A major factor that makes the best rewards credit cards stand out is the value you can get when you redeem your rewards. For example, the American Express Membership Rewards program is a popular pick not just because it offers a variety of redemptions options, but because you can get a ton of value from your points.
That said, not every redemption option will give you the same per-point value for your Membership Rewards. And the most lucrative way to redeem them can vary throughout the year. Here’s a look at the best ways to redeem your points right now.
One email a day could help you save thousands
Tips and tricks from the experts delivered straight to your inbox that could help you save thousands of dollars. Sign up now for free access to our Personal Finance Boot Camp.
By submitting your email address, you consent to us sending you money tips along with products and services that we think might interest you. You can unsubscribe at any time.
Please read our Privacy Statement and Terms & Conditions.
1. Use one point to get an Amazon discount
Most of the time, I advise folks to avoid paying with points at checkout — but this is the exception. Throughout the year, you can find special offers on Amazon.com that provide a big discount when you pay with Membership Rewards points at checkout. The best part of this deal? You only need to use one point to qualify for the discount.
The exact discount can vary, but the current discount is either 20% or 40% off of your purchase (max of $20 or $40, respectively). The deal is available until March 31, 2021, or until it’s been claimed by 17,000 users — whichever comes first.
You can use the deal across multiple purchases until you reach the cap. As noted, you only need to redeem a single point to get the discount, but you will need to use your American Express card to pay the remaining purchase balance.
You’ll know you’re eligible for the deal when you see an offer banner ad on your checkout page. Click the banner to activate the offer, and make sure your points-earning Amex card is listed as a payment method on your Amazon account. You’ll also need to enroll the card in Amazon’s Shop with Points program (found under the Payments section of your account settings).
2. Transfer to a hotel or airline account
The heart of the Membership Rewards program is its transfer option. You can turn your points into hotel loyalty rewards or airline frequent flyer miles. This redemption option lets you transfer your points to any of 21 partner programs, including popular travel brands like Delta and Marriott.
Although leisure travel is still not recommended due to the ongoing coronavirus pandemic, things are looking more optimistic for travel in late 2021 or early 2022. Given how persnickety it can be to book award travel — finding award availability can be a gamble at the best of times — it’s not a bad idea to start planning your future redemptions now.
Most points transfers occur at a 1:1 ratio, though a few will be higher or lower. This means you’ll normally get one hotel/airline point per Membership Rewards point. You may occasionally find a transfer bonus for a specific brand that provides an extra 30% on your points, but these bonuses are unpredictable.
The actual per-point value you’ll get for transferred points will depend on how you redeem them with the hotel or airline. Smart redemptions could easily yield a per-point value of $0.03 per point or more.
Keep in mind that you can’t un-transfer your points. Once you’ve transferred Membership Rewards points to a hotel or airline program, that’s it — they live there now. Make sure you have a particular redemption in mind before you transfer your rewards.
3. Redeem for a retailer gift card
Given how little travel we’re doing, transferring your American Express Membership Rewards may not appeal to you, regardless of the potential per-point value. If you’re willing to get less for your points, you could consider redeeming your rewards for a gift card with any of a few dozen popular retailers and restaurants.
The downside here, of course, is the lower per-point value. Specifically, depending on the specific brand, you could get as little as half a cent ($0.005) per point for a gift card redemption. At the other end, some gift cards may actually net you as much as $0.01 per point. Even that is still much lower than you might be able to get from a transfer redemption.
4. Save for the future
Unless you’re out of options, redeeming your Membership Rewards for cash back is a poor choice. You’ll only receive 0.6 cents ($0.006) per point — and, yes, that’s the right number of zeros. Similarly, using your rewards to pay with points at a retailer (excluding the deals above) will yield a maximum of 0.7 cents ($0.007) per point.
So, if you’re not ready to transfer your points for bookings just now, your best option may be to simply hang on to your Membership Rewards. Your points won’t expire as long as your account remains open, so there’s no rush. Instead, take your time to find the best ways to get the most value from your points.
View more information: https://www.fool.com/the-ascent/credit-cards/articles/the-4-best-ways-to-use-your-amex-membership-rewards-now/