Don’t Overlook Cash Back Redemptions With a Travel Credit Card

Keith M. RossoMay 5, 2020
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The COVID-19 pandemic has substantially limited travel opportunities and caused income and economic uncertainty for many. Credit card miles and points you’ve been collecting for a vacation might seem unusable in the short term. However, depending on which travel credit card you’re using, you may have flexibility to redeem rewards you’ve been earning for cash back, statement credits or gift cards.

Cash back redemptions with transferable points cards are often overlooked because you get lower value than you would by using the same rewards for travel. That said, it could make sense to use miles and points for something other than travel during this challenging time if it will help you offset out-of-pocket expenses or add to an emergency fund.

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Options for transferable points programs

Many people earn credit card miles and points in a transferable currency because it offers flexibility to move points to various airline and hotel partners. Even though credit cards in these programs are marketed as travel cards, you can also redeem the rewards for cash back or a general statement credit.

Keep in mind, the value you'll get for your points this way is typically less than what you’d get by booking travel. However, depending on your situation, it could make sense to cash out your miles or points if you have a stash of rewards and a need for cash. Here are the point values for cash back or statement credit redemptions across the four major transferable points programs:

  • American Express Membership Rewards: Points are generally worth 0.6 cent each when used for a statement credit.

  • Capital One: Capital One Venture Rewards Credit Card holders can redeem miles for 0.5 cent each as a general statement credit toward your balance or as a mailed check.

  • Chase Ultimate Rewards: 1 cent each as a statement credit or direct deposit.

  • Citi ThankYou: 0.5 cent each as a statement credit or cash back.

It’s possible to potentially get more value redeeming your transferable miles or points for gift cards, which you can then use to shop online or at local restaurants or supermarkets. For example, you can find discounted gift cards available through the Chase Ultimate Rewards® portal, which can get you more than 1 cent per point worth of value.

You might also consider a product change to increase the value of your cash back rewards. It’s not guaranteed, but certain issuers may allow you to convert your travel card to a cash back card and carry over your rewards. Then, you might be able to redeem your rewards for a higher value to get cash back.

Alternative uses for airline miles or hotel points

It’s more challenging to cash out rewards if you have miles or points banked in a specific frequent flyer or hotel loyalty program. But there are a few programs that allow you to buy gift cards with your miles or points.

The redemption values aren’t great, but it’s an option worth considering if you have a stash of miles or points you don’t plan on using for award stays in the near future.

IHG Rewards

Folks with IHG points can buy gas station, retailer and restaurant gift cards through the IHG portal. You’ll generally pay a standard rate based on the value of the gift card:

  • 5,000 points for a $10 gift card.

  • 11,000 points for a $25 gift card.

  • 20,000 points for a $50 gift card.

  • 38,500 points for a $100 gift card.

Marriott

You can use Marriott points to purchase gift cards to use at popular retailers like Amazon, CVS, Starbucks and many others:

  • 10,000 points for a $25 gift card.

  • 17,500 points for a $50 gift card.

  • 30,000 points for a $100 gift card.

United Airlines

By using the United MileagePlus X app, you can use United miles to purchase e-gift cards at select retailers and restaurants, including Walmart. Denominations and points values vary by retailer.

The bottom line

While you won’t be maximizing your value of redemptions if you trade in your points or miles for cash, credits or gift cards, it is an option especially in times of financial uncertainty. As always, do your homework first and at least make sure you maximize your redemption within the individual program.

How to Maximize Your Rewards

You want a travel credit card that prioritizes what’s important to you. Here are our picks for the best travel credit cards of 2020, including those best for:

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