9 Hidden Expenses to Plan for When You Redeem Travel Rewards

By Holly Johnson on 1 July 2019 0 comments

Travel rewards make it possible to stretch your travel budget as far as it can go, book trips you couldn't afford otherwise, and journey further from home. It's possible to use airline miles for flights that could easily cost thousands of dollars apiece and with enough hotel points, you can book stays at luxury resorts that would typically be beyond your reach.

Like with most things, however, the devil is in the details when it comes to travel rewards. Not only are there travel-related fees you may need to pay, but there are also hidden travel expenses that can wreck your finances if you aren't aware they exist. 

If you have a travel credit card or two and a big stash of points and miles, it's crucial to know about hidden taxes, fees, and expenses you'll need to plan for before any big trip. Here are the most common offenders to be aware of.

1. Government-mandated airline taxes and fees

Cashing in airline miles for a "free flight" can seem like a dream come true, but don't forget you'll have to pay government-mandated taxes and fees just like you would if you paid cash for your fare. While airline taxes only amount to $5.60 per person, per leg on domestic flights, you can easily be stuck paying a few hundred bucks or even more to redeem miles for certain international routes.

To avoid a nasty surprise, know about airline taxes and fees and price them out before you book your trip. Don't let these fees catch you by surprise, and they won't ruin your vacation.

2. Fuel surcharges

Also note that some airlines tack on huge fuel surcharges on their international award fares. British Airways is famous for doing this on their many routes, but particularly on itineraries that stop at London Heathrow. You may think you're getting ready to score a "free flight" to Europe with British Airways (or another airline that partners with British Airways), when suddenly, you're hit with hundreds of dollars in fees.

There's not much you can do about fuel surcharges, other than shopping around among different airline loyalty programs to find routes with minimal fees. However, this is also an argument for earning flexible rewards that transfer to more than one airline instead of a single airline currency. 

When you have flexible rewards points you can transfer to other airlines or use to book flights with any airline through a travel portal, you can compare several routes and award fares to see how they stack up.

3. Parking fees

Even if you cash in flexible travel credit or hotel loyalty points for a free resort stay, you may be asked to pay for "extras" outside your nightly rate. One popular fee people complain about is parking, and especially compulsory valet parking fees.

If you plan to use hotel points or other travel rewards for a hotel stay and you happen to have your own car or a rental car, make sure to find out ahead of time if parking fees are assessed, and if so, how much they cost.

4. Resort fees

Hilton Honors is notorious for waiving resort fees on award stays. Plus, World of Hyatt Discoverist members (and those with higher elite status) enjoy waived resort fees on award stays. 

However, not all hotel programs waive their resort fees — even for elite members. Before you book a stay with points with any resort, make sure to find out if they charge a resort fee and if you're required to pay it.

5. Checked baggage fees

Some airline credit cards offer a first checked bag free as a cardholder perk. However, you won't necessarily qualify for a free checked bag if you don't have a card that offers this benefit — even if you used miles for your flight.

If you don't have a co-branded airline credit card, in fact, it's likely you'll need to pay for any luggage you bring on your trip outside of a carry-on bag and personal item that fits under the seat in front of you. While checked bag fees vary, they will usually set you back around $35 per bag when you fly within the U.S. 

6. Seat selection fees

Keep seat selection fees in mind — particularly if you want to choose your airplane seat ahead of time. Where some airlines will let you select a seat ahead of time without any charge, others — and particularly airlines based outside the United States — charge extra for seat selection up until 24 hours before your flight departs.

Also be careful if you wind up redeeming rewards for a basic economy fare. Not only will you be asked to pay extra to bring a carry-on bag on the plane with these fares, but you'll have to pay to select a seat, or accept whatever seat is given to you upon check-in.

7. Food spending

No matter where you're going or what's included, you'll probably need to spend some money on food during your trip. Even if you're visiting an all-inclusive resort you've booked with points, you'll need to eat when you're en route to your destination — and your meals may even be at the airport where food is notoriously expensive.

The bottom line: Make sure to budget for some meals and snacks during your journey, or you may regret it later.

8. Airport parking

Driving to the airport? In that case, you'll likely need to pay for airport parking on-site or somewhere in the general area. While long-term airport parking can cost as little as $7 or $8 per day at some airports, covered parking and valet parking can cost $25 per day or a whole lot more.

You can always take a taxi or call an Uber or Lyft for a ride to the airport to save on parking, but once again, there are costs involved. Have a plan to get to and from the airport so you can budget accordingly.

9. Rental car insurance

Finally, there's nothing better than renting a car with credit card rewards and enjoying the open road on somebody else's dime. However, you may be asked — or even required — to pay for pricey rental car insurance at the rental counter depending on your travel destination.

If you're visiting a country where additional insurance is optional, you can usually rely on your own auto insurance to cover you in the event of a wreck, damage, or theft. However, note that some credit cards offer primary rental car coverage for free as a cardholder perk.

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Travel rewards are a great and frugal way to stretch your budget and book cheap or free vacations. However they are not always free, as there are some travel-related fees and expenses you may need to pay. Before you cash in your rewards points and miles, check out these hidden expenses. | #frugalliving #budgeting #personalfinance

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