The best way to redeem credit card points depends on your lifestyle and monthly financial needs. To maximize your benefits, consider all your options, and calculate the value of your points based on the available rewards. Be sure always to read the terms and conditions of your card and check if your rewards program has an earnings limit, redemption restrictions, and expiration date.
1. Book Flights With Specific Airlines
Some travel credit cards let you use your points to book free or discounted flights with specific airlines. The airline determines the number of points or miles you need for a specific flight, which is typically based on where and when you’re flying. The best personal and business travel credit cards allow you to earn top-tier rewards and purchase flights from several different airlines.
2. Redeem Your Points for Cash Back
A handful of points-based personal and business credit cards let you redeem your rewards as cash back in the form of a check, direct deposit, or statement credit. When you redeem your points as a check or deposit, you can use the money any way you want. When you redeem your points as a statement credit, your issuer will apply a credit automatically to your monthly bill.
3. Free or Discounted Hotel Stays
If you have a cobranded hotel card, you can redeem credit card points for free or discounted hotel rooms directly through the hotel. However, if you have a travel card that isn’t paired with a specific hotel, you can typically book a hotel through your issuer’s rewards portal or by receiving a credit on your statement. This is the best way to use credit card points for frequent travelers who prefer to save money on hotel stays.
4. Use Your Points for Online Shopping
Some issuers partner with online stores and allow you to use your rewards to pay for purchases. Issuers that offer this redemption method typically have their own shopping portal, so it will be easy to identify eligible online stores. The value of your points may vary depending on the issuer and the retail store.
5. Receive Gift Cards for Your Points
Many credit cards allow you to redeem points for gift cards with select retail partners, including major dining, shopping, and entertainment brands. While available brands may vary across different issues, gift cards are typically a popular choice because you can often get one with a high monetary value for fewer points.
6. Pay for Specific Transactions
Some issuers allow you to receive a statement credit—an automatic credit to your monthly bill—for transactions like flights, ridesharing apps, and rental cars. While your issuer will apply the credit to your bill automatically, you’ll need first to determine which transactions you want to receive the credit for and make the request online.
7. Unlock Other Travel & VIP Experiences
Many travel credit cards allow you to redeem rewards to unlock other travel experiences, such as seat upgrades, priority boarding, and free baggage. Some travel cards also offer travel services like cruises, tour packages, car rentals, and dining at certain hotels or restaurants. Concert and sporting event tickets may also be available with points.
8. Buy Merchandise and Subscriptions
Redeeming points for merchandise can be a lucrative option if your issuer offers items that benefit you or your business. Also, if you regularly pay for subscription-based services, such as Netflix or Spotify, using your points to help pay for them can be a valuable way to redeem your rewards.
9. Transfer Your Points to a Loyalty Partner
Some rewards programs allow you to transfer your points to a loyalty program with an airline or hotel. Redemption values may vary when you transfer credit card points, so be sure to research the loyalty program’s terms and conditions.
10. Donate Your Points to Charity
If you don’t want to use your rewards for yourself or if your rewards are expiring, you can make a donation to a charitable cause. Some issuers have their own partner charity programs from which to choose. It’s important to check if your issuer requires a minimum number of points needed for a donation.
Best Ways to Earn Credit Card Points
- Day-to-day spending: To earn more points, it’s best to use your card for your day-to-day expenses like groceries and gas. You can also use your card to pay for your utility bills.
- Lucrative sign-up bonuses: You can also earn more points through issuers that offer sign-up bonuses. You must meet a minimum spending requirement within the first few months of card ownership to earn the bonus.
- Milestones or annual bonuses: Some issuers incentivize cardholders for hitting certain milestones or with annual bonuses. Milestones and annual bonuses are a great way to earn another handful of bonus points.
- Adding authorized users: As a primary account holder, you can add authorized users to your account. Some issuers will give you bonus points for adding an authorized user who is then approved for the card.
- Participating in loyalty programs: Most issuers will let you transfer your rewards to their loyalty partners. By participating in eligible loyalty programs, you can transfer points easily and maximize your rewards by increasing your redemption value.
- Credit card application referrals: Some issuers will reward you for referring a friend or colleague. When you join your issuer’s referral program, you will have your own unique referral link that your network can use when they apply for a card. You will receive your referral rewards if and when they receive approval.
The type of credit card you own often determines how you can redeem your points. For example, cash back credit cards refund a small portion of your purchases while travel credit cards let you redeem rewards for travel-related expenses like flights and hotels. Your spending habits and personal preference typically determine the best way to use credit card points.