How to Use Credit Card Rewards to Spend Less on Holiday Gifts
If you’re feeling strapped for holiday shopping inflation this year but still want to buy gifts for family and friends, your hard-earned credit card rewards could come in handy.
As The Points Guy and others point out , you almost always get the most value from your rewards when you spend them on travel, like airfare and hotel bookings, rather than redeeming points and miles for cash back or non-travel purchases. However, if you’re looking for ways to lower your out-of-pocket spending on gifts this holiday season (and you don’t have the ability to use your rewards on upcoming trips), consider strategically spending some of those points and miles on people you care about.
Donate your points and miles
One way to get more value from your credit card rewards is to gift them to someone else to use for travel . Typically, this will require you to transfer your points to a partner airline or hotel loyalty program before you can transfer them to someone else (the exception is for Chase Ultimate Rewards members living in the same household). Some airlines charge a fee for transferring miles, while most hotels allow points to be transferred to another member for free.
To get around fees and transfer restrictions, you can invite your recipient to book a trip using your rewards, but don’t do this until you’ve confirmed they’re on board.
Exchange points for cash or credits on your statement
Some rewards programs allow you to get your points back, either by redeeming them for statement credit or for a cash reward, such as direct deposit or a mailed check. This can help offset the cost of gifts you are planning or have already purchased. However, your reward value may vary : Chase Ultimate Rewards typically offers better value per point through the Pay Yourself Back statement credit (1-1.5 cents per point redeemed), while American Express membership rewards allow you to earn as little as 0. 6 cents per point spent on statement credit. .
Use points to shop at select stores.
Another non-travel redemption option is to redeem credit card rewards on items from retailers like Amazon, Apple, Walmart and Best Buy, as well as through PayPal. (Airline and hotel points can sometimes be used to pay for merchandise, as well as for media subscriptions.) If you shop at these stores anyway, you can apply the points to purchases at checkout rather than having the charges charged to your card.
Again, costs vary widely depending on rewards programs and retailers. Chase Ultimate Rewards are worth 1 cent per point at Apple and 0.8 cents per point at Amazon; transactions made through CitithankYou Rewards may have exceptions and minimum purchase requirements.
Use points to buy gift cards
Finally, most rewards programs have a selection of gift cards that can be purchased with points. You can give gift cards as gifts or use them to purchase gifts at stores that do not qualify for points-based purchases. Be sure to read the fine print as delivery options can vary from a physical card sent to your address on file to an electronic card.
And again, the value of your points will depend on the rewards program—at this point, it’s probably not surprising that Chase Ultimate Rewards redemption rates top the list with the most selection, while airline and hotel rewards get the lowest value when redeemed. for gift cards. American Express membership rewards allow you to purchase Amex gift cards (not for specific merchants), but at a rate of just 0.5 cents per point.