NEW YORK (LowCards.com) -- As the costs of flying continue to climb, buying airline tickets with reward points can save a lot of money.
But there are many credit cards that offer airline rewards, and it can be confusing to find the right one. In addition, even if you have the right card and earn enough miles, getting the free flight you want is not easy.
Limited options around free flights is one of the frustrations of generating airline miles with your credit card, whether it is a generic travel credit card, such as a Miles by Discover (DFS) or Capital One (COF) Venture or an airline-sponsored credit card such as the Continental OnePass Plus. In the past five years, the number of Americans who use cards that accumulate points for merchandise and/or airline tickets has increased 23%, according to a study by Vertis.
"Everybody who has a frequent-flier credit card is dealing with more and more people chasing fewer and fewer seats. As a result, redeeming your miles through an airline-sponsored credit card is becoming more difficult because you are captive to only one airline," says David Robertson, publisher of the Nilson Report. "With generic travel reward cards, you have a tiny bit more leeway because you are not tied to one particular airline."
- Be aware of expiration dates. You spend money and time earning points, but they may not be yours forever. Read the fine print.
- Pay your credit card bill on time every month. If you have a late payment, the bank or credit card issuer can withhold the miles you earned during that billing period. If you want them back, you will have to pay a steep reinstatement fee.
- You may have to pay a fee to redeem your points for tickets. Wells Fargo (WFC) charges a $24 airline ticket redemption fee. Delta (DAL) recently eliminated the redemption fee for Skymiles frequent fliers. The fee ranged from $75 to $150.
- Don't waste your points on a cheap flight. Points are worth about 1.2 cents, and it typically costs 25,000 points for a round-trip domestic flight, so a round-trip would cost $300. If a flight costs less than $300, it is cheaper to pay in cash and save your points for a flight that costs more than $300.