Oops, we spent them again…

Credit card points are there for the spending, designed to heighten your enjoyment from any purchase, with savings on the transaction. But how you spend your points can leave you kicking yourself minutes, days or years later, wishing you’d been wiser with the mystifying currency known as credit card points. Here’s some sage advice to keep you from kicking yourself, and hopefully find yourself an upgraded travel experience.

First, Let’s Get On The Same Page

Let’s say points should be worth at least one cent a piece. So if you have 100,000 points, you’ve got a minimum of $1,000 of value on your hands. With many popular types of credit card points, especially those which can be transferred to an airline or hotel loyalty program, potential exists to extract value of 3 cents per point or greater, but let’s keep 1 cent as a baseline. Anything less, just won’t do.

Redeem Points For Gift Cards

No matter what’s in your wallet, this is one of the worst ways to use points. Using points for gift cards is all but guaranteed to offer tremendously poor value. And at the end of the day, you’re not even getting any cold hard cash. We’ve already established that your points should be valued at a minimum of 1 cent each, and most gift card redemptions offer a mere half a cent of value. You’d blow 50,000 points for a $250 gift card on most occasions. 50,000 points could get you a business class ticket, or up to two nights in a $500 a night hotel, so you’d be kicking yourself.

Transfer Points Without Purpose

Don’t get us wrong here – transferring points to an airline or hotel can be a brilliant idea to unlock the best value for your stash, but this dance is all about timing. Transfers of points like American Express Membership Rewards, Chase Ultimate Rewards, Citi ThankYou or Starwood Preferred Guest are one way streets. Once you’ve transferred out, the points are stuck with the airline or hotel you’ve chosen. It’s always safer to leave the points “in the bank” where your options remain open, unless a transfer bonus exists, where you earn a bonus for transferring points to a specific airline or hotel. For example, if you transferred your credit card points to Qatar Privilege Club recently, in hopes of booking a future flight, you would’ve been caught up in an overnight devaluation, which uprooted any value from the loyalty program. Don’t transfer your points to an airline or hotel until you’re absolutely ready to book. And don’t forget, some airlines let you hold flights while you transfer.

Cash In For Electronics, Fitness Equipment

When a credit card company must acquire something for you, you get poor value for your points. Credit card companies send out those offers to use points for Bose headphones or Bowflex gym systems because they know people want them, and people constantly overlook the astoundingly poor points value you’re receiving. Put it this way, if the credit card company is suggesting a way to use points: buyer beware. Much like redeeming for gift cards, this will almost always ensure you’re receiving far less than a cent of value for each point, which again – compared to potential travel redemptions will leave you “wishing you hadn’t blow all those points” later on. Unless of course, you hate travel and love gyms.

Cover Easy Expenses

Points are personal, and at the end of the day, whatever makes you happy when you cash in will suffice. But using points for things you can easily afford, and actually should buy to earn more points is foolish. Points are best used for things you don’t want to buy. like horrifically expensive last minute airline and hotel bookings – or aspirational travel in cabins towards the front of the plane or hotels towards the front of the beach. If flights are $150 round trip, and you can easily swing that, don’t waste 15,000 or more points. Wait to unlock fantastic value when 15,000 points can cover a $600+ flight. You can do that!

Failure To Dream

This may sound like millennial nonsense, but it’s true. People dismiss credit card points as simple savings tools or mysterious currency, but they can be so much more. Many of life’s best and most luxurious experiences can be unlocked with points alone. All that’s required is a bit of learning. Learn how to fly around the world in business class for 125,000 Amex Points, get $1500 worth of hotels for 50,000 Chase Points, or use Citi Points to fly in an apartment at 33,000 feet. The more you dare to learn, the more you stand to earn.

Have burned credit card points foolishly? Share your story!

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