4 Alternative Ways to Redeem Credit Card Rewards

    

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Redeeming points and miles for travel-related expenses generally gets you the most value back; there are, however, other alternatives to redeem your rewards for. Here, we’ll describe four alternative ways you can redeem your points for, which can help prevent rewards expiration as well. 

Cash Back and Statement Credits

One option to redeem your credit card rewards is in the form of cash back or a statement credit, which you can put directly in your checking account or apply towards the card’s balance. Normally we wouldn’t advise doing this, since you typically only get between 0.6 to 1 cent in value per point. 

Here’s an example of popular card rewards programs and the cent value of their points when redeeming in cash back or a statement credit:

  • American Express Rewards - 0.6 cents per point redemption (using cards like the Amex Gold card or Platinum card)
  • Chase Ultimate Rewards - 1 cent per point (using cards like the Chase Sapphire Reserve or Sapphire Preferred card)
  • Citi ThankYou Points - 1 cent per point (using cards such as the Citi Premier or Rewards card)
  • Capital One Miles - 0.5 cent per mile (using cards such as the Capital One Venture Rewards or Spark Miles for Business card)

As you can see, Chase and Citi provide the most value for redemption. Chase especially gives its credit card users an advantage– you can link your Ultimate Rewards account to a bank account to directly transfer points, and you can also use their new accelerated redemption offer. 

Not to mention, with the Chase Pay Yourself Back program, you get a higher points redemption rate for gas, grocery, and home improvement purchases. For example, Sapphire Reserve cardholders get 1.5 cents per point and Sapphire Preferred cardholders get 1.25 cents per point. Thus, 60,000 points could be redeemed for $600 in cash with the Sapphire Preferred card through the Chase Pay Yourself Back program.

Gift Cards

Another option is to redeem your card rewards for gift cards, which is similar to redeeming for cash back. The redemption value usually falls around 0.5 to 1 cent per point and isn’t ideal,  but there are more opportunities to earn over 1 cent per point with some basic strategy.

Chase Ultimate Rewards is one specific method since they regularly offer discounts on gift cards. Currently, Ultimate Rewards points are worth 1 cent each towards gift cards, so a $50 gift card would equate to 5,000 points. 

However, given that they regularly offer discounts on gift cards (such as 10% off on Panera Bread, Under Armour, and Chili’s), your redemption rate can easily surpass 1 cent each and the same $50 gift card would cost only 4,500 points. 

Citi ThankYou also offers redemption rates of 1 cent per point, with current discounts of 10% off at places like Sephora, Outback Steakhouse, and Fandango. 

Furthermore, American Express has many options for merchant gift cards, however the redemption points are comparatively weaker. We wouldn’t advise redeeming Amex points for less than 1 cent per point, but it is technically an option.

Points Transfer to Friends and Family

One of the more lesser known redemption methods is transferring points to friends and family. These also make for great gifts for savvy credit card users or for friends who enjoy traveling. Not to mention, it's a great unconventional way to show your appreciation for them!

While a few rewards programs charge you per point transfer, most programs allow you to share points with friends and family for free. For major hotel programs transfer rates are as follows:

  • Marriott Bonvoy: Transfer up to 100,000 points per year, free of charge.
  • Radisson Rewards: Transfer points to a household member, free of charge; but the household member must share the same address for at least 30 days prior to the points transfer and both rewards accounts are at least a year old. This is only if you’re not an elite status member.
  • World of Hyatt: Transfer points once every 30 days to any other Hyatt account, free of charge. However, both accounts must be in good standing.

Donate Points to Charity

Finally, donating points to charity can be a meaningful way to redeem your rewards. Almost every rewards program offers a points donation program like the Citi ThankYou program, IHG Rewards Club, and American Express’ JustGiving (which has over 1.5 million nonprofits to choose from). Major nonprofits like UNICEF, the American Red Cross, and Habitat for Humanity are nearly always represented.  However, these donations are not tax-deductible.

Final Thought

Although spending your credit card points and miles on travel is the best way to get maximum value, there are other alternatives you can redeem your rewards for. You can use your points for cash back, help a charitable cause, or to give gifts to family and friends.

Want to maximize your credit card rewards for cash back or charitable giving? Then be sure to download the Card Curator app in the Apple App Store or on Google Play today.

Written by John Garner
John Garner is the founder & CEO of Card Curator. John spent 5+ years as a volatility trader for Merrill Lynch before deciding to start Card Curator and follow his real passion: credit card rewards and travel. To date, he has visited almost 90 countries by using rewards earned from 100+ credit cards. He’s an expert in all things related to credit cards and free travel, and loves helping others crack the code in the points and miles game.

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