What to do with your ‘orphaned’ points

We recently had a great question posed on our forums: What do you do with orphaned points — small point balances that aren’t enough for a reward?orphan points

Orphaned points can be a problem in certain rewards programs, and they can be maddening for rewards maximizers. Read on for some ways to use them and recommend some credit card rewards programs that won’t ever leave you with orphaned points.

How points become orphaned

Leftover points are generally a problem in airline and hotel programs. Unlike more flexible rewards programs, you have a clear goal with these ones: Earn a free night or free flight. For most programs, free nights and flights are available in specific increments (often 25,000 miles for a round-trip domestic flight with legacy carriers, for example).

So let’s say you have 53,000 points, accrued via a credit card sign-up bonus and regular spending with a co-branded credit card. You redeem 50,000 for two flights, leaving you with 3,000. That’s a long way to go to another free flight. If you aren’t flying the airline that often, or are planning to cancel the co-branded credit card, you might never get there. Hotel programs can put you in a similar bind, as you also redeem in set increments, depending on the hotel’s category.

Options for orphaned points

While 3,000 useless points may seem wasteful, airline and programs have the potential to be highly lucrative. If you redeem strategically, the return on your spending could be well above what you’d get on a cash-back card. So orphaned points may be just part of the cost of doing business.

That said, if you want to use your extra rewards for something, consider these options below. We’ve sorted them in descending order of value. So before you use one of the options at the bottom of the list, make sure your points are truly and hopelessly orphaned; if you’re simply rushing to use points before they expire, keep in mind there are easy ways to keep them alive.

  • Use points + cash: Don’t have enough points for a hotel night and don’t mind paying a little cash? Some hotel programs, including the Marriott Rewards program and the Starwood Preferred Guest program, let you pay a significantly discounted number of points plus some cash. It can be an efficient way to use that extra couple thousand points you have lying around.

    This is generally a good option, as you can expect a good per-point value, comparable with what you’d get when booking 100 percent with points. However, only lower-category hotels will allow you to use just a couple thousand points toward a stay (higher-category hotels will still require 10,000 or more points a night, even if you’re fronting some cash), and lower-category properties can be hard to find in some cities. Also, some programs don’t make the points-plus-cash option available on all properties every night.

    Points-plus-cash options are far rarer in airline programs, but Delta offers a Pay with Miles benefit for Gold and Platinum SkyMiles cardholders and its Delta Reserve cardholders. These cards are offered by American Express, a CreditCardForum advertising partner. If you have at least 5,000 miles (for a $50 credit), you can use them for a credit toward travel. You have to redeem in increments of 5,000 miles, but this benefit can still shrink your orphan-miles balance.

  • Digital downloads: If you have a small number of points (under 1,000), you can redeem them for a song or two if your program allows you to redeem for digital song downloads. Few airline and hotel programs offer this as an option, and United seems to have the most robust digital download catalog. For example, you can buy songs for 160 miles each and albums for around 1,300 miles in the MileagePlus Digital Media store.

    Based on iTunes prices, you’re getting slightly less than the ideal 1 cent per point when you redeem this way. But what else are you going to do with 160 miles?

  • Gift cards: Some programs allow you to redeem small amounts of points for gift cards (for their own hotels and flights, and for various retailers). Marriott, for example, allows you to redeem as few as 2,500 points toward Marriott eGift cards. Third-party programs, such as Points.com, also accept points from various programs in exchange for gift cards.

    Watch the redemption value, though. For example, those Marriott gift cards start at $10 for 2,500 points, meaning you’re getting less than half a cent per point. Redemption values at Points.com aren’t much better (often around half a cent per point). But if you have 2,500 points to shake loose and could use the gift card, it’s an option to consider.

  • Charitable donations: Your unwanted points can help others.

    American Airlines, for example, allows you to donate as few as 1,000 miles to charities that fund flights for wounded service members and children with serious illnesses. Starwood lets you donate as few as 500 points to the American Red Cross and various environmental initiatives.

  • Merchandise, magazines and other random goods: This is a last resort because of the notoriously low redemption value you’ll generally get. But if it comes down to using your rewards and letting them expire, by all means, get a kitchen spoon or magazine subscription for 2,000 miles.

Cards that won’t leave you with orphaned points

The easy way to avoid orphan points is to get a cash-back card or a card that earns fixed-value travel rewards points (such as the Capital One Venture). But, if you’re into the travel rewards maximization game and are after free premium-cabin flights, these simpler one-size-fits-all cards likely won’t give you as much traction.

Flexible-rewards cards are therefore a good compromise, especially if you’re invested in several airline or hotel rewards programs. Cards associated with Chase Ultimate Rewards, Citi ThankYou and AmEx Membership Rewards, for example, allow you to transfer your points directly into various airline and hotel programs. See a full list of each program’s transfer partners here. This allows you to use the credit card’s program as a holding area for your points, before moving however many you need into your frequent-flier or hotel-loyalty program of choice.

If you have a few thousand points remaining after you make the transfer, these programs have a plethora of redemption options. So if you don’t want to save your points for a future transfer, you then can redeem as little as 1 point at a time for online shopping.

Below are some recommended cards tied to flexible-rewards programs, for those trying to avoid orphan points.

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