Redeeming credit card points for gifts is a unique way to help reduce some of the stress of the holiday shopping season. That could mean redeeming rewards for gift cards, travel, merchandise, and more — and an opportunity to keep some cash in your wallet.
You can also earn valuable points and miles on your holiday spending by using rewards credit cards to make all your purchases. And if you take advantage of targeted card offers and discounts, you can avoid dipping into your holiday budget too much.
Depending on your credit card and card issuer, you can redeem points, miles, and cash back in different ways, such as gift cards, statement credits, and travel. You can also redeem rewards directly for merchandise, but this typically provides less value than other options.
Gift cards are popular gifts because they’re easy and convenient. In addition, you have plenty of retailers to choose from, including Apple, Amazon, Target, Instacart, Google Play, Best Buy, Cheesecake Factory, and more.
Most credit card issuers provide straightforward redemption values for gift cards, such as 10,000 points equaling $100 in gift card value. However, this can vary depending on the rewards program.
Amex offers up to $100 in gift card value for every 10,000 points redeemed, which means you may get different values depending on the gift card. For example, you can redeem 10,000 points for a $100 Olive Garden gift card, but you’d only get a $70 Starbucks card with the same amount of points.
With Chase Ultimate Rewards points, the ratio is typically 1:1; 10,000 points normally equals $100 in gift cards. Chase occasionally offers gift card sales, where you can get more value from your points, such as redeeming only 900 points for a $10 gift card.
Read more: Amex points vs. Chase points: Who has the best rewards program?
Statement credits and bank deposits
Most cards provide the option to redeem credit card points for statement credits. In some cases, you can also redeem points for deposits into checking or savings accounts.
These are some of the most flexible redemption options available; however, they may not always offer the best value. Still, you can make any eligible purchase on your credit card and use a statement credit or bank transfer to cover it.
The rewards ratio for statement credits is typically 1:1, where 10,000 points equals $100 in credits. However, with Amex Membership Rewards, you typically receive $60 for every 10,000 points redeemed.
Read more: Here’s how much AMEX points are actually worth
Consider using your travel credit cards to gift a loved one a flight or hotel stay. You can use your rewards for travel redemptions, typically through a credit card rewards portal. Most card issuer portals are easy to use for booking travel since they function similarly to platforms like Expedia and Booking.com.
Read more: How do travel credit cards work?
Travel redemptions primarily use a 1:1 ratio (10,000 points equals $100), but it can vary by card. For example, the Chase Sapphire Preferred® Card can provide up to 75% more value with Points Boost when redeeming points for select bookings through Chase Travel℠. Therefore, 10,000 points could be worth $175 in this scenario.
Many cards provide ways to use points to make online purchases, including redeeming rewards for purchases at Amazon.com. With Chase, you can also use your points to partially or fully pay for an Apple purchase, getting $100 per 10,000 points if you use the Chase Ultimate Rewards portal to shop for Apple products.
However, we generally don’t recommend redeeming credit card points for merchandise as this method often provide less value. On Amazon, for example, you only receive $8 for every 1,000 Chase points, and $7 for every 1,000 Amex points. You’d get more value from your points by redeeming them for a statement credit.
If you’re in a giving mood, some cards provide an option to redeem your points for charitable donations. You could turn this into a gift for someone else by letting them know you’ve donated to one of their preferred or favorite charities.
Putting all your holiday shopping on a rewards credit card lets you earn valuable rewards for purchases you’re already making.
For instance, booking a $10,000 family vacation with a 2% cash-back card would net you $200 in rewards. That’s not bad for something as simple as moving your spending from debit to credit cards.
The best time to earn a credit card welcome offer is when you know you have upcoming expenses.
If you apply and get approved for a new credit card that earns rewards, it will likely have a sign-up bonus with a spending requirement. Sometimes, you might have to spend up to $4,000 or more in a few months after you open a new account to qualify for a welcome offer.
While that amount of spend might not always be feasible with everyday expenses, the additional holiday spending could help you hit the mark.
Many credit card companies — including Chase, American Express, and Citi — provide targeted card offers to their cardholders, which they can use to save money at various stores and retailers. This perk is freely available in card accounts, but you typically have to select offers before they can be used.
Read more: Best American Express credit cards
For example, you can browse different Chase offers on Chase.com or in the Chase app and select the ones you want to add to your card account. You would then need to use the applicable card at the specified retailer to receive your discount. You can find different offers on different Chase card accounts.
Related: Best Chase credit cards
The Chase Freedom Flex℠ and Discover it® Cash Back provide bonus points and cash back on rotating quarterly categories. During each quarter, you can earn bonus rewards in those categories if you activate the promotion.
It’s common for these cards to have categories that align well with holiday shopping during the holiday season. Some of the categories we’ve seen during the fourth quarter in the past include Amazon.com, Target, and PayPal.
One of our favorite ways to earn extra rewards on purchases is to use shopping portals and rewards credit cards while shopping simultaneously.
