Having a rewards credit card comes with a lot of benefits. From being able to improve your credit score to being able to access money whenever and wherever you need it, the value of credit cards is huge. But, the most appealing benefit of a rewards credit card is earning rewards every time you shop.
Most credit card companies award points based on the frequency of credit card use, attitude toward repayment, and other criteria as determined by the company.
Sadly, many Americans never redeem their credit card rewards. This is a boon for the credit card companies, but a bust for consumers. You may not realize that you can redeem your credit card reward points for almost anything—from airline tickets to paying for a new TV, shopping at a discounted rate at online stores, or even donating them.
Here are some ways to redeem your credit card reward points for shopping online.
1. Shop online
If you’re looking for a discount on your next online shopping spree or even looking for some cash back, your credit card rewards points can provide both. Some credit card issuers let you use rewards points to pay for all or some a purchase at select online stores.
2. Get cash back
Getting money deposited in your bank account or getting a statement credit is a great way to use your reward points. You can use the money to pay your bills, add to your savings balance, or reduce your credit card debt. You can also use the rewards to pay off part of your existing debt or move it into an account that pays you interest.
Credit card rewards can go a long way if you know how to use and maximize them properly.
3. Redeem your reward points for gift cards
Buying gift cards is an ideal way to use your credit card rewards. Gift cards give recipients value and flexibility. And many credit card companies join with retail stores to give you an extra perk when you redeem your points for a gift card. For example, redeeming $20 worth of rewards or points for a gift card, might get you another $25 gift card instead. And some card issuers let you redeem smaller amounts of points for gift cards compared with the points required for larger reward items. So you can get a gift card for a larger monetary amount for fewer points.
4. Get discounts on airfare and hotels
If you redeem your accumulated card rewards for travel, you can net hundreds of dollars in savings on airfare and hotel accommodations. The caveat is that travel-related rewards often require that you have a lot of points saved up. Travel rewards may also be subject to blackout dates, which may make this redemption option less desirable for some. But, if you’re willing to let your points add up and work around the blackout dates, you can get some great free travel. All you have to do is log into your online reward portal and get your discount.
You may also be able to use your rewards for car rental to create more room in your travel budget.
5. Donate your credit cards rewards to charity
You can share your rewards in more ways than just redeeming them for gift cards for others or yourself. You can actually donate rewards points from some cards to charitable causes. So, the next time your points are about to expire or you just want to share the wealth, donate your points to a charitable cause. Be aware though that some card issuers require a minimum number of points before you can donate them, so check before making any plans.
6. Pay off your balance
By avoiding the urge to spend more than you are able to pay back, you put yourself in a position to rack up more rewards. The more interest paid out every month, the less valuable the rewards become.
7. Narrow your spending
It is easy to forget the value of money when rewards come into play. The more credit cards you use, the fewer the rewards accumulating per card. You may want to focus all your spending on a card that has the best value in areas where you spend the most instead of spreading purchases across multiple cards, making it harder to earn rewards.
8. Watch for bonus offers
If you make a point for each dollar spent, you may be missing on some rewards. Card issuers roll out bonus offers all the time, so it is important to keep an eye out. Some credit card issuers give an increased rate in select areas.
Other credit card issuers give their user’s bonus offers through their website. Some of these include having double or triple cash back if the users shop through their online rewards platform.
Attach a monetary value to your reward points
If your card issuer gives you points, it is important you sit down to calculate the monetary value of these points to determine the best way to redeem them. The best way to do this is by dividing the cash reward you are trading in for the number of points it will cost you to trade for it. You could also consider getting a credit card that offers cash back without any point to cash conversion.
But the most important thing to remember when dealing with credit card companies is how important it is to read through the contract very carefully. It is essential to keep an eye out for any information relating to possible spending limitations attached to the rewards program, restrictions placed on redemption, or a possible expiration date linked to the rewards.
