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Credit card points — those magical little rewards that have the power to whisk you away to dream vacations, score first-class upgrades, or even cover your grocery bill. But despite their potential, people often make critical errors when it comes to using them.

If you’re not careful, your hard-earned points might end up wasted on low-value redemptions or (gasp!) sitting unused for years. Here are some of the most common mistakes people make with their credit card points — and how to avoid them.

1. Redeeming points for gift cards or merchandise

Picture this: You’ve racked up a solid 50,000 points, and you’re feeling rich. You head to your credit card’s rewards portal, and what catches your eye? A $100 gift card to your favorite store! Seems like a great deal, right? Wrong.

This is the classic rookie mistake. Gift cards and merchandise offer some of the worst value per point. If you cash in your points for a gift card, you’re probably getting around $0.002 to $0.01 per point.

Compare that to redeeming for travel, where you could easily get $0.029 per point (or even more with strategic redemptions), and you’ll realize just how much value you’re leaving on the table. Your points deserve better.

The fix: Focus on redeeming points for travel. If you’re not a jet-setter, at least consider using points for statement credits or paying off part of your balance, which tends to give you slightly better value.

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2. Ignoring transfer partners

If you’re simply booking flights through your credit card’s travel portal, you’re missing out on one of the most lucrative ways to use your points: transferring them to airline or hotel loyalty programs. When you transfer your points to partners, you open the door to elite-level redemptions, including business and first-class tickets that can be worth thousands of dollars for a fraction of the points you’d spend directly with your card.

Here’s the thing: Not all points are created equal. If you transfer to the right airline, the same 60,000 points you use to book a boring coach seat through your card’s portal might get you a lie-flat seat in business class. It’s like trading a packet of ramen for a five-course meal — you just have to know where to spend your currency.

The fix: Learn your card’s transfer partners, find out which airlines or hotels offer the best value, and start moving those points around! A little research goes a long way here, and some online tools and communities specialize in figuring out the best redemptions. You can thank me from your business class seat.

3. Forgetting about bonus categories

You’re out to dinner with friends, and someone suggests you split the bill. So, naturally, you whip out your favorite card — only to realize later you could’ve earned double (or even triple) the points by using a different card that gives extra rewards for dining.

This happens all the time. Credit cards often come with bonus categories that can earn you 2x, 3x, or even 5x points per dollar on certain purchases like dining, travel, or groceries. But if you’re not paying attention, you’ll miss out on these bonuses and essentially leave free points behind.

The fix: Take five minutes to familiarize yourself with your card’s bonus categories. Some cards rotate their categories every quarter, while others keep them the same year-round. Either way, knowing where you can maximize points will make a huge difference in the long run. You can even set reminders or use apps to track which card to use for what so you never miss a multiplier again.

Ultimately, credit card points are a powerful tool, but they can also be a minefield of missed opportunities and lost value. Avoid these common mistakes, and you’ll be booking that luxury vacation in no time — without breaking a sweat.

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