So What Will You Do With Those 61,000 Reward Points?

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luxury vacation concept. mexico....
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You may not be fully aware of it, but you're probably sitting on your own personal treasure hoard: a stash of airline miles, hotel points or reward points you've earned through your credit cards.

According to statistics compiled by Points.com and its parent Points International (PCOM), a company specializing in helping consumers trade, exchange and redeem reward points, the average American is hoarding more than 61,000 reward points through various programs. Americans have more than 2.65 billion loyalty memberships -- 21.4 per household.

This would be fine if we were spending those points -- but we're not. According to a report by Forrester Research, only 16 percent of us redeem the points that we earn each year. Why do we love reward points? Is there a danger in hoarding them? What should we do with our points as our balances continue to grow?

Why Do We Love Reward Points So Much?

Getting something for free is a big allure of reward points and loyalty programs. I love that my airline-branded credit card allows me to check a bag for free.

Companies view reward programs as marketing by gamification. If businesses can make patronizing them into a game for their customers, they'll be more likely to do what it takes to advance to the next level. And of course, these programs inspire brand loyalty.

I'm a huge fan of Fitbit. I'm always striving for the next badge or level with my fitness goals through the site and its devices. I'm also addicted to checking in to the places that I frequent on Foursquare. It drives me crazy when someone ousts me as the mayor of one of my favorite haunts.

Gamification is going on with reward points themselves. Companies have found that we desperately want to get to the next level of rewards. That's why companies have different colored credit cards and exclusive levels that offer even more freebies to loyal customers -- though usually for a price.

And we are dreamers. We dream that our frequent flyer miles and hotel reward points will go towards some exotic trip. But in actuality, we're more likely to wind up using them for a mundane trips like to flying to cousin Phil's wedding in Des Moines, says Christopher Barnard, president of Points.com.

The Dangers of Not Spending Your Reward Points

It's important to stay abreast of the fine print and ever-changing rules. "Make sure that you are up to speed and current on program communications," says Barnard. "That is an easy way to get more out of your choice of reward points programs."

There is also a danger of spending simply to earn rewards, which what most such programs were designed to encourage. "With credit cards, I always suggest that people should always use caution," says Michael H. Baker, a certified financial planner with Vertex Capital Advisors in Charlotte, N.C. "Many of the rewards can be useful to certain consumers, but you must stay on top of your game and play by the rules. I would only encourage someone to use a rewards card if they can diligently pay off the balance every month."

What You Should Do With the Points You're Sitting On

You should consider saving your points for something special instead of simply squandering them.

"I travel for work and save my miles and hotel points for big family vacations," says Blair Sherwood, a marketing company executive. "Save your points and use them for the highest-value rewards possible on the company's core products like hotel nights and long flights. Last year on vacation, I redeemed hotel points for a room that would have cost $400 a night, but my family and I were able to stay for free, thanks to my reward points."

Reward point programs often have an annual membership fee. Shop around for the best deal with a company that matters to you, and one you do business with on a regular basis. Be loyal to the program as long as it remains low cost -- but not necessarily the lowest cost.

Barnard recommends managing your reward points like any other financial asset. Would you turn down a $4,000 raise? Of course not! You should think of your reward points and the $4,000 international flight you could redeem them for in the same way.

What Kind of Reward Programs Do You Follow?

I'm a huge baseball fan, so I have a credit card that gives me points that I can use to buy tickets to games and that offers significant discounts on team merchandise. You should find a program that works for you. Do you fly a lot? Do you favor one hotel chain? It can pay dividends to be a member of that company's loyalty rewards program, even if the cost is slightly higher than a competitors' offering.

"It pays to focus your efforts on a smaller number of programs," says Barnard. "If you have a certain goal, it is important to concentrate on one rewards program as much as possible and pay attention to their promotions to maximize their reward points."

Loyalty programs are big business. "It's a symbiotic relationship that isn't ignored," says Sherwood. "Companies know that loyalty members are only loyal until they cannot justify paying the premium any longer. Once members determine a loyalty program is no longer of value, they will switch their loyalty to the next company... . It's a very competitive market."

Why do we love reward point loyalty programs so much? Are you hoarding your reward points? What are you saving them for? Is there really a danger in waiting to redeem them?

Hank Coleman is the publisher of the popular personal finance blog Money Q&A, where he answers readers' tough money questions. Follow him on Twitter @MoneyQandA.

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