6 tips for gaining the most value when redeeming reward points | finder.com

6 tips for gaining the most value when redeeming reward points

These guidelines can help you maximize your reward points.

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It feels great to cash in all of those reward points on a new video game console or a flight to Hawaii. But it’s not always easy to know the best way to use credit card points – or if you’ve been missing out on even more ways to earn.

Here are six things you can do to make the most of your credit card points.

Use the credit card that will earn you the most points

While it sounds obvious, this doesn’t necessarily mean use a credit card that earns the most points per dollar on a purchase. Instead, you want a credit card that fits your everyday spending. For example, a rewards card with 3x points on dining purchases won’t help much if you don’t dine out often.

A great strategy for reliably earning points is to double up on your rewards cards. Pick one for everyday purchases, such as gas and groceries, and another for less common purchases such as travel.

Pick a rewards card that suits your rewards preferences

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 Reserve® Credit Card from American Express only earns Delta SkyMiles on eligible purchases.

These niche rewards cards are great if you value a certain hotel or airline brand and don’t mind catering to them specifically. The drawback is you’re 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.

Compare rewards credit cards

Name Product Welcome offer Rewards Annual fee Filter values
20,000 miles after spending $1,000 in the first 3 months
1.25x miles on all purchases and 10x miles at hotels.com/venture
Earn 20,000 bonus miles once you spend $1,000 on purchases within the first 3 months from account opening.
3% cash back bonus on up to $10,000 in the first 12 months, then 1.5%
3% cash back on up to $10,000 in the first 12 months, then 1.5% on all purchases
Earn 3% cash back on up to $10,000 in the first 12 months, then 1.5% on all purchases. See Rates and Fees.
75,000 points after spending $1,000 in the first 3 months
7x points on Hilton Honors purchases, 5x at US restaurants, US supermarkets and US gas stations, 3x on all other purchases
Earn 75,000 Hilton Honors Bonus Points after you spend $1,000 in purchases on the card within your first 3 months of card membership. Rates & fees
$150 cash back after spending $500 in the first 3 months
1.5% cash back on all purchases
Earn unlimited 1.5% cash back on every purchase, every day.
$150 after spending $500 in the first 90 days
5% on up to $2,000 each activated quarter on two categories combined (1% after), 2% on one everyday category and 1% on all other purchases
When you spend $500 on your card within the first 90 days, you’ll receive a $150 cash back bonus. Rates & Fees

Compare up to 4 providers

Review your transfer options

Perhaps the best way to redeem credit card points is to transfer them to a travel loyalty program.

For many of the premier credit cards rewards programs, you can transfer your credit card rewards points to a partnered airline or hotel loyalty program at a 1:1 ratio. However, point values are much more variable on many travel loyalty programs. In fact, it’s not uncommon for points to be worth 2 cents each or more, depending on how you redeem them.

Do a little research and you’ll be able to double or even triple the value of your credit card points. Compare airline loyalty programs to look at our current point values. Or if you prefer spending your points on hotels, check out the top hotel loyalty programs.

Make your redemptions through a single card

If you’re committed to getting the most value out of a rewards program, it pays to pick up a card that maximizes your redemption value. Many credit card rewards program points are worth a different value depending on which credit card you use to redeem them.

For example, flights booked with Membership Rewards points through the Amex travel portal are worth 0.5 cents each when you use Blue from American Express® Card. But they’re worth 1 cent each when you book using your The Platinum Card® from American Express.

These point values can vary greatly. For example, the Chase Sapphire Reserve® card boosts point values to 1.50 cents each when you use it to book travel through the Chase travel portal.

Transfer your points to this premium card as you earn points on your other cards to ensure you’re making the most of your points when you spend them. Just take care when managing multiple cards to not get overwhelmed.

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 they’re worth when redeemed on travel options. If you want to convert your points into merchandise purchases, consider a cashback credit card instead.

Take advantage of your welcome offer

Most rewards credit cards provide large welcome offer bonuses if you can meet the requirements. These bonuses range from simple cash back to enormous point bonuses depending on the card.

In many cases, a big chunk of your total credit card value is tied up in this welcome offer. If you don’t think you can meet the requirements of a card’s welcome offer, consider holding off until you can. You might also want to consider another rewards card with more forgiving requirements.

Spend within your means

Take care not to overspend in pursuit of a card’s bonuses. It’s better to play it safe and avoid carrying a balance if you can’t reach the spending threshold for a welcome offer or other credit card bonus. Choose a rewards credit card that best suits your financial situation.

Bottom line

Provided you do a little research, you have plenty of opportunities to turn your credit card rewards points into big value. Follow these guidelines to help make your choices even easier.

Compare rewards credit cards to find one that offers the rewards and earning potential that best fit your needs.

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