9 Overlooked Costs to Consider When Redeeming Travel Rewards

Maximizing your travel budget is easier than ever with travel rewards, enabling you to embark on journeys previously deemed unaffordable and explore destinations further afield. Utilizing airline miles can lead to flights that may otherwise cost thousands, and with enough hotel points, you can enjoy stays in lavish resorts typically outside of your financial reach.

However, much like many opportunities, there are intricacies to consider in the realm of travel rewards. Alongside potential travel-related fees, there are various hidden costs that could significantly impact your finances if overlooked.

If you hold one or more travel credit cards and have accumulated a considerable number of points and miles, it’s essential to be aware of the hidden taxes, fees, and expenses that may arise before embarking on a major trip. Here are the most frequent culprits you should keep in mind.

1. Government-required airline taxes and fees

Redeeming airline miles for a “free flight” might sound fantastic, but remember that you’ll still incur government taxes and fees as you would if you purchased a ticket outright. While the domestic airline taxes are relatively low at $5.60 per person, per leg, international routes can lead to charges totaling several hundred dollars or more when using miles.

To avoid unwelcome surprises, familiarize yourself with the airline taxes and fees and evaluate them before booking your travel. Being informed will help you sidestep unexpected costs and ensure you enjoy your vacation.

2. Fuel surcharges

Be aware that some airlines impose significant fuel surcharges on their international award flights. British Airways is particularly notorious for this, especially on routes passing through London Heathrow. You might think you’re snagging a “free flight” to Europe when, in reality, you may end up facing substantial fees.

Your best option is to shop around among various airline loyalty programs to identify routes with minimal charges. This also underscores the benefit of earning versatile rewards that are transferable to multiple airlines instead of being restricted to just one.

By holding flexible rewards points that can be transferred or utilized through a travel portal, you can compare different flights and award relevance to maximize your benefits.

3. Parking fees

Even when using flexible travel credits or hotel loyalty points for complimentary resort accommodations, you may still need to pay for additional “extras” outside your nightly room rate. Parking fees, particularly mandatory valet charges, are a common issue that travelers encounter.

If you plan to use hotel points or travel rewards for your stay and have a personal or rental vehicle, it’s wise to check in advance whether parking fees apply and what those fees might be.

4. Resort fees

Hilton Honors is known for its policy of waiving resort fees for award stays. Moreover, World of Hyatt Discoverist members and those with higher elite statuses may also enjoy exemptions from these fees.

However, not every hotel program offers this benefit—even for elite members. Before booking a points stay at any resort, verify whether a resort fee is imposed and if you are liable for it.

5. Checked baggage fees

Some airline credit cards provide the advantage of a complimentary first checked bag as a cardholder perk. However, if you lack a co-branded airline credit card, you typically won’t qualify for this benefit even if you’re traveling with miles.

In the absence of such a card, you may need to pay for any checked luggage beyond a carry-on and personal item that fits under your seat. On average, checked bag fees range around $35 within the U.S.

6. Seat selection fees

Remember to consider the costs associated with seat selection, especially if you prefer to pick your seat prior to the flight. While some airlines do allow free seat selection, others—particularly those based outside the U.S.—charge additional fees for seat choices until 24 hours before departure.

Additionally, take caution when redeeming rewards for basic economy fares, as these typically entail extra charges for carry-ons, seat selection, or the possibility of receiving a randomly assigned seat at check-in.

7. Food expenses

Regardless of your destination or the inclusions of your trip, expect to spend money on meals. Even if you’re at an all-inclusive resort booked with points, you’ll still need to dine en route to your destination—and meals at airports can be particularly expensive.

Final takeaway: Plan to budget for meals and snacks during your travels to avoid disappointment later.

8. Airport parking fees

If you’re driving to the airport, you’ll likely incur parking fees either on-site or within the vicinity. While long-term parking might cost around $7 or $8 per day at some locations, covered or valet options can soar to $25 or more daily.

Alternatively, consider taking a taxi or rideshare service to save on parking costs, but keep in mind this involves expenses as well. Have a clear transportation plan to and from the airport for budgetary purposes.

9. Rental car insurance expenses

Lastly, there’s a distinct pleasure in utilizing credit card rewards for rental cars and exploring new destinations. Nonetheless, be aware that you might be required to pay for car rental insurance at the rental service desk, contingent on your travel location.

In destinations where additional insurance is optional, your existing car insurance may suffice in covering potential damages or theft. However, several credit cards offer primary rental car coverage as a free benefit for cardholders.