Did you open a travel rewards credit card as you approached retirement, with hopes that the golden years would be filled with cruises and visits to your grandchildren? Given the past year, you may be sitting on a stack of points with some serious questions about when you’ll be able to turn those miles in, so we wanted to provide you with options for how to use them if you may be looking for some “found money.”
1. Use points for Amazon purchases
A majority of travel rewards holders, as many as 40%, say they have already cashed out their credit card rewards during the pandemic, while 23% say they are researching their options. A popular option for many people is to convert credit card rewards to Amazon spending.
Not every card will allow you to use your points to make purchases on Amazon, but for those that do, the process is simple — add your eligible card as a payment method on Amazon, then apply points from this card to your purchase during the checkout process. You can typically use your points for most Amazon purchases, excluding Amazon Fresh purchases and digital products such as Kindle downloads, music and magazine subscriptions.
2. Treat yourself to takeout
U.S. Securities and Exchange Commission filings show revenue of the top food-delivery services rose a collective $3 billion in the second and third quarters of 2020. If you’ve jumped on the takeout bandwagon, there’s a chance you could offset some of your dinners at home by using your credit card points. If it helps, you could always order cuisine from the destinations you plan to travel to after the pandemic — think of this as your market research.
Chances are your travel rewards card allows you to redeem points at some restaurants. You’ll have to check your exact loyalty program to know if points can be used for all restaurant spending or if redemptions are limited to certain establishments. Typically there are no stipulations as to whether this has to be dining in or taking out. Some rewards cards also allow you to redeem points with third-party delivery services. Also, if you have a credit card that offers Uber points, you might be able to use those for Uber Eats instead of rides.
Typically, when you elect to use points toward restaurants or food delivery services, you’ll get a statement credit several days after your purchase.
3. Earn cash back
If you have a credit card that offers cash back, this might be the year to take advantage of that feature. Depending on your card, you can typically receive the funds as a statement credit or as an actual check or bank account deposit.
Choosing to redeem your cash back instead of using your points for rewards or travel could mean you’ll get less value overall per point. Also, some credit cards only allow you to redeem points for cash back once you have accumulated enough points to meet a certain threshold. However, if your points are set to expire, or if you have expenses you want to cover this year, it could be a smart option.
You can check to see if your card allows you to redeem points as cash back by logging into your rewards account or calling your card issuer (you should be able to find the number located on the back of your credit card).
4. Donate to a charity
More than half of American charities expected to raise less money in 2020, and again in 2021, than they did before the pandemic. If you’re looking for a way to make a big impact with your rewards points, consider converting them into charitable donations. Most credit card loyalty programs now have charitable options, which you can access via the website. After logging in, select the charity you wish to donate points to. Keep in mind that you won’t be able to deduct the charitable giving of points from your income the same way you could deduct a cash donation.
5. Purchase gift cards
Data shows Americans are still unsure of when they will start traveling again — in the middle of 2020, 35% said they might fly by the end of the year, while 34% said they definitely wouldn’t. Those numbers seemed to hold throughout the year, as even during Thanksgiving, typically the largest travel holiday for Americans, 29% opted to stay home. If you’re still unsure about travel and have points that are expiring, another option is to consider converting them to gift cards.
In some cases, you might get better value for buying a gift card with your points rather than asking for cash back, and you can spend the funds on a gift card in a similar way to how you would use a debit card. If you’ve taken on a new hobby in the pandemic, or a home improvement project, these gift card funds could help pay the way.
Jolene Latimer has her master's in Specialized Journalism from the University of Southern California. She writes about personal finance, marketing and sports.
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