This Is the Problem With Travel Rewards That No One Talks About

There is no shortage of articles about earning credit card rewards -- some of which are actually useful. With a bit of planning and some good advice, you really can earn hundreds of thousands of credit card points in no time at all.

Now what?

You see, there's a dark side to credit card points that doesn't get nearly enough headline attention: redeeming them. Since all the points in the world aren't worth a shilling if you can't use them, this is a big problem.

The value/headache scale

In the rewards space, there's a bit of a value versus headache scale of redemptions.

At one end, you have low-value redemptions that are remarkably easy. This includes things like cash back or using points at checkout with a retailer. These options require almost no work at all to use, but you'll only earn between $0.006 per point to $0.01 per point, depending on the program.

At the other end, you have the high-value redemptions that can be worth three or four times as much. Unfortunately, these tend to require a process reminiscent of the Labors of Hercules.

That's right, I'm talking about travel redemptions.

Facing the travel redemption gauntlet

A few travel rewards cards let you redeem points for statement credit to cover travel-related card purchases. This is akin to redeeming for cash back, and it has the ease and low per-point value associated with that.

Next, there are the travel portals. Pretty much all the major points programs have some sort of travel portal where you can use your rewards points to book flights, hotels, and even rental cars.

• American Express Membership Rewards
• Capital One Venture Rewards
• Chase Ultimate Rewards
• Citi ThankYou Rewards

While this tends to give better value than cash back strategies -- some cardholders will get up to $0.015 per point this way -- it's still not going to give you those headline-worthy redemption values. No, for that, you need to transfer your points.

Award space roulette

Long before you actually transfer your card points, you need to figure out the redemption. (Once you transfer your points to an airline or hotel, you can't transfer them back, so you should know how you're going to use them before you start.)

Now you need a lot of research -- and a good deal of luck. 

The hardest part of the whole process is generally finding award availability. Many airlines have a specific number of seats on each flight open to award travel. If those seats are already sold, you're going to need to find a different flight.

Unfortunately, award flights are rarely nice, neat, nonstop options. Instead, be prepared for complicated itineraries with weird layovers in places you'd never normally stop. This can be especially irritating to folks trying to leave (or end) via regional airports instead of major hubs.

Winning the game

It can be frustrating to search and search for award space and continually come up short. Here are a few tips I've used over the years to book my own award travel.

Book early -- or really, really late

Your best bet at finding the right award space is to book as soon as possible -- or at the very last minute. 

Many airlines post their award space about six months out. When you're checking a particular airline, use its calendar to find how far out you can book. Then, look for award space around those dates. Chances are good you'll find more variety than you will on sooner flights.

Conversely, if you are very flexible, you could find some interesting last-minute redemption options on undersold flights. This could be a good option for folks who are open to spontaneous adventures in new places.

Don't be choosy about the airline, or even the airport

In some cases, it's worth the extra work to fly on a specific airline. This is most often the case if you're set on a specific product, such as the notoriously awesome suites you can find flying international first or business class with some airlines.

Outside of that, however, there's not as much benefit to airline loyalty, especially when you're redeeming points (you typically won't earn status points on award flights). And since the major transferable rewards all have multiple airline partners, being flexible here can open up a lot more options.

Similarly, the smaller your local airport, the harder it's going to be to find decent award space (or any at all). If you can travel to a larger airport, you could open up your award availability significantly. (As a bonus, you may even get better lounge access!)

Take advantage of airline partnerships

All of the major airlines are part of larger partnerships -- typically called alliances -- with other airlines. An interesting side effect of these alliances is that you can often use miles from one airline to book flights on partner airlines.

How easy this process is will vary a lot depending on the specific airline and/or alliance. The best ones let you redeem rewards for partner flights online as easily as you'd redeem for their own flights.

Others are not so convenient. You may need to check availability online and then call on the phone to complete your booking. Or, worse, you may have to do the entire thing over the phone. While annoying, this could be worthwhile for those big aspirational redemptions.

Determination pays off

While this may all seem like a lot of work to some, there are plenty of us who find it a fun challenge. Perhaps that's why, though surveys have found that as much as 70% of cardholders have unused rewards, only a small percentage of that -- 13%, according to one survey -- are sitting on unused miles.

In other words, if you get a thrill from scoring an amazing deal, managing credit card points could be a fun hobby. But if just reading this article has been enough to make you anxious, perhaps sticking with cash back cards is best.