Using credit card points at checkout just got too easy | Personal Finance

Sarah Ratner

Travel and cash back are the most touted ways to redeem credit card rewards, but over the past decade or so, another redemption option has emerged: the ability to pay with points at select merchants.

This is a very attractive feature. You’re going to spend the money to buy it anyway, but you can use points to lower the price with minimal effort. At the height of the pandemic, when travel points were idle, it was a way to get some value out of them in the short term.

For example, when shopping on Amazon, you can link your rewards program account to your Amazon account, and you can then choose to redeem your points at checkout. PayPal also allows you to redeem points from cards that have been linked to your PayPal account once you enroll these cards in its Pay with Rewards feature.

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It’s part of an ongoing effort to create a frictionless payments experience, a fancy way of saying “easier to spend money.” In an August 2021 survey by The Wise Marketer, a newsletter for marketing professionals, 47% of respondents said that “consumers want to maximize convenience and reduce friction” are the main factors affecting credit card loyalty The most important trends in the market.

But just because paying with points is easy doesn’t mean it’s a good idea. Credit cards have made it easier to spend more money. A February 2021 MIT study, “The Neural Mechanisms of Credit Card Spending,” found that compared to “new payment methods” (currently credit cards, but other payment methods in the future, such as digital wallets), your spending There are fewer restrictions when you use cash. Add the ability to buy points to keep costs down and you’ll get a shopping dopamine hit, but there’s an important reason to avoid it.

Paying with points makes your rewards less valuable

When you request to claim credit to redeem your points from a cash back card or redeem travel card points for vacation bookings, you are using these rewards in the best possible way. Expect each point to be worth about 1 to 1.5 cents, depending on the card you’re carrying.

However, if you pay with points at checkout, you may lose, depending on the card you use. The reasons are as follows:

  • Your points may be worthless: When redeemed for purchases, they may be half their value. However, there are some exceptions where each point is worth 1 cent.
  • You will consume your travel award budget: If you’re looking to redeem your travel award for a substantial discount on your next trip, reducing the purchase award may leave you without the amount required to book award travel.

Here’s a little value to use at checkout at two popular merchants:

Credit Card Rewards Program

Point value on Amazon (in cents)

Pip value on PayPal (in cents)

American Express Membership Rewards

PayPal Cash Back MasterCard®

PayPal Plus MasterCard®

How to avoid accidentally paying with points

You’ll see a lot of text on the screen during checkout, some in small fonts, so you may inadvertently pay with points. If you share your credit card and online shopping accounts with other members of your household, they may use your points to make purchases without your knowledge (until you try to book an award flight and find you don’t have enough points to do so, that is).

The ability to save multiple cards to your online account is handy, but you’ll need to shop more carefully if you want to avoid accidentally using your points. When you add cards to your account, do not link rewards accounts for those cards, so there is no option to pay with points.

If you do want to link your rewards account but don’t want to use your points frequently, please pay close attention to the payment method you choose at checkout. If there is a box to check to pay with points, make sure it is unchecked. Although checkout takes a little more time, take the time to make sure you know exactly how you’re paying for your purchase. Discuss this with other family members using the same card and account so everyone agrees.

Still want to pay with points?do it thoughtfully

In many cases, paying with points will result in a lower point value, but that doesn’t mean it’s wrong to use points in this way. If that’s how you prefer to cash out your rewards, you’re getting value out of it in a way that makes sense to you. Here are some ways to pay with points in a more optimized way:

  • Budget points like your budget money: Track your points on a spreadsheet, especially if you have multiple credit cards from different issuers. You can budget points by mentally setting aside the required amount for your upcoming vacation. The remaining points can be used free for other redemptions, such as paying with points.
  • Use the last points: When you close your card, you usually lose any remaining rewards. Paying with points is probably the best way to use up a small amount of points before canceling your card.
  • Use cards that offer higher value per point: Some cards, like the Discover card and Capital One’s cash-back card, allow you to redeem points at checkout for 1 cent each.


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