Monday, January 30, 2023

How To Best Use Credit Card Points

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Pick A Rewards Card That Suits Your Rewards Preferences

Best Ways to Use Credit Card Points for Traveling

Rewards credit cards come in a few flavors: airline cards, hotel cards and general rewards cards. Hotel and airline cards generally earn and redeem points through their respective category purchases. For example, the Delta SkyMiles® Reserve American Express Card only earns Delta SkyMiles on eligible purchases.

These niche rewards cards are great if you value a certain hotel or airline brand and dont mind catering to them specifically. The drawback is youre locked in to redeeming with that brand, with some exceptions.

If you prefer flexibility with how you earn and redeem your credit card points, a general credit card rewards program, such as Chase Ultimate Rewards or American Express Membership Rewards, might offer you a better value. Several of these rewards cards also allow you to transfer your points to other rewards programs an even greater opportunity for value.

Our redemption guides for each loyalty program

How To Redeem Credit Card Points

The point redemption process differs by issuer. But normally you start by logging in to your online account. From there, you should be able to navigate to a rewards area where you can trade your points for various things. Some issuers will even have a separate website dedicated to reward redemption to make things easier on you. And you may be able to redeem your rewards through third-party sites like Amazon or apps like Uber. If youre having trouble with redemption, you can always call your issuers customer service line.

Once you figure out where to go to redeem your rewards, youll need to decide what to spend them on. That depends on both your needs and the redemption value of your points. Lets examine some of the typical options:

  • Travel. Points credit cards that are marketed as travel credit cards will often give you the best value for travel redemption. You can trade your points for airfare, hotel stays, cruises and more. Depending on the card, you might have to use your points immediately when you book , or you might be able to redeem points to wipe purchases off your bill after the fact.
  • Gift cards. Many credit cards will allow you to trade points for gift cards to various retailers. This option often gives less value than others, though.
  • Merchandise. You can sometimes spend points in an online shopping mall to buy products ranging from electronics to kitchenware to clothes.
  • Stay Away From Merchandise

    Merchandise and gift cards offer some of the lowest value for your points on average. You can count on this fact across almost every credit card rewards program available.

    Most point values are worth around 0.3 cents each when redeemed on merchandise, a far cry from the 1 cent or more theyre worth when redeemed on travel options. If you want to convert your points into merchandise purchases, consider a cashback credit card instead.

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    Rbc Rewards Pointstransfer Partners

    I love programs that let you convert points to other loyalty programs since it adds flexibility and value. RBC Rewards has one of the most extensive and valuable list of conversion partners when it comes to Canadas bank travel reward programs. American Express Membership Rewards is better in my opinion, but RBC Rewards isnt far behind.

    Here is the list of programs you can convert RBC Rewards points to:

    • WestJet: 1,000 RBC points = $10 WestJet dollars
    • HBC Rewards: 1,000 RBC points = 2,000 HBC Rewards points

    If you are an Avion cardholder you can also benefit from these conversion options:

    • American Airlines: 10,000 RBC points = 7,000 AAdvantage miles
    • Asia Miles: 10,000 RBC Points = 10,000 Asia Miles
    • British Airways: 10,000 RBC points = 10,000 Avios miles

    Its hard to put an exact value on airline miles since there are so many variables, but generally speaking, their value is around a minimum of 1.5¢ per mile for economy tickets. Often you can get double the value if youre booking in business class.

    Its a good idea to log into RBC Rewards often since they have many redemption promotions throughout the year and these promotions boost your points value. Its been a while, but RBC Rewards had a few conversion bonuses for Westjet, Asia Miles, British Airways Avios miles and American Airlines AAdvantage Miles. That meant you got extra value when you transferred your points to a partner.

    Are Credit Card Points Worth It

    Start using your Empower MasterCard® credit card to earn ...

    8 Minute Read | September 15, 2021

    If you havent noticed, credit card companies are pretty dang smart. They know how to play the game of marketingand from the looks of it, they play it well. From sign-up bonuses, rewards points, cash-back incentives and airline points, they know people love free things.

    But were here to expose their biggest secret: Whatever theyre offering is not actually free. Those credit card points youve been accumulating always come at a price. And that price is whats inside your wallet . . . and maybe your dignity. Thats the genius of it. Credit card companies get you to spend way more than what you would ever spend in cold, hard cash, and then they reward you with a teeny-tiny percentage of what youve padded their pockets with.

    Its time to decide for yourself: Are credit card points worth it?

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    How Many Points Will You Earn On A Purchase

    Calculating the number of credit card points youll earn on a purchase is fairly simple, as long as you know your rewards program and the type of business youre shopping in. You can divide the dollar amount of your purchase by the number points youll earn for that transaction. For example, if your card pays two points for every dollar you spend on travel purchases, youll earn 600 points for a $300 airplane ticket.

