10/24/2013 02:06 EDT | Updated 10/24/2013 06:18 EDT

Trips Using Travel Rewards: The Real Cost Of A 'Free' Trip Paid By Points (PHOTOS)

Nikki Gill

To travel on points often means you're on a "free" getaway. Only, that's not really the case.

These points -- and trips -- are typically the product of years of credit card spending and the slow accumulation of points until it's finally time to reward yourself.

A recent survey conducted by Capital One Canada discovered that 41 per cent of Canadians have at least one travel rewards card, and 68 per cent of those surveyed said that cashing in their points is a frustrating experience due to a lack of flights and hidden fees, among other things.

But credit card companies and banks are listening and changes have arrived, with every added perk a step to gain a competitive advantage in order to get your business. Gone are the days of blackout periods for flights and limited airlines.

Aeroplan, for example, partnered with 27 additional airlines aside from Air Canada. They’ve also expanded their partnership with CIBC to include TD and American Express to expand their reach, and developed a new recognition program for top accumulating members that will take effect in January 2014.

On the other hand, RBC's Avion program boasts that they offer no airline or flight restrictions and an easy-to-understand point system where every one dollar spent is equivalent to one point earned.

The Scotiabank American Express suite of cards focus on earning points quickly -- the most important factor for 42 per cent of Canadians when choosing a travel rewards credit card, according to their own internal survey. Card members here earn up to four points for every dollar spent.

But for the average person, how beneficial are travel reward points?

Well, just ask David Phillips, a civil engineer who teaches at UC Davis in Davis, California.

Back in 1999, Phillips decided to maximize an Air Miles promotion where he could receive 1,000 miles for buying ten Healthy Choice frozen entrees, Gizmodo reports. In his quest for frozen entrees, he came across a more efficient promo: 25-cent pudding cups each worth 100 Air Miles

Phillips spent $3,000 on chocolate pudding, giving him 1,200,000 miles. Now, thanks to his travelling frequency, Phillips is now constantly earning miles at a rate faster than he can use them and will travel solely on points for the rest of his life.

Granted, Phillips' case is an unique example of when travel rewards meets extreme couponing. But for those of us who don’t have Phillips' persistence and accumulate travel rewards the old-fashion way, your points are good for more than just flights if you're looking for a way to cash in.

If a round-trip isn't in the books for the foreseeable future, those same points could cover a hotel stay or even an excursion while on vacation. Let's take a two-day getaway in New York City paid entirely on Aeroplan points as an example on what your travel rewards points can really get you.

The Real Cost Of A Two-Day Escape To NYC

The Real Cost Of A Two-Day Escape To NYC

Nikki Gill is a freelance journalist with the Huffington Post Canada. Her accommodations and travel expenses were covered by Aimia, Inc.

Like this article? Follow us on Twitter