Redeem Your Rewards: How to Use Credit Card Points

[00:00:00] Welcome to The More Sense Than Dollars podcast, Where Your Hosts, Nick and Harry. What's up everybody? Got another episode for you. Are you ready to talk about Credit Card Points, Nick? I love Credit Card Points. Yeah. The earning is nice, but the spending is nicer.

[00:00:31] So this episode is about, it's well, it's a continuation of the Credit Card Series, which are always our most popular episodes. He'd love them.

[00:00:40] And so we've spent a lot of episodes talking about how to accrue points and earn them by optimizing which card you're using for which type of category, all that. So taking advantage of sign-up bonuses? Exactly. So those two.

[00:00:56] And so if you followed all that advice, you're probably sitting on a good amount of points in these credit card portals that you have. So question is now what? What do I do with them? How do I redeem them? How do I get maximized my value?

[00:01:10] And we are here to answer those questions. But first, I want to hear your piece, your two cents. What's on your mind? So this is about making excess payments on loans.

[00:01:28] And so my little piece here is specifically about student loans, but the same idea applies to most debt obligations. Where you may think, you may think if you're just putting an acu-y already pay your monthly payment, but for some reason you want to pay a little extra.

[00:01:47] Maybe you're trying to pay off a loan, something like that. You may think that that just automatically gets applied to what you owe, the principle of the loan. But most places don't do that by default.

[00:02:02] A lot of them, what happens when you pay extra is they apply that to future months minimum payments. So say your paying 250 a month and you pay a thousand, they just instead of like actually reducing the amount you owe,

[00:02:18] which saves you on interest and saves you so money, they just say, hey, we'll hold on to that extra 750, like they're doing you a favor. And we'll just apply it to the next three months. And you go back to the other two.

[00:02:32] And you go back to the other two. So you can tell them too. But after telling. You know, I think it's a little shady because it hurt, it only hurts you.

[00:02:43] All right, like you may think you're putting a little bit of an extra dent in the principle so that your interest is going to be a little lower because you don't know as much. And that's not what's happening.

[00:02:53] But my real right here is that NellNet who is now my student loan service thereafter, you know, thousand different changes over the last 10 years. There option to select that setting to not advance my due date does not work. Wow, that's annoying.

[00:03:13] You check off the box you hit save. It does not save. It says that it could take up to three days for changes to be reflected. It's catching they're not reflected.

[00:03:25] So I'm going to a little bit of back and forth with their support because when I brought up this issue, they just sent me back instructions on how to select that check box.

[00:03:35] And I said, I know how to select the check box, the problem is it's not working. And we're a bit of an impasse. But I'd like to pay off some of my higher, some of my student loans from the Fed are so low in interest rate that

[00:03:52] it's cheaper to just pay them in a month and invest the rest. But a few more little higher. And I want to pay those off and they're playing games. That's very annoying. That's a good one. Yeah, good gripe. Something to be on the lookout.

[00:04:07] I'm sure a lot of listeners are also being service by them now that are one of the other federal loan services. What about you? Oh, I'm excited about the, I've been buying tickets to a lot of concerts and events and things lately

[00:04:22] trying to go to more concerts and events and things that either through live nation or ticket master. So I'm really excited about the lawsuit that the Justice Department just brought against them and anti trust, anti monopoly lawsuit because live nation owns ticket master and they own most venues.

[00:04:43] And so the fees that they can charge is like if you want to go to that game that's port support and to concert or whatever, you have to pay that all those service fees. And so I'm excited to see where this lawsuit goes.

[00:04:59] Hopefully they break them up, create some more competition. You're going to drive these down. Well, let's see what happens there. Okay. So I was mentioning before you got some credit card points built up or will loop loyalty program points in here as well.

[00:05:19] There's, you know, distinction there but say you've got some points and you want to, you want to use them. So first you have to know how many points you have and access them.

[00:05:32] And so you want to talk through that like just the basics of how do I know how many points I've got. Right. So you're going to, you're going to have to go to the source.

