Earning credit card rewards is the easy part, but knowing how to redeem them – and when to redeem them – can be the challenge. After all, you might be tempted to redeem your rewards whenever you feel like it, whether you’re cashing in points for gift cards or credit statements in your account.
You can also save up Reward Points for something special, especially if you’re saving up travel points to pay for flights, hotel stays or a relaxing holiday.
While there is no hard and fast rule for the best time to claim your rewards, there are a few factors you should consider along the way. Read on to learn about when is the best time to use credit card rewards, when to keep saving them, and how to decide when you’re on the fence.
When is the best time to receive rewards?
Although it is up to you to decide whether to redeem credit card rewards, there are certain situations where cashing out definitely makes sense. Just be aware that the scenarios below may or may not apply to your situation depending on the rewards credit card you use to earn points.
Your reward points are expiring
Not all credit card rewards expire, and this is especially true when it comes to points earned through flexible programs. For example, Chase Ultimate Rewards points will not expire while the qualifying account is open, and the same is true for points earned through the American Express Membership Rewards program.
However, many types of Air Miles and Hotel Points expire after 12-24 months of inactivity, so you should pay attention to your program’s rules. For example, AAdvantage US Miles expire if you do not earn or redeem a certain number of miles every 24 months, and the same period applies to points in the Hilton Honors program.
You can “reset the clock” on your points or miles by earning more or making a small exchange, and either option is better than watching your rewards expire.
Desired travel discounts available
If you’re focused on earning Air Miles or Hotel Points to redeem your travel rewards, find your desired premium seat or free nights, that’s another reason to use them right now. After all, many travel loyalty programs have moved from fixed reward tables to dynamic pricing, so there’s no guarantee you’ll find availability again at the price you’re willing to pay.
This is especially true when it comes to award flights in premium cabins, award flights on infrequent routes, and stays in hotels that book quickly or provide a limited number of award nights. If you find what you want and have rewards to book right away, you should.
You are about to cancel your credit card pretty soon.
When it comes to frequent flyer programs and hotel loyalty programs, your reward points are stored in your loyalty program account, regardless of the status of your credit card. However, other credit cards that earn points in their own programs (such as Chase Ultimate Rewards and American Express Membership Rewards) may forfeit your rewards if you close your credit card account.
What does it mean? If you plan to close your credit card account, you should cash out your rewards before you do so.
Another option is to open another credit card first, which will keep your points in the same program. For example, you can close The Platinum Card® from American Express to avoid the $695 annual fee if you have another open Amex credit card that earns Membership Rewards points, such as an American Express® gold card or credit card. Amex EveryDay® by American Express. To express.
You found a special offer
Sometimes rewards programs expand special offers that are hard to refuse. For example, Chase Ultimate Rewards sometimes offers discounts on Apple products redeemed through their portal, and they often discount some variants of their gift cards by 10%.
If you find a special and have rewards to burn, you can go for it.
Are you ready to go bust
Maybe you just feel like using your rewards for a trip you want or for some item you don’t want to pay cash for. These instances are definitely worth going through if you have a lot of bonus points that haven’t been talked about yet.
While you can always accumulate your Reward Points or get your money back, it never hurts to use them for something you really need. Remember that you can always get more rewards by using your card for recurring expenses or by signing up for a new credit card to get a big signup bonus.
When to save rewards
Maybe you’re someone who really enjoys watching your Rewards balance grow, or maybe you have other reasons to keep accumulating your points or getting your money back. Here are a few scenarios where saving might make sense.
You accumulate points for a certain redemption
If you’re looking at specific rewards, working hard to increase your reward balance makes sense. For example, you can book an award flight, which is usually 50,000 miles, but you only have 30,000 miles on your account. If you continue to use your Reward Card for recurring expenses and bills, you will eventually reach this threshold and be able to lock in your reward.
You want more options later
Another scenario where it might make sense to keep the rewards is if you want to have a lot of options later and there’s nothing you really want to redeem for right now. If you keep earning and saving, you will have more and more options to choose from when you are ready.
bottom line
No matter what anyone says, you can receive your rewards at any time. And while you can save up for something special, you should also remember that bonus points are vulnerable to inflation. This means that, just like the money you earn at work or keep in the bank, your points and miles may depreciate over time.
Whatever you do, you should take some time to familiarize yourself with the reward options available to you. From there, you can decide if you have enough money to redeem right now, or if you need to keep saving for travel, gift cards, or items you really want.
Also, make sure you maximize your rewards by using the right card for the right type of purchase. By earning and redeeming strategically, you can get more value out of your rewards credit card.
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