    Rewards are categorized based on the type of business youre purchasing from, not necessarily the type of purchases you make. Food purchased from a cafe inside a grocery store, for example, may be considered groceries rather than dining because youre buying from a grocery store. This is important to keep in mind when youre making credit card purchases with a card that rewards additional points for different types of purchases .

    Earning Credit Card Points

    Reward points can be a strong incentive to choose plastic over cash. In fact, 53% of Americans say that earning points and rewards makes them want to use their cards more often, according to an Ipsos poll. In addition, 49% of those polled said they’d consider switching cards if it meant having a chance to earn more rewards.

    Rewards credit cards can offer different structures for earning points. Some use a flat rewards rate with a set number of points earned per dollar spent. Others tier their rewards, with some purchases earning more points per dollar than others.

    Cards can also offer an opportunity to earn additional points through introductory welcome bonuses, anniversary bonuses, and referral bonuses. Earning these points typically hinges on meeting certain conditions. So, for example, you might be able to earn 100,000 bonus points for charging $3,000 in purchases in the first three months.

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    General Purpose Travel Cards

    These cards earn points linked to a specific bank or issuer like Chase or American Express. The points earned are then transferable to a selection of airlines, hotel, car hire and other brands depending on the partnerships of each bank or issuer. If youre loyal to one specific airline or hotel, its worth researching the transfer partners of cards before applying. This gives the ultimate freedom when deciding how youd like to redeem your points, as your points dont already belong to an airline or hotel brand.

    Dont Try To Earn The Spending Bonus On More Than One Credit Card At A Time

    How to Start Using Credit Card Points for Free Travel

    Also, keep in mind that many credit card issuers only allow you to earn one spending bonus every two to four years. Or, with some credit card issuers, you may only be able to earn one spending bonus in the lifetime of that credit card issuer. Read the fine print to find out whether you can earn another spending bonus from a credit card issuer and the time period you may have to wait between earning bonuses.

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    Who Has The Best Non

    Points can often be spent at a penny apiece towards travel, and perhaps at a lower rate against options like gift cards or statement credits. However one program stands apart in the non-transfer redemption category and that is Chase.

    Chase Sapphire Reserve® cardholders can use their points at 1.5 cents apiece through the banks travel portal, or against charges on their account in rotating Pay Yourself Back categories.

    Meanwhile holders of other cards in the Ultimate Rewards family that transfer points, like Chase Sapphire Preferred® Card, can generally redeem those points at 1.25 cents apiece against travel portal expenses or Pay Yourself Back categories.

    To be sure Chase isnt the only currency that can be redeemed at greater than a penny apiece outside of transfers. Bilt Rewards allows redemptions at 1.5 cents apiece towards mortgages, but thats less appealing than Sapphire Reserves 1.5 cent offerings which are more immediate, can be redeemed in smaller quantities, and the savings of course from those redemptions can be used towards a mortgage or anything else.

    How Cashback Rewards Work

    The simplest type is usually cashback. Whenever you make a qualifying purchase, your credit card issuer will offer a percentage of it back in cash automatically.

    For example, the Blue Cash Everyday® Card from American Express offers 20% cash back at during the first six months , 3% cash back at U.S. supermarkets up to $6,000 a year, 2% cash back at U.S. gas stations and select U.S. department stores, and 1% cash back on other purchases.

    As you can see from this Amex card, some issuers may put a cap on how much you can earn after a certain amount, then reduce your cashback offer. Other issuers may offer unlimited cash back, but they may not offer as high of a rate as this Amex card.

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    Places You Can Park All Your Points

    One facet of these transferable points programs is that they share some transfer partners in common. That means you can earn in all of the programs and then pool your points in a single airline frequent flyer program to book rewards. Thats great because it means initial card bonuses can all go to the same place, if that makes sense. It also means you can pick and choose which card you want to use based on which earns the most points for a given type of spending.

    It doesnt always make sense to do this. For instance you may be able to pool points from several programs into British Airways, but they may charge too much for an award. And you might already have points in a United MilaegePlus account and be looking to top that account off for an award, in which case supplementing with Chase makes more sense.

    However transfer partners in common is a very useful feature to be thinking about.

    The most ubiquitous partners are Air France KLM and Emirates which are partners of all 6 programs. Singapore Airlines is a partner of 5 programs . Air Canada is a very useful partner, and works with 4 programs . Somewhat less useful are Cathay Pacific, Virgin Atlantic and Qantas which are partners of four programs. Utterly useless is Aeromexico which partners with 4 as well.

    Join The Hotel And Airline Loyalty Programs

    What Is Credit Card Churning?

