How To Use Credit Card Points

Earning credit bill of fare points is fun, simply redeeming your points to get discounts or free stuff like travel, gift cards, merchandise and more, is truly satisfying.

No matter what blazon of rewards menu you accept, knowing how credit menu points work and strategic ways to make utilise of them will assist y'all keep more than money in your pocket and maximize your perks.

» More than: Not into points? Check out the all-time cash-back credit cards in Canada

1. Know how credit card points work

With nearly rewards credit cards, you'll earn points with every purchase. Some purchases earn you more than points than others, and you may also be offered a welcome bonus worth thousands of free points.

Points can and then be redeemed for free stuff depending on the type of credit card you chose. For instance, a travel card may allow you to redeem your points for costless flights or hotel stays, whereas a general rewards card may let you substitution points for costless gift cards or merchandise.

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2. Summate the value of your credit card points

To make the nearly of your credit card points, you need to figure out the value of a bespeak, or what each point is worth in Canadian dollars. This will go far easier for you to compare different redemption values and then yous tin can make the virtually of your rewards.

Some credit card issuers make information technology piece of cake. For example, y'all might exist able to redeem 10,000 points to go $ten off groceries. Alternatively, a travel rewards program may allow you to redeem 1,000 points for $1 off a travel purchase. In both cases, i bespeak has a value of one cent.

But it's non always that like shooting fish in a barrel. Since not every redemption plan uses nice round numbers, utilise the following formula to effigy out the value of i signal:

Cash value of the redemption x 100 ÷ number of points required = value per point

And so allow'south say your travel rewards program will accuse yous 23,000 points for a round-trip flight between Toronto to Vancouver that would otherwise toll $489. Your formula would wait like this:

$489 ten 100 ÷ 23,000 = 2.thirteen cent value per signal

Note that if you lot'll need to pay any additional fees or taxes on top of your points redemption, you would non include them in the redemption value since you'll pay them out of pocket. All the same, you would add the taxes to your calculations when redeeming points for a product that you would typically pay taxes on.

Let's say you live in Ontario, for case, and yous want to utilise twenty,000 points for a blender that retails for $149.99 plus tax. Since the tax rate is thirteen% in Ontario, you would add that to the retail price when determining the blender'due south value. In this case, it's $169.49. Your formula would then be:

$169.49 10 100 / 20,000 = 0.85 cents per point

If you were deciding whether to redeem your points for the flight vs. the blender, these calculations get in easy to see that the travel redemption yields a much higher value per point.

» More than: How to apply a credit carte du jour similar a pro

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3. Empathize your credit card point redemption options

What y'all can redeem your credit carte points for depends on your card and loyalty plan. It's e'er worth looking into the details of the program earlier signing upwards for a rewards credit carte. Some mutual types of credit carte rewards include:

Travel: This could include flights, hotels, and even car rentals.
Gift cards: Most loyalty programs allow you to redeem your points for gift cards at diverse merchants.
Merchandise: In that location's frequently an online catalogue with hundreds of items yous can buy with points. Some programs even allow yous to redeem groceries.
Events: Some programs allow you to redeem your points for tickets to concerts or sporting events.
Statement credit: Utilise your points to pay downwards your remainder.
Financial products: A few programs permit yous to turn your points into cash, which is and so deposited into an investment account.
Charitable donations: Some loyalty programs allow you to donate your points to partner charities.

» More: Rewards credit cards vs. cash-back credit cards

4. Be aware of point expiration dates

Travel rewards points typically expire after a certain amount of fourth dimension if you don't use your account regularly. For example, many travel credit carte programs state that your points will elapse after 18 to 24 months of account inactivity. Nevertheless, all information technology takes to reset that agenda is a unmarried transaction.

If yous have a rewards credit card issued by a banking company, your points typically won't expire equally long as your card is active and in expert standing. If you're worried nearly paying the annual fee on a menu you don't use that often, you might choose, or consider switching to, a no-fee credit card.

Other smart ways to employ credit bill of fare points

Transfer your points: Some credit bill of fare points can be transferred to other travel loyalty programs, where they may even be worth more.
Get to know your loyalty programme: Nearly rewards programs have a sweet spot where your points could be worth more than, such every bit an online shop or a particular hotel concatenation.
Seek out limited-time promotions: Many loyalty programs run occasional promotions where you'll get a discount on specific redemptions. For example, gift cards may require thirty% fewer points.
Wait for a dream redemption: Instead of using your points as shortly equally y'all can, consider saving them upwardly for a reward that requires a lot of points, such as a concern grade flying, which may be worth more than to you and offer the all-time redemption value, like with Aeroplan.