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Credit card rewards and perks during coronavirus

Most airline and hotel credit cards have extended some of their benefits well into 2021.

Updated . What changed?

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Coronavirus is directly affecting us all. And among many other factors, you’re likely contemplating its effects on your finances — specifically your credit card rewards. There are different considerations for what you should do with them depending on your situation and the type of rewards you have.

If you’re wondering what happens to your elite tier status, your companion certificate or the free hotel nights you have earned, know that most reward programs have extended the expiry date.

What should I do with my rewards now that I’m not traveling?

There’s no cut-and-dry answer to this, as it depends on a variety of factors. However, here are a few common scenarios that might apply to you, as well as our recommendations.

  • If you’re carrying a balance on your credit card and accruing interest… Use your rewards to pay down your balance, as the interest you accumulate is effectively eating into your rewards.
  • If you have rewards in a frequent-flyer program or hotel loyalty program… Keep your rewards. In a frequent-flyer program, flights offer the best value. Similarly, hotel stays offer the best value in a hotel program. However, if you think the risk is too high in keeping your rewards, you may consider redeeming for cash or gift cards.
  • If your credit card provider lets you redeem rewards only for cash back or statement credit… Redeem your rewards. There’s little use hoarding cash back, as it’s not designed to give you higher value through travel redemptions or rewards transfers.

What if I have points or miles in a credit card rewards program with multiple redemption options?

If you can get a good redemption rate now and you don’t see a big upside to using your rewards later, consider redeeming now. A 1-cent-per-point-or-mile redemption rate is the industry standard. However, you’re likely better off keeping your points or miles as long as you see the possibility of traveling within the next year.

This is because travel typically offers far and away the best value for your rewards. With some programs, such as Chase Ultimate Rewards and Membership Rewards, you can find upwards of 2 cents per point with transfers to select travel partners.

Can rewards change in value or expire?

Another question on your mind might be how the value of your rewards will fluctuate — or, worse, whether they can disappear from your account entirely. Here’s the scoop on these understandable concerns.

Will the value of my rewards change?

The value of your rewards can change depending on how your card issuer or loyalty program tinkers with redemption options. Airlines, for example, are notorious for devaluing their miles by changing the prices of award flights. Hotel chains, similarly, shift award prices regularly.

Unfortunately, knowing that might not matter much. Non-flight and non-hotel redemptions in frequent-flyer and hotel programs, respectively, typically give you mediocre value.

Here’s the implication: If you have miles or points in an airline or hotel program, it’s probably best to hold on to your rewards.

If you have rewards in a program run by a credit card issuer, you might have a better reason to keep your points. That’s because you can often find other good uses for your rewards if certain redemptions get devalued. And if your issuer allows point transfers, it could be worth retaining the flexibility to move points to airlines and hotel chains when you’re ready to travel again.

Will my rewards expire?

Typically, your points or miles won’t expire inside a credit card rewards program as long as you keep your account in good standing.

This is the case with many issuers, including:

  • American Express (Membership Rewards)
  • Bank of America
  • Capital One
  • Chase (Ultimate Rewards)
  • Citi (ThankYou Rewards)
  • Discover

Keep in mind that certain cards might have different policies. For example, points from the Wells Fargo Propel American Express® Card don’t expire as long as your account is open. But points from the Wells Fargo Rewards® Card expire after 60 months.

Be vigilant with your rewards if you have a cobranded card, such as a hotel or airline credit card. Loyalty programs have their own rules on when rewards expire, and your credit card issuer can’t control that. On the bright side, there are usually a few ways to keep your rewards active if you don’t want to spend them right away.

Ways to keep your rewards active

Policies vary between rewards and loyalty programs, but here are a few of the best ways you might be able to keep your points from expiring:

  • Show earning activity.
    Some loyalty programs keep your rewards from expiring as long as you’re still earning points or miles in your account within a certain time period. This could be as simple as using your credit card for a small purchase just to earn a few points or miles.
  • Use a shopping portal.
    Reward programs often have shopping portals where you can make purchases to earn points or miles. This can be a good option if you spot something you were going to buy anyway.
  • Join the Rewards Network.
    If your rewards program is partnered with the Rewards Network, you can dine at eligible restaurants and earn points or miles. If you don’t want to dine in, you may be able to order takeout or delivery.
  • Donate.
    Your program might allow you to donate your rewards. This could be an option if you don’t foresee any clear use of your rewards anytime soon, and it can be a nice gesture in these uncertain times. Just keep in mind you might not get a great value for donations compared to other redemptions.

If none of these options work, give a call to your provider or loyalty program and ask a representative if they can keep your rewards active. It never hurts to ask.

What do I do if I know my rewards are going to expire?

You might not have the ability to prevent your rewards from expiring. For example, your program’s policies might state your rewards will expire after a certain time, regardless of account activity. In this case, your best bet is to redeem for as much value as possible.

