Reward credit card points can become great holiday gifts

By Jeremy M. Simon

If the sound of sleigh bells jingling puts you in fear for the health of your pocketbook, take heart. Picking up holiday gifts for everyone on your list doesn't have to take a major bite out of your budget.  In fact, a bit of relief may come in the form of the reward credit card you already have in your wallet.   

Your credit card rewards or credit card airline miles may not be the most obvious item to put under the tree or tuck into a Christmas stocking, but they still can be converted into great gifts. You can redeem points for gift certificates or gift cards and use that extra cash to buy items for everyone on your holiday gift list. Or you can transfer miles or present e-cards to your loved ones.

Your points may get you further than you realize. If you redeem points at select retailers some credit card companies will boost your perks. For example, Discover Card's cash-back program lets cardholders as much as double their cash-back bonus when they redeem their gift cards or gift certificates from among Discover's more than 100 brand name partners, including Macy's, AMC Theatres and the Gap.

It is also possible to swap points for a particular present. Visa showcases a catalog devoted to holiday gifts that are available for "purchase" with reward points. They carry everything from children's toys to kitchenware. Citi also offers similar merchandise.

The credit card airline miles you've earned can also simplify gift giving. These miles can be used to send friends a family a vacation of their dreams without coughing up expensive airfare. 

"Travel is one of those gifts that almost all people love, and they continue to have a very high emotional and aspirational value," says Randy Petersen, a credit cards rewards program expert. "All major flier programs in the world allow members to 'gift' their awards to anyone of their choosing."

So, instead of dipping into your savings or going into credit card debt this holiday season, why not redeem some of those credit card reward points you have been accumulating the rest of the year?  The gift recipients are certain to thank you -- and so will your pocketbook.  

See related: Be wise when cashing in rewards points, Don't be 'breakage' -- 8 tips to avoid losing gift card value, The greatest gift of all: free travel, Giving the gift of flight with airline gift cards

Updated: December 22, 2009

	Three most recent Reward programs, cash back cards stories: Reward point 'gifts' are taxable, says the IRS – As sign-up bonuses for bank accounts and rewards cards have become more generous, someone new took interest -- Uncle Sam. Those sign-up bonus points are taxable, he says ... 6 reasons card rewards go unredeemed -- and how to change that – One-third of $48 billion earned in rewards points or miles goes unused every year for various reasons. What's keeping people from cashing in? ... 8 wise ways to rack up rewards while holiday shopping – Does racking up rewards while shopping for gifts make you naughty or nice? It depends on how you manage your spending ...

	CreditCards.com's newsletter Did you like this story? Then sign up for CreditCards.com’s weekly e-newsletter for the latest news, advice, articles and tips. It's FREE. Once a week you will receive the top credit card industry news in your inbox. Sign up now!