Much like showing up on time for an interview, the sheer act of earning points is more than half the battle in free travel. The other half of the battle is using them and using them wisely. Since it always seems to take so much time to earn enough to do anything exciting, you might as well maximize them and get it right. Here's the number one thing people do wrong with their credit card rewards points...

In General, The Best Way To Use Credit Card Points Is To Transfer Them...

At the best of times, points are about arbitrage opportunities. You want to use the least points for the best or most expensive experience possible. When you use your points through American Express, Chase, Citi, Bank of America, Barclaycard or whoever else offers points, you receive a fixed value per point. The value you get is directly tied to the cost of the ticket or hotel night using cash. There can be instances where this is decent value, but in general the number one thing people do wrong is NOT transfer their points to an airline or hotel program where arbitrage opportunities exist. We are seeing credit card companies offer a better cent per point value now, sometimes as high as 1.5 cents per point ie: 10,000 points covers $150, but in general you can do better elsewhere...

So Why Transfer Them To An Airline Or Hotel?

By transferring to an airline or hotel you have the opportunity to move away from a certain moderate to low fixed value for your points and get much more value. Most airlines and hotels calculate how many points you'll need for a specific flight based on charts. These charts do not factor in actual price. For example, British Airways will always charge 68,000 miles for a one way off peak first class ticket between New York and London. It doesn't matter if the ticket would cost $5,000 or $20,000. If you used your points within your credit card program, you'd be facing using anywhere between 300,000 to 1,000,000 points for a sum of that sort...

Which Credit Card Programs Allow You To Transfer Points?

If you have American Express Rewards, Citi Thank You or Chase Ultimate Rewards points you have points which can be transferred to many airline or hotel programs. Each program has an individual list of travel partners, which are roughly 15-22 partners per credit card program. The number one tip to take away is to learn how many points each airline or hotel would charge for a trip you'd like to take. Next, just look to see if that airline or hotel is a transfer partner. If it is, you'll just need to find an available seat through the airline to use points, and then transfer your credit card points over.  It's pretty easy and you'll truly maximize your points...