[00:05:43] So whether you're using the loyalty program from like a specific airline or hotel or Amtrak, has it. You would go to that site, you know, sign in to your count and view it that way.

[00:05:58] Where our real focus here because where you tend to build up the most rewards points is through your credit cards. And so for that, you're going to log in through your credit card provider. And it's a little, it confused me a little bit at first.

[00:06:14] Way back when is that you can usually see how many points you have just on your homepage. You know, go to chase sign in, same place you would look at your credit card balances.

[00:06:25] They're probably going to have some information on there about how many rewards points you have. But if you click to use them or view them or something from there, it's probably going to take you to their separate like rewards portal.

[00:06:39] You may even have to log into that rewards portal separately. And it's probably the same information, same password, same account. But that may not know that you're already signed in. All of the big ones have a separate one. Chase is separate, MX travel, capital 1, travel city.

[00:07:01] So yeah, you. So I sometimes you can link right to it, but sometimes you have to log in. So long stir shirt when I'm getting at you can log into the same place.

[00:07:13] You go to to pay off your credit card or check your balance and you can get to it from there. If you're doing this a lot and you know, you just want to get there as quick as possible.

[00:07:23] You can also go directly to their travel portal, their rewards portal and access it directly there. Instead of going to your credit card homepage first. All right, from there you're going to see the points that you have.

[00:07:39] One more thing I think that could trip you up a little bit is even if you have multiple credit cards with the same service or the points are tied to the card.

[00:07:53] You can transfer them between cards, but for me, for example, I have a Chase freedom and Chase Sapphire preferred. It shows separately the points that I have accrued on each of those cards. Yeah, good point. You need to transfer one to the other.

[00:08:08] But you're actually selecting which card do you want to use the points from?

[00:08:13] And so in my situation, I always transfer those points from the Chase freedom to the CSP because one of the benefits of the higher tier card like CSP is the points are worth more when you're deemed them. Yeah, that's the Sapphire preferred.

[00:08:28] You get a better, you know, let's 1.25 times right redemption, right? So, okay, so you see, you know, I logged into Chase. I've been using my card for travel and dining and all the right categories. I've got 100,000 points in here and I'd like to take a trip.

[00:08:48] Should I just go in and should I buy the trip with my card and then just use 100,000 points as a statement credit? Should I buy a gift card for Marriott and do it that way? Should I book it through the travel, you know, through Chase's travel portal? Right.

[00:09:12] What are your thoughts on the different options for it? It's how to redeem. This is where I can get a little messy because it's not a one size fits all answer. Think you just listed out the options for redemption.

[00:09:24] And what are you deciding between the ways you could use those points? You could pay off something, you've already. You could pay off your balance on the card with those points.

[00:09:34] You could buy a gift cards like you mentioned or you could use those points to book something directly. And the way that the value you're going to get for those points is going to differ.

[00:09:47] But usually using those points to book travel directly is going to get you the most bang for your buck. Yep, because if you, you know, generally speaking points are worth one cent each.

[00:10:00] So, you know, say you booked a whatever you're going to pay off travel of a hundred dollars with points. That's going to take a hundred points. If you were actually booking travel with those points,

[00:10:15] there worth more like one and a half cents each or could be worth that much. It varies like we said, but you're getting 50% more for each point in that situation than if you used it to pay off your statement.

[00:10:29] Yeah, they want you to keep, they want to keep you within their. What do you call it? Ecosystems. Yes, thinking bubble but it's their ecosystem. So if you're booking with them, they get, they have deals with the airlines and hotels.

[00:10:46] So they get kickbacks and all that. So they're trying to push you to book and that's why they offer a higher redemption there. So yeah, I think most of the time, if you can, you should book through the portal, we'll get into transferring to other portals and things.

[00:11:00] But you're going to get more for your money. Higher redemption value by booking through the portal versus just taking a statement credit. They don't want to lower your statement balance. They want to keep it, they want to make it higher by booking through the portal. So right.

