Don't redeem points for gift cards

**Cucumber** · 04:20 PM

Usually it's not worth it to redeem your reward points for gift cards through the credit card company. If you do this with the American Express membership rewards program you probably are only going to get around 1/2 the value depending on the gift card issuer. It's an even worse deal for buying products with the points because you get totally ripped off. Some of the gift cards though they offer like the Home Depot, Bloomingdales, etc do equal 1 for 1 so those are good but just be careful with the others. Some of the best credit card deals offer higher rewards when you redeem for gift cards but many others do not. Today when I was redeeming some points I noticed this on probably half the gift cards giving less than 1 for 1, especially the Amex gift cards which are basically cash. Those only equal 0.5 for 1 so it's like only getting 1/2% cashback.

**DGenerateKane** · 06:56 PM

I was planning on redeeming all of my points from my Sony card for gift cards because they were 15% off for answering a certain amount of questions during the month but they pulled the discount. Still plan on redeeming for gift cards, I've had too many sony products fail on me over the years.

**ccru** · 07:33 PM

Usually, you can get a much greater reward amount when you spend it on a gift card from a specific company as opposed to a cash gift card.

The best thing to do usually is wait until you have a significant amount of points saved up, because the longer you wait to spend your points the more you get in respect to what you spend...

ie:

5,000 points may by a 10$ gift card, but
10,000 points may by a 25$ gift card
(fake data to illustrate a point)

eventually when you are making a large purchase, like a new sony or apple laptop; purchase the largest gift card you can.

It may take you forever to actually save up for that laptop in points, but if you get a $100 gift-card towards the laptop, you are essentially saving 100$ (since your purchasing it anyway). This is basically the same as getting 100 cash back.

**macdrizzle** · 01:54 PM

I usually get the gift card instead of a check because they are 1000 points cheaper for the same value, and I cash them out via paypal, which means I lose about $1 or 2 but its a lot easier than getting 1000 points more

**Floppster** · 07:08 PM

Originally Posted by Cucumber

Usually it's not worth it to redeem your reward points for gift cards through the credit card company. If you do this with the American Express membership rewards program you probably are only going to get around 1/2 the value depending on the gift card issuer. It's an even worse deal for buying products with the points because you get totally ripped off. Some of the gift cards though they offer like the Home Depot, Bloomingdales, etc do equal 1 for 1 so those are good but just be careful with the others. Some of the best credit card deals offer higher rewards when you redeem for gift cards but many others do not. Today when I was redeeming some points I noticed this on probably half the gift cards giving less than 1 for 1, especially the Amex gift cards which are basically cash. Those only equal 0.5 for 1 so it's like only getting 1/2% cashback.

Are you surprised ? If you get a home depot gift card for $100 it is equivalent to 10000 points however you only get a $50 Amex Gift card for the same amount of points. There is a simple explanation for it. Home Depot sponsors the membership rewards program. Amex pays maybe 25-30 dollars for a 100 gift card. Even though Home Depots cost maybe $50 they hope that you shop for $175 and they make money on the deal while if you get a Amex card it is almost like cash. Even though Amex makes 3% on each swipe it cost them more than the home depot gift card. If Home Depot would have 50% markup on each product and amex pays them 25$ for a $100 gift card Home Depot would loose $25 if you would only use the the exact amount. If you would spend $175 (100 gift card, 75 cash) they would now have made money on you. $36.50 on the $75 paid cash + $25 from Amex so they would have made $11.50 profit on you. It is probably even more they make.

**Mogul of Pineapples** · 08:32 PM

Very good point Floppster. I've noticed that too with the Amex Membership Reward points. It will never benefit you to redeem them for Amex gift cards. You're always better off redeeming them for merchant gift cards. Like you demonstrated, if you don't you're just throwing away money.

**mama18** · 12:37 AM

I am totally confused

When I redeem my Discover points for gift cards I actually get more than if I took cash. I redeemed $45 for a $50 Pizza Hut gift card. Why would I not want to do that if I am getting more for my money?????

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Don't redeem points for gift cards