The Worst Ways to Redeem Credit Card Points
The redemptions to avoid
A few options reliably waste points. Merchandise through a rewards catalog often values points at well under a cent. Pay with Points or covering charges on transferable currencies (like Amex) can be worth as little as 0.6 to 0.7 cent. Many gift cards redeem below a cent too. These feel convenient but quietly throw away half your points value.
Why they are bad
Transferable points can be worth several cents each transferred to airline and hotel partners, so redeeming them for merchandise or to erase a charge at 0.7 cent means giving up most of their value. It is the equivalent of selling your points at a steep discount. The flat one-cent cash-out is the floor you should rarely go below.
What to do instead
With transferable currencies, redeem for travel through transfer partners, where the value lives. If you do want cash-equivalent value, take an actual statement credit or deposit at a full cent rather than merchandise or a discounted gift card. For plain cash-back cards, cashing out is fine since that is their full value. See what points are worth and redeeming for cash.
Frequently asked questions
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