With frequent-flyer miles, you could book a flight for travel far into the future. Many airlines let you book as far as 11 months in advance. Note that most airlines don’t charge no-show fees, so missing your flight outright is a possibility — even though this might not be optimal. Alternatively, you can eat any redeposit fees if you want to cancel your flight later on and get your miles back.

The same concepts applies to hotel points. You can use your rewards for travel in the future, and you might benefit from lenient cancellation policies from most hotels if you decide not to go through with your plans.

Alternatively, you may be able to use your rewards for other redemptions through your program’s shopping portal. For example, ANA miles expire after 36 months, regardless of account activity. But the airline lets you redeem miles for options such as hotel coupons, restaurant coupons, merchandise and points with retail partners.

Will I still have my frequent-flyer miles after an airline bankruptcy?

This depends on whether the airline continues operating after bankruptcy. If it does, you’ll still have your miles and probably keep any status you’ve earned. But if the airline ceases operations — for example, it doesn’t merge with another carrier — you’ll lose your miles.

Unfortunately, this also applies to miles you earn with a cobranded airline card. If you’re worried about the possibility of losing your miles, consider making your purchases with credit cards that pay flexible rewards. Look for programs that let you transfer points or miles to travel partners, including Chase Ultimate Rewards, American Express Membership Rewards, Citi ThankYou Rewards and Capital One Rewards.

When should I use other redemption options?

You should typically consider other redemption options if you can get a value of 1 cent per point or mile. If you get less than this rate, it’s probably a poor idea to go through with the redemption.

Unfortunately, most redemptions outside of travel, cash back and statement credit will give you uninspiring value. Merchandise is usually a poor choice, and many gift cards can be bad options. It can even be ill-advised to transfer rewards to certain loyalty programs, as you could get a low redemption rate.

How to calculate the value of your rewards

To understand whether you should go through with a redemption, calculate the value of your points or miles. Here’s what to do:

  1. Visit your credit card’s rewards portal and look for a redemption option.
  2. Find the value of the redemption.
  3. Divide that value by the number of points or miles required.

Here’s an example. Say you find a $100 gift card that requires 10,000 points. To find if this is a good deal, simply divide $100 by 10,000. You’ll get 0.01, or 1 cent per point. That’s not a bad trade.

Now, what if the $100 gift card cost 12,500 points? Divide $100 by 12,500 and you’ll get 0.008. This is 0.8 cents per point — a mediocre deal.

Do these calculations with all redemptions, even the ones that seem straightforward. Even simple options might not give you the best value. An example is redeeming Amex Membership Rewards points for statement credit, which gives you a poor value of 0.6 cents per point.

How credit card issuers are adjusting rewards and card perks in response to Covid-19

After the initial assistance in the terms of waiving credit card fees and late payment fees for eligible cardholders, card issuers have also made positive changes to their rewards programs.

Credit card issuers extend welcome offer bonus deadline

One of the adjustments card issuers have made is extending the welcome offer deadline.

Welcome offer extension
American ExpressEligible card accounts approved from December 1, 2019, through May 31, 2020, get an extended welcome offer for an additional 3 months.
Bank of AmericaPersonal and business credit cards opened between January 1, 2020 and March 31, 2020 get a 90-day extension to earn the signup bonus.
ChaseCredit cards opened between January 1, 2020 and March 31, 2020 get a three-month extension to earn the signup bonus.

American Express cards: If your card approved between December 1, 2019, and May 31, 2020, is eligible for a welcome offer, the period to make eligible purchases to earn your welcome bonus is extended for an additional three months.

Reward program changes

Some card providers have also adapted their reward programs for lockdown use.

Reward program changes
Bank of AmericaUntil December 31, 2020, Bank of America Travel Rewards cardholders can also redeem their points on dining, groceries and takeout.

Bank of America Premium Rewards cardholders will receive a $50 statement credit applied to groceries and dining during the same time period.

BrexStarting March 31, 2020 and for a limited time, Brex is offering its cardholders to opt in to new rewards program, which includes categories like food delivery and remote collaboration tools.
Capital OneUntil June 2020, Capital One let its travel cardholders redeem miles for additional categories, such as food delivery, streaming services and phone services.

Until January 31, 2021 earn unlimited 5% cash back or 5x miles on Uber Eats with any of the Savor or Venture credit cards.

ChaseChase added streaming services to its Chase Freedom Flex℠ rotating categories for the quarter of April through June.

Upon activation from August 1, 2020, through September 30, 2020, you can earn up to 7x points/miles on groceries and gas on up to $1,500 in combined purchases per month for current cardholders of some cobranded travel cards (Southwest, United, IHG and Avios cards).

From August 1, 2020, through October 31, 2020, some business credit cards are automatically eligible to earn 5x points/miles on shipping and advertising purchases made on social media and search engines on up to $10,000 in combined purchases (Ink, Southwest and United cards).

