Redeeming rewards points
Redeeming rewards points
They're your rewards points. You've earned them. So now you can redeem them for a free ticket to Hawaii, right? Wrong.

American Express charges $0.0006 per point for domestic frequent flier point redemptions, with a maximum fee of $99. The charge offsets the federal excise tax American Express pays when these redemptions are processed, the credit card issuer said.

At Wells Fargo, you have to pay a $24 fee for each airline ticket issued through the bank's rewards vendor.

"That just defeats the whole purpose of the rewards in the first place," said McBride. "When signing up for rewards programs, you need to evaluate all the benefits relevant to the costs, and redemption costs clearly erode the benefits."

But for now, these redemption fees are the exception rather than the rule, so you can still find banks that won't charge you anything to cash in your points, said McBride.


Last updated June 16 2011: 10:54 AM ET
Join the Conversation

From avoidable ATM fees to expensive coffee and impulse deal-buying, here are 10 ways you're wasting your money. More

From constantly overdrafting your account to hopping from card to card to collect rewards, these are some behaviors that may attract your bank's attention. More

Find Homes for sale
  • Property Type
  • Find a home in:
    New York | Atlanta | Chicago | Los Angeles
    Washington D.C | Houston | Philadelphia | More options
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.