Maximizing a credit card with great rewards isn’t just about earning the most points; you also need to know the most valuable ways to redeem them.
Most rewards cards give you options when it’s time to redeem: cash back or statement credits, travel, online shopping, gift cards and more. However, not all these deliverances are equal. Your specific credit card and rewards program can play a role in which redemption is best for you.
If you’re sitting on a pile of credit card rewards, compare whether it’s best to use your points for cash back on new purchases or for travel.
Read more: The best rewards credit cards
The value of your credit card rewards varies depending on the redemption you choose. Because most points-earning cards are travel rewards cards, you often get the most for each point when you redeem them for travel – through your issuer’s travel portal or by transferring points directly to partner airlines or hotels.
Here’s an overview of shopping versus travel redemptions among popular credit card rewards programs:
American Express travel credit cards earn points within the issuer’s Membership Rewards program. Unlike Amex cash back credit cards or co-branded cards from hotel and airline partners, these cards offer several redemption options.
Here are popular Amex Membership Rewards cards and a breakdown of redemptions:
Read more: The best credit cards from American Express
Amex cards allow you to get the most value from a specific travel option: airline tickets. When you use your points to book flights through Amex Travel, they are worth 1 cent each. In other words, you can get $100 worth of 10,000 Membership Rewards points.
The other way to maximize your points is to transfer them to Amex’s airline and hotel partners. Most partners have a 1:1 transfer ratio, meaning your 10,000 Amex points will translate into 10,000 points or miles with the partner program. The final redemption value then depends on your trip and when you book.
Other forms of travel, including booking hotels, cruises, rental cars and more through Amex Travel, are worth less than 0.7 cents per point, or $70 per 10,000 points. That’s about the same as what you get for store redemptions.
Read more: Amex Platinum vs. Amex Gold — Which Card Should You Take on Your Next Trip?
Most Amex store redemptions are worth less than 1 cent per point.
When you use your points to pay at checkout at the following merchants, you get 0.7 cents per point redeemed: Amazon, Best Buy, Grubhub, PayPal, RiteAid, Seamless, Staples and more. Refunds on statement credits become even less; you can redeem points for as little as 0.6 cents each for statement credits, or $60 per 10,000 points.
Read our full reviews of The Platinum Card from American Express and the American Express Gold Card.
Capital One travel credit cards earn miles, not points, but we can compare redemption rates the same way. Here are a few cards you can use to earn Capital One miles, and a look at the range of redemption options:
When you redeem Capital One Miles for travel, you can expect to receive a standard value of 1 cent per mile. This includes booking travel through Capital One Travel or covering previous travel purchases charged to your card.
When you transfer miles to one of Capital One’s more than 15 airline and hotel travel partners, most have a 1:1 transfer ratio (although there are some exceptions depending on the program). The total value of your points once transferred will depend on your travel plans and the program itself, but with many travel programs it is possible to get the same value of 1 cent per point.
Capital One miles can be worth much less if you choose a non-travel redemption. You can choose to redeem miles for cash back and statement credits, but if you don’t use miles to cover a previous travel purchase, you typically only get 0.5 cents per mile. In other words, you get $50 back with 10,000 miles.
Gift cards may be slightly better, but still much less valuable than travel redemptions. Gift cards available through Capital One generally cost about 12,500 miles for $100, or about 0.8 cents per mile.
Read our full reviews of the Capital One Company, CompanyAnd VentureOne credit cards.
Chase cards are unique among rewards credit cards because the value of your points can depend on the card you use to earn and redeem them. Here’s an overview of some Chase rewards cards and the redemption options you can choose from:
Read more: The Best Chase Credit Cards
Like other programs, Chase Ultimate Rewards points are generally most valuable when you redeem them for travel. If you have a Chase Freedom Unlimited or Freedom Flex card, you get 1 cent per point you redeem for travel through Chase Travel℠.
With a Chase Sapphire card, you can increase your travel redemptions. Chase Sapphire Reserve points are worth 1.5 cents each and Chase Sapphire Preferred Card points are worth 1.25 cents each when redeemed for travel through Chase Travel. That means the same 10,000 points that would normally get you $100 toward a future trip could instead be worth $150 or $125, respectively.
Another valuable travel redemption option with Chase cards is transferring points to travel partners. Only Chase Sapphire cards are eligible for 1:1 transfers. Once transferred, the value of your points will depend on the airline or hotel program you choose and your specific booking.
Cash back and store rewards vary, but are generally lower than travel redemptions. If you want to use your points for cash back or statement credits, you’ll get a value of 1 cent per point, or 10,000 points for $100 cash back.
For a lower rate, you can pay with points at checkout at select online retailers. For example, if you redeem for purchases at Amazon and PayPal, you will receive a value of 0.8 cents per point. Gift vouchers have more variety. They are also generally worth 1 cent per point, but may be on sale with offers like 2,250 points for a $25 gift card (instead of 2,500) or 900 points for a $10 gift card (instead of 100) .
Read our full Chase Sapphire Reserve And Chase Sapphire is preferred card reviews.
Under many additional credit card rewards programs (Wells Fargo Rewards Points, Citi ThankYou Points, US Bank Altitude Rewards Points, etc.), you can count on earning the standard 1 cent per point when you redeem for travel through the issuer’s portal.
Redeeming cash or shopping varies, but don’t be surprised if your travel rewards are worth less if you use them for shopping, regardless of which issuer you choose.
Don’t forget to check the fine print of your specific credit card for any additional value you might get for certain redemptions. Here are just a few examples of credit cards (like the one above) that inherently offer more value when you use points for travel:
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Bank of America points are generally worth 1 cent, but you decide to redeem them too. But Bank of America® Travel Rewards credit card points are worth 1 cent each when you redeem them for qualifying travel or dining purchases, and only 0.6 cents each when you redeem them for cash.
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American bank Altitude Rewards cards typically earn 1 cent per point, regardless of whether you choose travel, statement credits, gift cards or another redemption. But if you have a US Bank Altitude® Reserve Visa Infinite® Card, you can get an extra 1.5 cents per point when you redeem it for travel instead of cash or shopping.
Regardless of the type of points your rewards credit card earns, take the time to log into your online account and review your redemption options. You can get the best idea of exactly what your points are worth and how to best use them by checking out the different options available and checking the fine print in your card’s rewards program overview.
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Usage your points. No matter how you redeem your rewards, your points will lose value over time. Although most credit card points do not expire as long as your account is open, some redemptions may become devalued or you may feel the effects of inflation. Unless you’re saving for a big redemption, use the points you earn.
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Read the fine print. Full details about your card’s points can be found in your card agreement and rewards program document. Here you will get specific information about redemptions that provide increased value or redemptions that provide much less than 1 cent per point. The more informed you are about everything your card has to offer, the better you can ensure you maximize your rewards.
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Use transfer partners. Many credit card issuers partner with specific airlines and hotel brands, allowing you to transfer your credit card points to the travel loyalty program. Points are generally transferred at a 1:1 ratio, although this may vary. Airline and hotel loyalty programs often use dynamic pricing, which means the value of your points or credit card miles can change depending on when you book, your specific travel plans, availability and more. If you have flexible plans and like to fly a specific airline or stay with a specific hotel chain, this can be a great way to get the most out of your points (though it may take some extra strategy).
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Consider a cashback card. If you consistently prefer cash, statement credits, or store redemptions, you may want to reconsider whether a rewards card that earns travel points is right for you. Instead, compare cash back credit cards with bonus rewards on your regular spending so you can continue earning great rewards and more easily redeem them for maximum cash value.
Read more: The best cashback credit cards
This article was edited by Alicia Hahn
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