Credit card companies thrive on people not redeeming their rewards -- and a surprising number of people never do

Michael Steele/Getty ImagesNot using your credit card rewards is an embarrassing money mistake.

Using cash or debit cards to pay when you could be earning rewards points with a credit card means throwing money away — money that adds up over the long haul.

Some people are so good at the credit card game they’re able to finance around-the-globe travels almost entirely on points alone.

Of course, you have to actually use the points for them to do you any good. That may seem obvious, but a surprising number of people never redeem their credit card rewards, according to a new survey from

While 38% of people regularly redeem for freebies like cash back and airline tickets, the report found that 31% of cardholders have never redeemed rewards at all — not once.

Credit card companies count on this. It’s part of the reason they can offer such lush sign-up bonuses and still turn a profit.

Elite travel cards like the Chase Sapphire Reserve or the American Express Platinum offer some of the industry’s most generous sign-up bonuses, and their profitability projections depend on cardholders not taking full advantage of the perks. Recent research by UBS suggests these companies expect about 20% of rewards to go unused.

So, why do so many people let their rewards rot away like that moldy piece of God-knows-what in the back of the fridge?

Many cardholders just don’t know how many points they have, according to credit card analyst Robin Saks Frankel. Additionally, 32 million cardholders haven’t changed their primary card in over a decade, according to research from, and so the rewards might not match their lifestyle anymore.

And some may just be holding on to them for a rainy day — which Saks Frankel says isn’t necessarily a wise move, either.

“Credit card rewards don’t usually gain value over time,” Saks Frankel said. “In fact, they’re more likely to lose value as companies require more points or miles for the same perks. Your best move is to cash them in regularly.”

Most card companies make your rewards easily accessible and redeemable online, so keeping tabs on your rewards shouldn’t be a tall order. There are even websites dedicated to tracking rewards and helping you book travel with them, making it all the easier to cash in and avoid letting them go to waste.

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