This post contains affiliate links.

It’s no secret that I love credit card rewards. For a little bit of effort you can get cash back on what you already spend AND pick up some nice sign-up bonuses if you, ahem, play your cards wisely 😉

The cream of the crop cards are the ones that let you redeem points at a 1:1 ratio or better for either cash back or travel.  A 1:1 redemption ratio means that each point is worth 1 cent. Another common example is a 2:1 ratio, which means that 2 points is worth 1 cent – 2:1 is a lesser value.

  • Chase Ultimate Rewards are the best points you can get. They’re extremely flexible, with all options being at least a 1:1 redemption. Using UR on the Sapphire Preferred to book travel through Chase gives you a ratio of 1:1.25 – 25% more! This is big money when you’re booking a $1000 trip.
  • Companies like Capital One, Barclays, Citi, and American Express also offer great sign-up bonuses (usually around $2-500), but have less options when it comes to getting full redemption value.

Using Gift Cards To Get (Almost) Full Value

Usually, cash back and travel at full value (1:1) are my first choices. In some cases, that’s not possible, but I still have the option of getting full value on buying gift cards.

This could easily turn into a spending spree, especially if you can’t find gift cards to places where you buy things like groceries and gas. Or even Amazon! In this case, it’s better to turn your points into gift cards that you can sell for maximum value.

To do this, I use Cardpool.com.  Cardpool lets you buy discounted gift cards and sell unwanted ones. Here’s how I do it:

  • I browse Cardpool before I redeem my points for gift cards. Different gift cards command different prices, with the difference being between 70-87% of the card’s value. You want to find which gift cards you can sell for the most value.
  • To increase the value of my points, I choose the option to get an extra 6% back by getting paid in Amazon gift cards instead of cash. Amazon also has a wider selection of gift cards than most credit card points hubs, so you have more options for how to spend your rewards by going through Amazon.

Processing usually takes about a week and if you select Amazon gift cards as payment you’ll get an email to redeem your credit online.

Summary

Ideally you would be able to get 100% of your rewards back all the time. When gift cards are worth more than travel or cash back I’ve found selling them through Cardpool to be the best option. While you can’t get ALL of your points’ value, you can get a lot more than simply accepting a 2:1 redemption ratio.

On a $400 sign up bonus you can still get $372 worth of credit this way, compared to $200 if you simply went through the card’s website.

It’s always a good idea to review the redemption options BEFORE you pursue a sign up bonus. To do this, just search “card issuer and rewards name redemption rate (ie, Chase Ultimate Rewards redemption rate)”. Some companies change these rates, and others have special promotions from time to time.

I’m currently doing this with American Express points. I’ve exhausted my options through Chase for the next year, and Amex has some great sign up bonuses that I didn’t want to miss out on.

Finding a way to translate points into currency that I can actually spend makes it easier to take advantage of good promotions.

Useful links:

  • Hustler Money Blog – the best resource for browsing credit card bonuses and offers.
  • Cardpool.com – sell your gift cards easily online. Get $5 for signing up using this link!

Image by Sira Anamwong at FreeDigitalPhotos.net