Rewards points offers you should avoid

Buying points and redeeming them for gift cards is almost always a bad idea

Cashing In with Tony Mecia

Tony Mecia is a business journalist who writes for a number of trade and general-interest publications. Every week, he answers readers’ questions about credit card rewards programs in his “Cashing In” column.

Ask Tony a question, or see if your question has already been answered in the Cashing In answer archive.


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My hotel loyalty program offers earning and redemption options that seem insulting to me. What are my options?

Understanding the ins and outs of loyalty programs is key to maximize the value of your points.

Some of the options for earning and redeeming points certainly do not make any sense and you should simply ignore them.

These include buying points in nearly every case, and redeeming points for gift cards.

Expert Q&A

Check out all the answers from our credit card experts.

Dear Cashing In,

What recourse do customers have when reward points are inflated and the redemption of reward points are deflated?

Choice Rewards offers a customer the opportunity to purchase 16,000 points at a 20 percent discount for $160. If the points are redeemed, you get a $50 gift card. That seems insulting. – Jeff 

Dear Jeff,

Reward programs can be tricky. When you participate in them, you have to develop an understanding of how you accumulate and how you spend the points — and what redemptions make sense and which ones don’t. 

You can receive a lot of value from reward programs, especially if you receive a boost from a credit card that gives you points when you sign up.

See related: 7 hotel rewards mistakes you should avoid

Earning points via a credit card is easy

In the case of Choice Rewards, which is a hotel rewards program that covers brands including Quality Inns and Comfort Inns, the credit card is the Barclay Choice Privileges Visa Signature card.

The card has no annual fee and gives you 32,000 Choice points after you spend $1,000 on the card in the first 90 days. That’s enough points to get you up to four free nights at a hotel.

Like a lot of reward cards, that’s a pretty good deal: You sign up for a card, pay no annual fee, and get a few hotel nights.

But the value becomes trickier when you start participating in the program in other ways, and when you try to redeem the points on something other than hotel rooms.

You can earn points by using the card and staying at hotels, but as you point out, you can also buy them.

You can redeem the points not just for hotel stays, but also for gift cards and magazine subscriptions, and you can trade them in for airline frequent flyer miles.

Redeeming points is usually a bit more complicated

Depending on how you acquire your points and how you spend them, you will receive very different values.

In general, reward programs offer the best value when you redeem points for something that the company has direct control over. In this case, that’s hotel rooms. If we are talking about airline programs, the best value tends to be redeeming for flights on that airline.

The value declines when you start using your points on things the company does not control and has to buy from an outside business, like points from another airline and gift cards. 

Redeeming points for gift cards: Usually a bad idea

In your example, you happen to have chosen what are probably some of the worst earning and redemption options.

Buying points seldom makes sense, even if the company is offering them at a discount. (It is almost always cheaper to pay for the hotel room itself than to pay for the points to stay in a hotel room.) And redeeming hotel points for something other than hotel rooms will almost always be a poor value.

Tip

Tip: Most of the time it’s smart to ignore those emails you receive from hotel and airline loyalty programs with offers to sell you more points. However, there are instances where it may be worth it – for example, when you need to top up your loyalty program account to for an award. Read “Buying points and miles: 3 times when it may be worth it” to learn more.

Ignore points offers that make no sense

That’s how you would get into a situation where you are faced with paying $160 for a $50 gift card.

Obviously that makes no sense. Just buy the gift card and save yourself $110. You are probably not even able to get $160 worth of hotel rooms by spending $160 on hotel points.

A lot of people get carried away with these programs and become enamored with playing the points game.

But if you play, play to win: Understand precisely how these programs work and how you can find the best value.

Buying points and spending them on gift cards is almost always a sure way to lose.


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Updated: 02-21-2019