An online shopping portal is a website, app, or browser extension that gets a commission when it sends shoppers to a retailer’s website and they make a qualifying purchase — the shopping portal then shares that commission with you as cash back or another type of reward.
It’s free and easy to use most shopping portals, and it’s worth signing up if you do a lot of online shopping. We find that browser extensions are often the most convenient way to implement shopping portals in our everyday shopping routine.
Popular online shopping portals include:
Rakuten
TopCashback
BeFrugal
RebatesMe
RetailMeNot
Active Junky
Alaska Airlines Mileage Plan Shopping
American Airlines AAdvantage eShopping
Delta SkyMiles Shopping
JetBlue TrueBlue Shopping
Southwest Rapid Rewards Shopping
United MileagePlus Shopping
You can’t use multiple shopping sites for the same purchase, so it’s often worth checking a site like Cashback Monitor to see which portal offers the best return at a specific retailer.
Different types of card protections can help protect your expensive holiday purchases. Common credit card protections include:
Purchase protection: Protects eligible new purchases against damage and theft.
Extended warranty coverage: Typically extends the manufacturer’s warranty by an additional year.
Cell phone protection: Protects eligible cell phones against damage and theft.
Read more: Get the most from your cards: How credit card protections work
Annual fee
$95
Welcome offer
Earn 75,000 miles after spending $4,000 on purchases in the first 3 months – that’s equal to $750 in travel
Rewards rate
5x miles on hotels, vacation rentals, and rental cars booked through Capital One Travel2x miles on all other purchases
Why we like it for holiday shopping: The Capital One Venture Rewards’ earning rate makes it easy to earn miles no matter the category of retailer you’re buying from, whether it’s dining, entertainment, online shopping, or something else.
Read our full review of the Capital One Venture Rewards Credit Card
Why we like it for holiday shopping: Few cards can match the earning potential of the Prime Visa when making purchases on Amazon.com. Considering some people do all their holiday shopping on Amazon, this is an excellent card to think about.
Read our full Amazon Prime Visa card review
Annual fee
$0
Welcome offer
Earn a $200 bonus after you spend $500 in your first 3 months
Introductory Purchases APR
0% Intro APR on Purchases for 15 months
Ongoing Purchases APR
18.74% – 28.24% Variable
Why we like it for holiday shopping: The Chase Freedom Unlimited offers a generous intro APR on purchases. If you have upcoming large purchases during the holiday season, the Freedom Unlimited could help you avoid paying interest on those purchases for a while.
Read our full Chase Freedom Unlimited review
Why we like it for holiday shopping: If you prefer earning cash rewards, the Wells Fargo Active Cash provides a straightforward and rewarding earning rate that works in any eligible purchase category.
Annual fee
$325
Welcome offer
You may be eligible for as high as 100,000 Membership Rewards® Points after you spend $6,000 on eligible purchases in the first 6 months (welcome offers vary and you may not be eligible for an offer; apply to know if you’re approved and find out your exact welcome offer with no credit score impact; if approved and you accept the card, your score may be impacted)
Benefits
Earn up to $10 in statement credits each month when you pay with your American Express Gold Card at Five Guys, Grubhub, The Cheesecake Factory, Goldbelly, and Wine.com (enrollment required)Up to $100 in annual statement credits ($50 semi-annually) when you use your American Express Gold Card on eligible purchases at U.S. restaurants on the Resy app or Resy.comUp to $84 per year ($7/month) in statement credits after you enroll and pay with your American Express Gold Card at more than 9,000 U.S. Dunkin’® locations (enrollment is required to receive this benefit)
Why we like it for holiday shopping: The Amex Gold is an excellent card for earning rewards on dining and groceries, two popular holiday spending categories.
Read our full review of the American Express Gold Card
With a few exceptions, you typically can’t transfer your credit card rewards directly to another person for free. Chase points can be shared between different accounts of members of the same household.
It’s also possible to convert your rewards to points or miles and then combine or transfer them with certain loyalty programs. For example, Hilton Honors lets you pool points for free with up to 10 other members. You can also transfer your points for free to friends and family members.
We recommend using rewards credit cards for all eligible holiday purchases as long as you pay off your card balance each month. Credit cards can provide valuable rewards and protections you wouldn’t receive from using cash or debit cards.
Statement credits, gift cards, and travel often provide the most value for your credit card points redemptions. Statement credits are flexible because you can make any purchase and redeem points for a statement credit to help cover that purchase. Merchandise and online shopping typically provide less value and should be avoided in most cases.
This article was edited by Rebecca McCracken
Editorial Disclosure: The information in this article has not been reviewed or approved by any advertiser. All opinions belong solely to Yahoo Finance and are not those of any other entity. The details on financial products, including card rates and fees, are accurate as of the publish date. All products or services are presented without warranty. Check the bank’s website for the most current information. This site doesn’t include all currently available offers. Credit score alone does not guarantee or imply approval for any financial product.
