Tiffany Raiford
Everyone knows you can redeem credit card rewards for cash back and travel deals (think airline tickets and hotel deals), but not nearly as many people are aware that there are plenty of alternatives for those who do not think they spend enough to justify a card of this nature or those who don’t travel often. For example, did you know you can redeem your airline miles for a rental car? You might not travel often, but what happens when your car needs to spend a few days in the shop for something that is not covered by insurance and you need something to drive?
Did you know you can redeem credit card rewards for gift cards, goods and other merchandise? Did you know you can gift them to friends or family or purchase more and redeem credit card rewards for something even more amazing than you ever thought possible? I’m willing to bet that you have no idea just how many alternative methods are available to you when it comes to redeeming your credit card reward points, but that’s all right; I can tell you a few great alternatives. Perhaps one will inspire you to finally redeem credit card rewards for something you actually find useful in your life.
There are so many reasons to carry a major credit card from being used in an emergency (such as your debit card being stolen or lost or compromised and you needing an alternative method of payment in the moment until you can rectify that situation) to providing you with additional perks. For example, we bet you’re currently Christmas shopping for the people in your life who love things like electronics and new toys, and we bet you are purchasing the extended warranties on these items. Did you know your major credit card actually offers you the extended warranties on all purchases without paying a dime? That is a perk worth its weight in gold for anyone who purchases a significant number of toys or electronics.
If you are willing to ignore the fact that alternative redemption options are often not the most lucrative way to redeem credit card rewards, you’re going to find that you can really do some interesting things when it comes to redeeming those points.
Pay your Mortgage
Do you itemize deductions on your income tax return? Do you want to save money on your mortgage interest? If you answered yes to either or, you are in luck. Why not cash in your airline miles for rewards such as cash and use that to make one more mortgage payment this year than you might otherwise? Yes, I know that you already paid your December mortgage payment, but I’m asking you to pay your January a bit early, or just make an additional payment. You’ll have that much more mortgage interest to write off on your income tax return in a few months, and you’ll get to pay down your mortgage just a bit faster – if you do this every single year.
Pay your Student Loans
Anyone who ever had to pay for college courses on their own knows that student loans are the worst. They are a pain to deal with, they are a pain to redeem, and they are seriously just the most annoying in every possible aspect. However, that does not mean that you can’t do something useful with them and redeem credit card rewards points to pay them down. One good idea is to apply for a new card that offers cash back and send the cash back to your student loan issuer once you are eligible to redeem that cash back.
For example, Citi cards offer a Thank You Program designed to give all customers a chance to use their cash back to pay their student loans. You simple redeem credit card rewards cash back for a student loan check and the credit card company will actually mail the check to the student loan lender on your behalf. It is that simple and it is that effective. You can do this with any cash back card if you redeem credit card rewards for cash back and mail a check to the student loan company yourself.
Amp Up your Savings
This is my favorite way to redeem credit card rewards. If you have a cash back card, wait a full year before you redeem any of your cash back. Go ahead and charge everything throughout the year (I like to pay my mortgage for my main residence and our rental property, our utilities, our cell phone and everything else that we pay for with my card and then pay it off using cash at the end of every month) so that I spend as much as possible and earn as much cash back as possible. Then, at the end of the year, I redeem that cash back and put that check right into savings. It’s a nice way to add a little savings bonus to our lives and still get something for our hard earned spending throughout the year.
Be a Giver
There is nothing that makes you feel as good in life as giving to those in need. Sure, you can donate your time and money at church, the soup kitchen, the local shelter; wherever you want. Did you know, though, that you can donate your miles and redeem credit card rewards in the form of a donation? It’s easy; visit your credit card company’s website and find the different ways to redeem your points, look for the donation tab and go for it.
For example, Discover allows you to choose from their list of 1.5 million reliable and trustworthy charities when donating your points, miles or cash back, so that you are sure you are giving back to the right funds and the right people. It’s a nice way to do something good this holiday season and to feel good about yourself during the holidays. We’d recommend it every step of the way.
Trade them in for Gift Cards
Most major credit cards allow you to redeem credit card rewards for gift cards beginning at 5,000 points or even 2,500 points ($50 and $25 respectively) and even for more depending on how many points you have. Let’s say that you are looking for a way to make Christmas more affordable; why not sign up for a new credit card that offers you 50,000 reward miles as a sign-up bonus and use those to get yourself 10 $50 gift cards somewhere amazing. That’s $500 in gift cards. Sure, it’s a lot more in free airfare, but if you have nowhere to go, you don’t care. You just redeemed your points for something useful to your personal life.
Go Christmas Shopping
A cash back card is the best for this. We have friends that own a business and have a cash back card in their personal life and their business life. They spend a lot of money every year on their cards, pay them off each month and then cash in their earnings in November for cash back in December to shop with for Christmas gifts. They end up with thousands in cash back every year, and it’s a nice way to redeem credit card rewards for something useful.
Get Merchandise
Let’s say that you have an airline credit card. The best way to redeem credit card rewards with an airline is to book an airline ticket. However, you might not want one or need one. So, why not just shop merchandise? All credit card programs all their users to buy merchandise from various outlets, and that allows you to redeem credit card points for those. For example, you might find that you can purchase your favorite clothes from your favorite retailers, items from your favorite restaurants (gift cards and such) and other things when you use this method of shopping. Redeem your credit card rewards for things that you want such as electronics, clothing and other items if you are not into cash back or miles. It’s a method that works for many people.
There are so many different ways to redeem credit card rewards that do not mean you have to book a flight you don’t want or need to take, or earn cash back. You can get what you want and redeem credit card points for things you need if you only check with your credit card company to see what they offer in terms of point redemption for various cards. Consumers are often very pleased to learn that they can get a lot more of what they want, which is a nice way to inspire you to earn and redeem more points. Just remember to use your card responsibly, pay it off in full each month and make sure that you do not get yourself into debt for some free merchandise or cash back; that’s not productive and it makes your points worthless in the long run.
Photo by Getty Images
Comments
Loading…