    Your credit card will pay rewards on your purchases. Most hotels and airlines have loyalty programs that will also pay rewards for your stays and flights. Signing up for these programs and free and you can boost your rewards when you provide your loyalty rewards number during booking.

    Lets say, for example, youre booking a flight on Delta Airlines and staying in a Marriott hotel. Use your SkyMiles number and your Marriott rewards numbers when youre booking to earn rewards with those programs. Plus, earn rewards on your credit card for the purchases.

    Stick to the same hotel and airline brands as much as you can. The more you use the same brands, the more points you can earn. Youll also move up in status levels which give you additional perks plus bonus points on your flights and hotel stays.

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    Blue Cash Preferred Card From American Express

    Welcome bonus: Earn $300 cash back after you spend $3,000 on purchases within the first six months of account opening.

    Annual fee: $0 intro annual fee for the first year, then $95

    Why we like it: The Blue Cash Preferred® Card from American Express can be a great option for those looking to earn a little cash back on their commutes. The card underwent a recent refresh that included the addition of a 3% bonus category for transit. Amex indicated that this category will cover parking, tolls, ride-hailing services, subway tickets and more. Cash back is received in the form of Reward Dollars that can be redeemed for statement credits.

    Importantly, unlike the earlier cards on this list, it carries a 2.7% foreign transaction fee . This means that youll want to leave it behind when packing for vacation overseas. Read our Amex Blue Cash Preferred review for all the details.

    The Best Use For Credit Card Points

    Author: Sean P. Egen

    A points credit card earns you points when you make eligible purchases with the card. It is one of the most popular types of rewards credit card, along with cash back rewards cards and travel miles cards. Points earned with a points credit card can typically be redeemed for discounted or complimentary travel, merchandise, gift cards, statement credits, or more.

    So, given that points can be redeemed for multiple rewards, is there a best way to use them? Well, best is obviously a subjective term, so what it really comes down to is how much value youll get for your points. But getting the most out of your points is also dependent on the particular interests and priorities of the points redeemer. For example, if you acquired enough points for free airfare to a domestic destination but have no interest in travelling, then redeeming your points for travel clearly isnt the best use of them for you.

    Here are some of the more common uses for credit card points and some of the things you may want to consider if youre ready to redeem them and want to maximize their value.

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    Can You Transfer Points Between Credit Cards

    Depending on the card issuer and your specific cards terms and conditions, you might be able to transfer points between credit cards. However, not every issuer offers this ability, even if you have multiple cards with the same issuer. Check the terms and conditions for your particular cards to see how the process works.

    Getting Your First Credit Card

    How to Use Credit Card Reward Points
  • 1Get a credit card from your bank or credit union. If you’ve never had a credit card before, it can be confusing to figure out where to start. A good first step is to visit the bank or credit union where you have a checking or savings account and ask the staff about the possibility of getting a credit card. Most local financial institutions will be willing to offer credit to responsible, qualified customers.XResearch source
  • Note, however, that your eligibility for a credit card can be affected by the length of your financial history. If, for instance, you’re a young adult who’s only had a savings account for a few months, you may not meet your bank’s standards for a credit card. In this case, you may need to maintain your savings account for some time or settle for a special type of credit card called a secured credit card
  • 2Get a credit card from a credit card company. A bank isn’t the only place you can get a credit card many credit cards are offered by companies that operate just like any other business. You are probably already familiar with some of these companies, like Mastercard, Discovery, etc. These sorts of companies offer a wide array of credit cards to many different kinds of customers, though, like banks, they will only issue them to customers that they believe are financially responsible enough to pay for them.
  • Loans have you paid these off on time, or have you been late or defaulted?
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    World Of Hyatt Credit Card

    Sign-up bonus: Up to 60,000 points:

    • 30,000 bonus points after you spend $3,000 on purchases within the first three months from account opening
    • 2 additional points per dollar on up to $15,000 in purchases, for a total of 30,000 points

    Annual fee: $95

    Why we like it: The World of Hyatt Credit Card offers commuters 2 points per dollar on all local transit and commuting expenses, which is great whether youre traveling or just heading to work or school. Eligible expenses include taxis, mass transit and ride-hailing services.

    The cards benefits extend to your stays at Hyatt as well. You receive automatic Discoverist status, which is good for travelers who dont frequent Hyatt. For travelers who want to earn higher elite status, this card can help you with that, too. Youll receive five elite night credits from the card automatically and two additional night credits for every $5,000 you spend on the card.

    On your Hyatt stays, youll earn a total of 9x points on your bill 4x from the card and 5x from being a World of Hyatt member. And best of all, youll receive a Category 1-4 free night each year when you renew the card. You have the opportunity to earn a second free night when you spend $15,000 in a calendar year. Read our World of Hyatt Card review for more card info.

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