Buzz
If the rising cost of holiday shopping is stressing you out but you still want to give gifts, your credit card rewards can be a valuable resource.
As The Points Guy and others mention, you'll typically get the most value from your rewards when using them for travel-related expenses like flights and hotels, rather than redeeming points for cash or other non-travel purchases. However, if you're looking to reduce the cost of gifts this season and don’t need your rewards for upcoming travel, consider using your points and miles to treat your loved ones.
Consider gifting your points and miles
A great way to make the most of your credit card rewards is to gift them for travel purposes. This typically involves transferring your points to a partner airline or hotel loyalty program (unless you're a Chase Ultimate Rewards member within the same household). Some airlines may charge a transfer fee, but many hotel chains offer free transfers between members.
To avoid fees and transfer limitations, you can offer to book travel for the recipient using your rewards—just be sure to check with them first to confirm they're okay with the plan.
Redeem points for cash or statement credits
Certain rewards programs allow you to redeem points for statement credits or cash rewards, such as a direct deposit or check. This can help cover the cost of gifts you're purchasing or have already bought. However, your mileage may vary: Chase Ultimate Rewards generally provides the best value through its Pay Yourself Back program (1–1.5 cents per point), while American Express Membership Rewards offers only 0.6 cents per point for statement credits.
Use points to shop at selected retailers
Another way to redeem credit card rewards is by using them for merchandise from retailers such as Amazon, Apple, Walmart, Best Buy, or through PayPal. (Airline and hotel points can sometimes also be used for products or media subscriptions.) If you're already planning to shop at these stores, you can use your points at checkout instead of charging the full amount to your card.
The value of your points can differ widely depending on the rewards program and the retailer. For example, Chase Ultimate Rewards offer 1 cent per point at Apple but only 0.8 cents per point at Amazon. With Citi ThankYou Rewards, there may be exclusions or minimum purchase requirements.
Redeem points for gift cards
Many rewards programs offer a variety of gift cards for purchase with points. You can give these gift cards as presents or use them to buy gifts at stores that don’t accept points for direct purchases. Be sure to check the fine print, as delivery options may range from physical cards mailed to your address to e-cards.
As before, the value of your points depends on the rewards program. Not surprisingly, Chase Ultimate Rewards typically offer the highest redemption value and the largest variety of options, while airline and hotel points provide the lowest value when redeemed for gift cards. American Express Membership Rewards lets you purchase Amex gift cards (not for specific merchants), but at a rate of only 0.5 cents per point.
