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This question is one that I have received a c0uple times from people who hear or read about the great point/mile bonuses. They are intrigued by the possibilities available, but they do not have an interest in travel. While I do not understand why someone would not want to travel when they can do it for free, I do recognize that there are times when travel is impractical. In those instances, is it a waste to apply for these credit cards? Why use credit inquiries for one of the cards mentioned here instead of applying for a department store credit card?
First of all, if you are saving your credit inquiries to get some card like a Target or Barnes and Noble credit card, you are really only getting a very small bonus. Unless you are spending a lot of money at Target, the 5% bonus you get is not something that would excited most people. When I hear someone trying to get me to sign-up for a store card telling me that I can get a $25 gift card, I chuckle inside. In my life, I have gotten card bonuses that have given me a value of $7,000 for getting the card – a $25 gift card really is pathetic in comparison. Again, I realize that it may work for some people, but I wanted to give some thoughts to those of you who do not want to travel but would still like to learn how to get value from these card applications.
- Flexible Point Programs
You will notice the Canon camera. This is the bad part about using MR points for merchandise – that camera is the Canon ELPH 300s. American Express is “selling” it (all-inclusive – no tax or shipping) for 36,000 points. The problem is I can purchase it right now for $200 (after tax). That gives my MR points a value of .55 of a cent! That is at least 1/6 of the value I could get by transferring to Delta. So, that is not the best of deals.
They do have gift cards that you can redeem for and they often have promos where the gift cards are greatly reduced. For example, last year, they discounted the Cheesecake Factory gift cards to 5,000 points for a $100 card. That gives the points a 2 cent value. I was able to redeem for $200 in gift cards by using only 10,000 points. Using the offer currently available for one of Amex MR cards now, that would mean I could have received $500 in gift cards for the 25,000 point sign-up bonus! They had a similar deal recently with Old Navy.
In addition to merchandise and gift cards, you can also get certificates (for travel companies), experiences (like a create-your-own safari), and shopping at Amazon (you can link you Membership Reward account with your Amazon account).
The Good – You can get gift cards at a great rate during the times of their promos and you can get adventures/experiences that you would be unable to get otherwise for no out-of-pocket costs
The Bad – The point value to redeem through their mall is around an average of .65 cents per point. That is a horrible redemption rate – IF you are going to be doing travel. But, we are not discussing travel in this post, right? 🙂
Summary – American Express Membership Reward points have a lot of options with how you can redeem your points. If you are just looking to use the points you have and you are NOT planning on traveling, there are some good deals out there.
Chase Ultimate Rewards – This is my new favorite rewards program. They have a lot more flexibility with transfer partners and no excise fees for domestic airline transfers. They also have a great redemption mall. You can pretty much count on items in the Ultimate Rewards mall to give you at least a 1 cent per point value. You can also use your points to take money off of your credit card statement (again, at a 1 cent per point value). In addition, you can also get gift cards to a variety of places, again at a 1 cent per point value.
They also have activities and entertainment options for your points. You can get tickets to different events and sporting venues redeemable immediately or via a point auction. There are many changing events that are available through this portion of the site.
One of the best parts about the Ultimate Reward shopping mall was on Black Friday this past year. Their supplier of electronics is Best Buy and they had a 25% reduction in price that day. In addition to that, their online prices were tied to Best Buy’s holiday pricing. So, that meant people were able to get incredible values that day. For instance, a $1500 Macbook Air was available for 78000 points – putting the points at almost 2 cents per point value. That was an incredible option! They had TVs, computers, tablets, etc. With Black Friday 10 months away, this gives you plenty of time to start accruing those points. If you were to get the Chase Sapphire Preferred and the Chase Ink Bold, you would have 108,000 points if you just met the spending thresholds. That means that you could get electronics valued around $2,000 for free!
The Good – Excellent point value, special discounts, great products
The Bad – Unlike Membership Rewards, you cannot see what is available in the Ultimate Rewards mall unless you have a point earning credit card.
The Summary – If you wanted to get incredible non-travel value out of your points, this would be the option to go with.
- Airline Mile Programs
- Hotel Point Programs
So, hopefully there is enough information here to determine what to do with your points/miles if you do not intend on traveling. There are some good options and deals out there, but always remember that the best values are to be had through the travel side of the system. That is what the points/miles are for. However, the companies found that people wanted to use their collection for something different, so they found a way to clear the points/miles off of their books and let the consumer think they are getting a good deal. Having said that, value of points is determined by the bearer. So, if you want to sign-up for cards to get some great bonuses, remember there are some great options out there. My recommendation on what cards to get would be Southwest for gift cards (first purchase, 50,000 points); some type of Delta card for special experiences; and a Chase Ultimate Rewards card for merchandise.
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Editorial Note - Opinions expressed here are author's alone, not those of any bank, credit card issuer, hotel, airline, or other entity. This content has not been reviewed, approved or otherwise endorsed by any of the entities included within the post.
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