I love credit card points as much as the next travel hacker. But we need to talk about the elephant in the room with points: as much as we pretend that points have fixed values and can be used in the same way as cash-back, they are only worth as much as you can actually redeem them for!

I feel like I see many people fall into traps with points where they get cards and spend to maximize their point return without thinking about the money they are spending and how valuable their points can be. This breaks down into two major issues: so let’s jump into problems with points and also learn how to avoid them!

Issue #1: Spending more money than normal to get extra points

The first issue is when people increase their spending because of good point redemptions. For instance, say you have the Chase Sapphire Preferred and there is a promotion running for an extra 5x points when you spend at a sports fan store like Fanatics, which sells jerseys and sports memorabilia.

The trap that people fall into here is that they then spend money to buy something at Fanatics (or any promotion store) that they would not have spent otherwise just because there is a good point return.

The reason that this is an issue is that the points you get back will never be worth more than the extra money you spent. If I wasn’t planning on buying a $100 sports jersey, and I did just because of the 5x points promotion, I’m essentially paying $100 for an extra 500 points (i.e., $5 worth of points).

It is EXTREMELY tempting to increase your spending when there is a fun promo or a chance for bonus points, but it is important to remember how much the extra points you get are actually worth: very little! However, this issue goes beyond credit card points, with people often spending money at stores that they wouldn’t have spent just because there is a sale.

The one situation where increasing your spending can be worth it is for hitting a sign-up bonus for a new card (see our best ways to meet credit card SUBs here), as the amount of points you’re getting back is often greater than the amount you’re spending.

Issue #2: Caring more about the number of points than the point’s value

The second issue that people run into is that they don’t consider how they are actually going to use the points they get and instead focus on just getting the most points possible. Let’s take airline points as an example:

Imagine you live in Boston and are a frequent flier out of Boston Logan Airport—certain airlines such as Delta and JetBlue fly extremely frequently to a wide variety of destinations. Therefore, if you are accumulating Delta or JetBlue points, those are extremely valuable (1 to 2+ cents per point)

Now picture you decided to get an Alaska Airlines credit card because of a large sign-on bonus, despite the airline having very few flights out of Boston. Even though the number of points you’re getting back is very high, the spendable value of your points is worth less in your situation since there are so few chances to spend your points efficiently. Therefore, an Alaska Airlines point is worth way less to you (<0.5 cents per point) and so any spend you made to get the points may not be worth it.

So if you were in this situation and had a chance to get either 20,000 Delta points or 40,000 Alaska Airline points, the Delta points would be worth more to you specifically!

Summary

Overall, these two issues are some of the biggest traps that people new to credit cards and seasoned card veterans often fall into. Make sure to keep these in mind as you consider which credit cards and airlines to use! Make sure to also keep other common credit card mistakes in mind and implement our tips to make the most of your card rewards.