[00:11:20] Yeah. That's going to look. You know, if you're listening to this, if you're interested in and how this works, you've probably booked travel just separately before, right, directly on.

[00:11:33] They'd like JetBlue site or Delta or American, whatever any of these sites. It's the same idea, right? You put in where you're going, your dates, how many travelers you have.

[00:11:44] All of that same information you would put into a search tool when you're looking at flights is what the travel portal through your credit card is going to look like.

[00:11:55] I'm looking up the chase one right now and you have a tab for hotels, flights, activities, cars and cruises. Under each one, it looks the same as if I was on any of those, you know, Marriott site or Delta site searching for a flight.

[00:12:11] Right. And it's similar, maybe if you're using something like Google Flight, where it's, you know, searching all the different airlines at once. That's what these will generally be doing. One thing to point out, not every travel reward portal is going to support every airline.

[00:12:31] Right. Southwest isn't on a lot of those. Firemember correctly. Yeah. Depends on partnerships. We are. Right. So it depends on kind of who they have partnerships with, but usually you'll see the big ones there.

[00:12:43] JetBlue, American, Delta, United, even some of the budget ones, spirit, frontier are often there available to be used. The point, depending on where you're looking from.

[00:12:56] And really the only major difference you're going to notice from using one of those just regular public searches is that instead of the price is being listed in a dollar amount, they will list how many points it is going to cost you.

[00:13:11] Yeah. And it'll, it'll calculate the increased redemption for you. So you'll, it'll tell you your points are worth this amount of dollars.

[00:13:22] If you redeem it, but that's really it right once if you're, if you're going to do it this way, you pick use, you know, you book the flight and it just takes away from your points. Yep. You end lowers your balance.

[00:13:36] Book it say I'm using trace as an example of a keep it simple, but you book through trace at deducts those points from your balance. And you'll get a confirmation email say you booked a flight on JetBlue through trace.

[00:13:49] It'll take away your points and you'll get your ticket and email confirmation, all that usual stuff you would expect. You will get from JetBlue in this example, whatever your airline is, you'll receive all that information like normal. You just booked it through your traveler or watch portal.

[00:14:07] Okay. So now taking this a step further if we really want to optimize. So you've already optimized a bit by booking through their portal. But you're going to see things like transferring points. Now there's an option for when you're looking at your points balance options for transferring points.

[00:14:31] And that is to send it to another loyalty program. So you have your Chase Ultimate rewards points, so your AMX membership rewards points. You can send them one to one almost always point for point two Delta sky miles to Marriott Bonvoi points, depending again depending on the partnership.

[00:14:58] But you can send those to airlines, hotels and track. There are any other ones, maybe rental car companies like her or something. And it's just basically that's already set of I guess, but you're transferring from the credit card company to a specific travel partner.

[00:15:18] You cannot transfer them between the credit card companies and combine points. Right. You could, if you have points in multiple credit card rewards portals, you could transfer all of those.

[00:15:34] Say you take all of your capital on points, all of your Chase Ultimate rewards and you transfer all of those to the Marriott Bonvoi program. That's one way you can consolidate them in an external partner. Yeah, that's good point.

[00:15:49] And sometimes they'll do like bonuses. I think I saw recently JetBlue was offering a 25% bonus for any Chase points you transferred. So like between a window, a few months it's like if you transfer anything, you get 25% more JetBlue. Or do they true blue points for the points?

[00:16:11] You got to look at those promotions and things that come up, but that's how you do it. You've got to have the loyalty programs like accounts set up with them, but you just send it over to that loyalty program.

[00:16:27] And that also works, you know, if you have maybe previously book travel through these specifics, you know, you've been traveling on JetBlue a lot. I've been using points and you've been building up some true blue points just from traveling with JetBlue.

[00:16:43] Transferring points is a way you can combine some of those credit card rewards with the points you've been earning with a specific loyalty program.

[00:16:53] Yeah, but maybe, you know, maybe you don't have enough points in your Chase account for this flight and you don't have enough points in the true blue account.

