Get the Most Value from your Rewards Points

Posted :

Credit Card rewards points may not have any cash value, but they can be redeemed for anything from vacations to golf clubs. If you are calculated about the way you redeem your points, you can get a lot more out of them then you have been.

Strategists say that cashing in points for merchandise rewards is your worst option. Think back to when you were a kid playing at Chuck E. Cheese. It took a lot of quarters to earn enough tickets to get a stuff animal, when you could probably purchase a better quality stuff animal for under $10 at a toy store. The prizes at arcades are never equivalent to the amount of money spent attempting to earn tickets. The same is true with rewards points items.

The Nintendo Wii can be purchased for around $199 through retailers like Best Buy; however, you would need 52,700 Bank of America WorldPoints to purchase the console. This means that your WorldPoints are worth $0.004 each. Instead, use 25,000 points to buy a $250 Best Buy gift card. You can use the gift card to buy your Nintendo Wii, and even have enough change left to buy a game. That is a savings of 27,700 points.

The lesson is, no matter what type of points you have, switching your points for gift cards is your best bet. American Express offers the best rewards program, where your points will almost always be redeemable for one cent. Other cards fall short. "I recommend ditching the points and getting a cash-back credit card, which at the very least will earn you one cent for every dollar you spend," said Jeffrey Weber, CEO and President of Credit Card Depot Inc.

So think back to your childhood days of ticket collecting, and use those points wisely. They take a lot of time to collect, so make the payoff worthwhile.