CitiCiti Prestige cardholders will earn 5x points on online purchases through August 31, 2020. Purchases that count toward the card’s travel credit have also been expanded to include grocery stores and restaurants through the end of 2020.

Citi has bumped the release the Citi Premier‘s inclusion of grocery stores and dining to August 23rd.

DiscoverThe Discover it® Miles credit card can now redeem rewards as statement credits toward restaurants and gas stations in addition to travel. This is a permanent addition to the card.

Credit card issuers offer or extend travel credits, airline companion passes and free hotel rewards nights

With the coronavirus pandemic, nearly all travel has been suspended. Because of that, some card issuers have extended the validity of their companion pass, elite status tiers or hotel award nights.

Travel extensions
Alaska AirlinesAlaska Airlines extends companion certificates set to expire on 2020 until December 31, 2020.
Delta Air LinesCompanion certificates and travel vouchers set to expire before June 30, 2020 are extended until December 31, 2020.
Southwest AirlinesCompanion certificates set to expire in 2020 are extended until July 30, 2021.

A-List and A-List preferred tiers will have their status extended until December 31, 2021.

American AirlinesCurrent elite status tier members have their membership extended until January 31, 2022.

The requirements to earn and hold elite status tier has been lowered throughout 2020.

United AirlinesElite tier members get an extension of their elite status until January 31, 2022.
MarriottMarriott free night awards set to expire in 2020 are extended until January 31, 2021.

Marriot suite night awards set to expire in 2020 are extended until December 31, 2021.

World of HyattWorld of Hyatt free night awards set to expire in 2020 are extended until December 31, 2021.

Elite status tiers for existing members get a one-year extension.

HiltonWeekend night rewards set to expire in 2020 are extended until December 31, 2021.
IHGAnniversary night certificates set to expire in 2020 are extended until December 31, 2020.
RadissonCertificates set to expire between March 1, 2020 and July 31, 2020 are extended until June 30, 2021.

Can I get a refund if I already booked travel with my rewards?

If you’ve booked a flight or hotel stay with rewards, you might get your points or miles refunded. If applicable, you’ll also want to consider your credit card’s travel insurance, which might reimburse you depending on your travel plans.

Getting refunds with airlines

Many airlines are now allowing travelers to rebook eligible flights at no cost. You’ll likely find requirements to have booked a flight before a certain date and for certain dates of travel.

Keep in mind that most airlines will charge redeposit fees — the cost to return miles to your account — in the event of flight cancellation. That said, you might elect to simply change the dates of your travel instead.

Getting refunds with hotels

Most major hotel chains will let you get a refund on bookings made with points, as long as you opted for a refundable booking. Typically, you’ll need to cancel 24 to 72 hours before arrival.

As always, rules may vary depending on the specific hotel you’re staying at. If you’re in doubt, check with the hotel directly.

Getting refunds with credit card issuer reward programs

If you want a refund for a booking you made through your card issuer’s rewards program, know that your issuer will probably defer to the airline or hotel’s cancellation policies.

For example, if you want to cancel your flight, an airline’s cancellation fees might apply before you get your refund. That might mean you receive fewer points or miles back than you initially spent.

In some cases, you’ll receive your refund in the form of statement credit — as is the case with Amex Membership Rewards.

Should I try to earn more rewards right now?

If you’re already earning rewards from your credit card, there’s no reason to stop doing so for purchases you make regularly.

Whether you should try to earn additional cash back, points or miles depends on your overall strategy for rewards redemption. If you think you’ll quickly use rewards after you earn them, for example, it could be worth shooting for a signup bonus. Otherwise, you might feel uncomfortable earning a signup bonus only to have your rewards sit around unused.

Another factor to consider with a signup bonus is whether you can meet the spending requirement. With decreased activity all around us these days, you might simply have fewer things to use your credit card for. It would be a big waste to open a card and miss out on the signup bonus.

Which types of cards should I get if I want to earn rewards?

This depends on your appetite for risk. If you want the lowest volatility, a cashback card is your best bet. Its rewards are very straightforward: If your credit card issuer says you’ll earn 2% cash back, it means you’ll earn $2 back for every $100 you spend. While nothing is ever guaranteed, cash back is the closest you can get.

If you want travel rewards, consider general travel cards that offers points or miles you can use for a variety of redemptions. Especially good picks include cards in the Chase Ultimate Rewards, American Express Membership Rewards, Citi ThankYou Rewards and Capital One Rewards wheelhouses. What they offer is flexibility, which is important when it’s hard to predict what the travel landscape will look like in the future.

Airline and hotel cards are definite possibilities. But understand you’ll be taking on higher risk with your rewards, as companies can devalue your points or miles and you won’t have many other redemption options.

Bottom line

Whether you should redeem your credit card rewards depends on your situation as well as what type of rewards you have. If you have a cashback card, consider redeeming now. But if you have a travel card, you might be better served by keeping your rewards.

Stay updated with breaking news and how to protect yourself by visiting our coronavirus hub.

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