[00:17:02] But if you combine them, you would. And so you transfer the points out and then book through JetBlue in that scenario.

[00:17:10] It's usually pretty instant, too. So I guess don't do it until you're ready to book and so you don't have to go back and forth, but yeah, once you're ready to transfer it.

[00:17:22] And so the way to get the most value there is aside from those promotion bonuses, whatever.

[00:17:29] Is to check on as though you were going to book through Marriott or Hilton, how many points it costs from them. So for example, if a hotel cost 10,000 points, Marriott Bonvoy points for a night.

[00:17:47] But on Chase, it was showing as 20,000. Well, you could just transfer 10,000 Chase points to Marriott and it's like you're getting double the value of your Chase points because those points transferred one to one and it's half the price for Marriott points.

[00:18:07] You may have good point there where you only transfer the amount you need. Yeah, yeah, specific purchase because these aren't. It's not too a street the transfers, right? And once you once those points leave Chase, they never go back into the chase account.

[00:18:23] Those are now permanently Marriott Bonvoy points unless Marriott has agreements with some other partners, but it's never going to go back into the credit card portal.

[00:18:33] So generally speaking, make that comparison, figure out what rewards portal would be the best one to book from and then transfer if transfer if necessary just the amount you would need to complete that transaction. Yeah.

[00:18:49] But that's how you get really into it. You don't always have to go that deep with it, but if you could double or maybe even triple the value of a point, then that is worth while.

[00:19:01] Just doing a quick search, you know how when you're searching on Delta, you can search by points or by dollars. Look at how many skymiles points it costs.

[00:19:11] If that's less than what it is through AMX or capital one travel, then maybe it makes sense to transfer them over quick and just buy it with the Delta skymiles. So again, this is personal finance. We're not robots. There's human emotion and psychology in all this.

[00:19:30] If thinking about comparing the different portals, if thinking about transferring these points is stressing you out to the point where you say, I'm just going to let those points sit there.

[00:19:42] I'm not sure I'm using it the most efficient way. I'm afraid to touch it like when I'm going to forget the existence.

[00:19:48] But just spend the points through your travel portal. You're still getting to it value. You're still yet that you're still getting good value. We're talking about going the extra the extra mile getting the most bang for your buck, but I would say that the you're going to get a lot more value out of spending those points for travel.

[00:20:06] Then not using them to go somewhere because you're anxious about optimizing it 100%. Did we say that on average points are worth about a cent?

[00:20:19] Yes, they had mentioned that. You could divide your points by 100 and that's pretty good ballpark of how many dollars you have not including the extra redemption you get.

[00:20:32] So that's kind of the baseline. Like you said, that's one of the benefits of a lot of the higher tier cards with these companies if you have a higher tier card, do you get access to higher redemption value for your points?

[00:20:44] So again, you hear something like the MX Platinum that has was that $600 now, then you will fee or five thousand. Even more. $7.65 maybe. Okay, so that one keeps going up to say 700 for an annual card, you may think how are you getting value for that?

[00:21:03] If you're traveling a lot, you're getting 50% say you're getting 50% more per point and you're booking a lot of travel with your points. That can add up that really cuts into some of that. Definitely. In addition to all of the other benefits you get.

[00:21:23] Through doing an example, I was thinking of you booking your Vegas flight recently. Yeah, for that one we're going to Vegas to see Dead and Co at the sphere very excited about that.

[00:21:34] And I was playing around with my points. I hadn't spent points in a while, so I knew I had a lot built up but I wasn't totally sure how many I had.

[00:21:46] And the way I ended up handling that, I actually had JetBlue points through an old JetBlue card that I had forgotten about. I forgot I still had points left there. And so I had enough points we decided we're going through JetBlue.

[00:22:05] I had enough points on the JetBlue card to book one leg of the flight. I can't remember if it's a trip there back, doesn't matter. But so I used up all my points there and actually a note that we've missed out on here.

[00:22:19] You don't need to be able to cover the entire expense point. They will let you if you're a little short. They will let you cover that cap with just cash. And so I said, okay, let me use these points so I don't forget about them again.

