it has become increasingly to get award seats at the lowest mileage levels. As a result, credit card users feel ripped off when their miles aren’t sufficient to get to their destination.

How to keep this from happening to you: Cardholders really need to research these programs thoroughly before committing to them. Read online reviews and try to make sample bookings to a few destinations, and you will quickly realize that they aren’t regularly offering four award seats in first class to Hawaii at the lowest levels published on their award chart. Also, try earning rewards in a flexible program such as Chase Ultimate Rewards or American Express Membership rewards. These programs allow you to transfer points to miles with several different airlines, depending on which is offering you the award seats you need. Cardholders can also try to use one of the several award booking services, or just earn cash back and use it for their travel instead.

3. You Lost Rewards After Closing a Card

Rewards credit cardholders generally forfeit their points when they cancel their accounts.

How to keep this from happening to you: First, understand the terms and conditions of your credit card rewards program, to see how you can hang onto your rewards if you need to cancel an account. For example, if you are canceling your account to avoid paying the annual fee, many programs allow you to keep your rewards by switching to a similar card with no annual fee. And if the reward program is with an airline or hotel chain, you almost always get to keep your reward points and miles, even if you cancel your credit card account with their banking partner.

4. Overspending to Earn Rewards

This might be the biggest nightmare of them all, as even 5% cash back is a waste of 95% when you make an unnecessary purchase.

How to keep this from happening to you: You should not be thinking about rewards when you use your credit card to make a purchase, only about getting the best deal possible for your money. To help get your mind off rewards, log into your account frequently to see how much you are spending, and what you are purchasing. And if you are unable to pay off your statement balance in full each month, then its time to retire your rewards card and get a low-interest card instead.

Credit card debt can not only be very costly and negate your rewards, it can wreck your credit scores. You can see how your credit card usage is affecting your credit scores for free on Credit.com.

More on Credit Cards:

Image: iStock

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Credit.com receives compensation for the financial products and services advertised on this site if our users apply for and sign up for any of them.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team