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Rewards points offers you should avoid

Learn which redemption offers you should skip and when


Cardholders often find rewards redemption choices challenging. Here is a guide to help you decide which ones to avoid at all costs.

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While earning points with a rewards credit card is relatively easy, cardholders often experience challenges when it comes time to redeem those hard-earned rewards. Not only do frequent flyer and hotel loyalty programs come with limiting blackout dates and complex redemption rules, but even “simple” programs may limit your options to a few basic choices you don’t necessarily love.

From there, you’ll find your points may even be worth more or less depending on how you redeem them and when. Of course, these rules vary widely depending on your card issuer and the type of rewards points you earn.

There are a few redemption options you should absolutely avoid unless you have no other choice. Read on to learn which rewards points offers you should try to skip and when.

Merchandise redemptions

One popular redemption you should almost always avoid is merchandise, although this really depends on your rewards credit card and its rewards program. You should avoid redeeming your points for merchandise because you’ll almost always get less than 1 cent each when you do.

As an example, the American Express Membership Rewards program lets you shop with Amex points at a variety of retailers. However, you’ll only get 0.5 cents per point in value when you do. And if you pay with Amex points at checkout at stores like Best Buy and, you’ll get just 0.7 cents per point.

Even Chase Ultimate Rewards points, which are worth 1 cent each when you redeem them for statement credits, offer a value of just 0.8 cents per point when you redeem for purchases through or use them to shop with PayPal.

Point transfers when travel is cheaper through a portal

Another redemption option you’ll want to avoid is one you’ll have to research ahead of time. While flexible programs like Chase Ultimate Rewards and Amex Membership Rewards let you transfer your points to frequent flyer and hotel loyalty programs, that doesn’t mean it’s always a good idea.

For example, let’s say you want to book a stay for two at the Holiday Inn Resort in Montego Bay, Jamaica, this fall. If you decide to book through the Chase Ultimate Rewards portal, you can get it for as few as 13,176 points per night with the Chase Sapphire Reserve card.

However, the same hotel would cost you 50,000 IHG One Rewards points per night if you booked it through the hotel program.

In this case, a free night would cost you more than 3X as many points if you transferred them from Chase to IHG. Obviously, you’d be a lot better off booking through Chase and keeping the extra points for something else.

Gift cards (most of the time)

While some programs let you redeem points for gift cards at a rate of 1 cent per point (or even more), there are others that give you a raw deal if you choose this option. Also, note that some credit card programs may give you a different point value depending on the type of gift card you select, so you’ll need to check and compare options ahead of time.

For example, redeeming Amex points for gift cards could net you anywhere from 0.5 cents per point to 1 cent per point in value, depending on what you choose. However, the Citi ThankYou program and Chase Ultimate Rewards typically give 1 cent in value for all their gift card options, as do most cash back credit cards.

Statement credits (if less than 1 cent per point)

Both American Express Membership Rewards and Capital One miles are known for offering less than average value when you redeem your points for statement credits.

In fact, you get 0.6 cents per point in value when you use Amex points to cover your card charges, whereas Capital One offers just 0.5 cents per point if you opt for a statement credit or a check in the mail.

Bottom line

While using your points for any of these options may be better than doing nothing with them, you should always try to get as much value for your rewards as you can. For the most part, it isn’t that difficult if you’re willing to do a little math and some research before you use them.

At the end of the day, you should always try to get at least 1 cent per point in value for every point you redeem. If a redemption option you want comes in with a lower value than that, you should definitely think twice.

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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