[00:22:36] I think it was like five bucks left. I was missing five dollars worth of points. So I cleared that up to book a flight in one direction and then I used my capital one account to book the other direction.

[00:22:53] Something else that actually I was able to take advantage of once a year, if you have the venture x, you can take away three hundred dollars off of booking a flight through their travel portal. Or not a flight any of their travel options.

[00:23:08] So I was able to cut the cost of that flight by three hundred dollars worth of points and then cover the rest with the points I had available. Pretty nice. So you get a between two credit cards.

[00:23:23] You know, we've talked about churning and having multiple cards in the value there. Between two credit cards you got just by using them normally. You got a round trip flight to Vegas for free.

[00:23:36] Yeah, I think there was like 12 bucks. I think total between covering the points on one side and then sometimes there are like fees associated that you can't cover with points. So that might be another thing to be aware of. You might have like a ten twelve dollar.

[00:23:53] Right on top of what you're paying with the points, but again dramatically cheaper than if you paid for the entire thing using cash. So that's an example of how you can really cut down if you're planning a trip. Look at how many points you have.

[00:24:08] You can really cut down on the cost whether you put it towards the flight or the hotel or both or the rental car, whatever. You can really cut down on the budget of the whole trip by using points to pay for summer all the time.

[00:24:21] Yeah, and mix and match. You know, I think that example I just gave was Jet Blue both ways, but Doesn't have to be you don't have to book your trip round trip. You know, you can get two one way tickets.

[00:24:34] Whatever kind of matches to your points balance the best. But go play around if you, you know, if you have chase or capital one city credit or whatever it is, go play around in the portal and look at the redemption value.

[00:24:48] You can get how many points you have. And it's a good motivator too to make sure that you're spending the card on the right categories to maximize those points.

[00:24:57] So it's like, okay, I make sure I always use this for restaurants because I get three times points and I know that one day that can get me a round trip flight somewhere.

[00:25:06] Yeah, can be interesting too. And those portals will show you where it'll show you each transaction that generated points for you. Oh, yeah, that is cool to learn.

[00:25:15] So you can go back through and like you were just saying use that kind of form. Oh, it is like you may realize you're getting bonus points on categories. You didn't, you know, you weren't aware of.

[00:25:25] And it's like, oh, I get five X, I get five X points if I use this card for this. Like, I'm going to keep using it for that.

[00:25:31] That's how you can trick yourself. You go out to dinner and then you say, oh, I'm actually just collecting points for my vacation coming up. Right. That's or maybe maybe you're not lying to yourself, but you're not on your friends a little bit.

[00:25:48] And you're the guy that always, you know what, I'll put my card down. Oh, yeah, you're not all hand-to-leven mode or close.

[00:25:56] You know, like, I'll fall on that sword. But maybe you're at a six eight person dinner and you can rack up a lot of extra bonus points there.

[00:26:06] Don't be afraid to volunteer. Right. One more thing and that vein too, which maybe maybe some of you have connected dots here by now.

[00:26:17] But if you spend $2,000 on a business trip and they reimburse you for all two thousand of it, you're still getting the points on those two thousand dollars of money. So you can see the problem is that you have a corporate card. They get to use the right points.

[00:26:34] So it depends there, but you can see, you know, people at tend to travel a lot for work. One of the perks of that for them can be the fact that they're generating a ton of points.

[00:26:45] That's ton of rewards points. They can use in their personal lives for expenses that are being covered by their job. And getting status and things that some of those hotels and airlines as a whole probably whole episode we could do on that. Yeah.

[00:27:01] Okay. So hopefully you'll have a better understanding. It's not so scary to use these points to redeem them. These portals are pretty straightforward.

[00:27:08] User friendly. You just have to log into the right place and good luck booking travel and hopefully you'll get some good trips with those points you're in. Thank you very much for listening everybody and we will see you in the next one.

[00:27:24] You've been listening to the more sense than dollars podcasts.