Bonus offers to avoid: buying points, redeeming points for gift cards.

While earning points with a Rewards credit card is relatively easy, cardholders often run into trouble when it comes time to redeem these hard-earned rewards. Not only do frequent flyer and hotel loyalty programs come with limited cut-off dates and complex redemption rules, but even “simple” programs can limit your options to a few basic options that you don’t necessarily like.

From there, you’ll find that your glasses can even cost more or less depending on how you use them and when. Of course, these rules vary greatly depending on your card issuer and the type of bonus points you earn.

There are several redemption options that you should avoid if you have no other choice. Read on to find out which bonus points you should try to skip and when.

Redemption of goods

One popular redemption method that you should almost always avoid is merchandise, although this really depends on your rewards credit card and its rewards program. You should avoid exchanging your points for goods because you will almost always receive less than 1 cent each when you do so.

For example, the American Express Membership Rewards program allows you to shop with Amex points at various retailers. However, in doing so, you will only receive 0.5 cents per unit of cost. And if you pay with Amex points at the checkout at stores like Best Buy and Boxed.com, you’ll only get 0.7 cents per point.

Even Chase Ultimate Rewards points, which are worth 1 cent each when you redeem them for statement credits, offer a value of just 0.8 cents per point when you use them for purchases through Amazon.com or use them for purchases with PayPal.

Points transfers when travel is cheaper through the portal

Another ransom option that you should avoid is one that you will have to research beforehand. While flexible programs like Chase Ultimate Rewards and Amex Membership Rewards allow you to transfer points to frequent flyer and hotel loyalty programs, that doesn’t always mean it’s a good idea.

For example, let’s say you want to book a stay for two at the Holiday Inn Resort in Montego Bay, Jamaica this fall. If you choose to book through the Chase Ultimate Rewards portal, you can earn it for as little as 13,176 points per night with the Chase Sapphire Reserve Card.

However, the same hotel will cost you 50,000 IHG ​​One Rewards points per night if booked through the hotel program.

In this case, a free night will cost you more than 3x the points if you transfer them from Chase to IHG. Obviously you would be much better off booking through Chase and saving the extra points for something else.

Gift cards (most common)

While some programs allow you to redeem points for gift cards at a rate of 1 cent per point (or even more), there are others that offer you a raw deal if you choose this option. Also, please note that some credit card programs may give you different amounts of points depending on the type of gift card you choose, so you should check and compare options beforehand.

For example, exchanging Amex points for gift cards can earn you anywhere from 0.5 cents per point to 1 cent per point, depending on which you choose. However, Citi ThankYou and Chase Ultimate Rewards generally give 1 cent for all gift card options, as do most cashback credit cards.

Reportable credits (if less than 1 cent per point)

Both American Express Membership Rewards and Capital One Miles are known for offering less than average value when you redeem your points for statement credits.

In fact, you get 0.6 cents per point of value when you use Amex points to cover your card expenses, while Capital One offers just 0.5 cents per point if you choose a credit statement or check by mail.

bottom line

While using your points for any of these options may be better than doing nothing with them, you should always try to get the most out of your rewards. For the most part, it’s not that hard if you’re willing to do some math and do a little research before using them.

In the end, you should always try to get at least 1 cent per point of value for every point you use. If the buyout option you want has a lower cost, you should definitely think twice.

Holly Johnson is a financial expert and award-winning writer who is obsessed with frugality, budgeting, and travel. In addition to being the editor of The Simple Dollar, Johnson owns Club Thrifty and co-authored Zero Your Debt: Get Your Income Back and Build the Life You Love.