Three easy ways to buy gifts with credit card points

Two in five Americans are planning to Spend less this holiday seasonCreative ways to buy gifts without spending cash are likely on the minds of millions of consumers.

Credit card rewards programs are one of those ways. They give you the chance to redeem cash, points or miles earned from spending for a variety of gifts, including cashgift cards, merchandise and Travel,

Yet using your credit card rewards can be an overwhelming experience if you’ve never done it before, as major rewards programs from issuers like Chase, Capital One, and Bank of America often have rewards portals with redemption options.

Knowing which redemption offers the best value can help you get the most of your money and get the perfect gift.

Travel

Many common credit card rewards programs allow you to transfer your points or miles to a travel partner. Some hotels and airline travel usually also offer rewards cards. If you have a hotel or airline rewards card, the points or miles you earn are usually automatically transferred to your hotel or airline account.

If yours is a general rewards card that isn’t specific to a certain travel or hotel brand, it’s a little harder to earn points for a hotel or airline. However, you get the freedom to transfer points to whichever brand your rewards program works with instead of a single brand.

For example, the Chase Ultimate Rewards program allows Chase Sapphire Preferred and Reserve cardholders to take points and transfer them to hotel and airline rewards programs like Southwest Airlines, JetBlue Airways, Hyatt, and Marriott.

According to the personal finance site, redeeming your rewards for travel generally offers the most value compared to other options such as converting points to cash, purchasing gift cards or purchasing merchandise. shreyakarmaIn fact, giving someone 10,000 World of Hyatt points gives an average value of $164, Credit Karma noted,

The trick to gifting travel rewards is to get points or miles into the recipient’s account. According to loyalty program experts prize purseThe following travel brands allow you to transfer gift points from your loyalty account to someone else’s:

Each of these programs has limitations and restrictions, so make sure you understand them before transferring rewards.

If you’re not sure whether your recipient prefers airline or hotel points, you have another option to transfer points.

If you and your recipient are part of the same credit card rewards program, there’s a good chance that your card issuer will let you transfer points to their account so they can use them as they wish.

gift card

a fresh survey Wells Fargo found that gift cards are the top choice for present recipients, beating out physical gifts by 56 percent to 55 percent.

Most credit card rewards programs let you redeem your points or miles for gift cards. The process is generally easy – open your rewards portal, search for the gift card you want to purchase and then use your points to purchase the card.

You can typically choose from a variety of dining and store options like Target, Apple, Sephora, Nordstrom, and Chipotle.

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While gift card redemptions don’t offer nearly the average value of travel redemptions, they can offer more than redemptions for cash. In many cases, your credit card rewards portal will sell certain gift cards at a 10 percent discount.

So, if you normally need 10,000 points for a $100 gift card, you’ll only need 9,000 points. That’s well below the average value of $174 you’ll get for a Hyatt transfer, but above the value you’ll get for a cash redemption (typically $100 for 10,000 points).

cash

Cash is the gift your friends and family want most but are too shy to ask for.

In fact, 65 percent of people prefer receiving cash because they can use that money to buy what they want, and 36 percent of people prefer cash because they don’t like most of the physical gifts they get during the holidays, Wells Fargo said.

In most cases, it only takes a few clicks to redeem your points for cash. Typically, you can redeem at a rate of one cent per point, which means 10,000 points will be equivalent to $100 in cash.

Additionally, some credit cards, such as some Capital One and Chase cards, allow you to apply the cash value of your points to previous purchases.

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