Covid Edition: Maximize Rewards Points Through Redemption (even if you’re not traveling)
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That dream weekend getaway to Hawaii or family summer vacation in Europe… canceled. Due to the coronavirus pandemic, many of our dream trips went on the backburner (or completely down the drain). However, that doesn’t mean your carefully earned points and miles have to (or should) go to waste!
While some credit card points like Chase’s Ultimate Rewards never expire, others like American Airlines and Hyatt do. This generally happens after 12-24 months of inactive account activity. What does an “active” account look like then? One where you’re earning and/or spending (“redeeming”) points.
Although redeeming points and miles for travel-related expenses generally gets you the most value back, you can still maximize rewards while you’re at home rather than abroad. Here, we’ll describe 4 ways you can redeem points to prevent expiration AND maximize their value.
Cash Back & Statement Credits
Given the effects of the economic downturn, and unstable or stressed income levels, it may be most valuable for you to use points directly to cover the bills. Thus, you can redeem these points for cash back and statement credits. Normally we wouldn’t advise doing this, since you typically only get 0.6-1 cent in value per point.
American Express Rewards - 0.6 cents per point redemption (using cards like the Amex Gold Card or Platinum Card)
Citi ThankYoupoints - 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)
Chase and Citi thus provide the most value from their 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 use their new accelerated redemption offer.
With the Chase Pay Yourself Back program, you get a higher points redemption rate when for purchase on gas, grocery, and home improvement purchases. Sapphire Preferred Reserve cardholders get 1.5 cents per point and for Sapphire Preferred cardholders get 1.25 cents per point. Thus, 60,000 points could be redeemed for $750 in travel purchases or with Pay Yourself Back with for Sapphire Preferred, rather than just $600 in cash.
Redeeming for gift cards is similar to redeeming for cash back. Redemption value usually falls around 0.5-1 cent per point and thus isn’t ideal, however 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 of DoorDash, Gap, and Domino’s Pizza), your redemption rate can easily surpass 1 cent each and the same $50 gift card would cost only 4,500 points.
Citi Thank You also offers redemption rates of 1 cent per point, with current discounts of 10% off at places like Chili’s, Panera, and Wayfair.
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.
Photo courtesy of Taylor Garner / Card Curator
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 friends who are doing some covid-safe traveling. It's also a great, more unconventional way to show your appreciation of 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 once every 30 days.
World of Hyatt: Transfer points once every 30 days to any other Hyatt account in good standing.
Donate Points to Charity
Finally, donating points to charity can be a meaningful way to prevent your points from going to waste, especially during the holiday season.
Nearly every rewards program offers a points donation program like the Citi ThankYou program, IHG Rewards Club, and American Express’s 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. These donations are not, however, tax-deductible.
Although spending your credit card points and miles on travel as usual isn’t quite the same, there are many ways you can maximize your rewards and prevent them from expiring. You can use points to cover the bills, help a charitable cause, and give gifts over the holiday season!