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
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