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The Best Ways to Redeem Credit Card Points

When it comes to redeeming the points you earn on your credit card, not all things are equal. Not only is every points program different, but what you’re actually redeeming for – whether it be for travel, gift cards, or groceries – will have a different value.

Not everyone has the time to figure out the ins and outs of every program, but it’s easy to maximize the value of your points with little effort. Here are some tips on the best ways to use your credit card points.

Understand what your redemptions are worth

Most loyalty programs allow you to redeem your points for various things, but what you may not realize is that not everything has the same value. Let’s take a look at the Scotia Rewards program as an example.

Redeeming 10,000 Scotia points will get you either:

  • $100 in travel when booked through Scotia Rewards or on your own
  • $74 for an Amazon gift card (it takes 13,400 points to claim $100)
  • $67 to $80 as a statement credit (since it’ll cost you 3,000 points to claim $20 or 37,500 points for $300)

Based on the above examples, it’s clear that you get the most return for your Scotia Rewards points when redeeming for travel and less when redeeming for gift cards or statement credits. Regardless of who you collect points with, you need to understand what your points are worth for each type of redemption so you can maximize your value.

Decide when using your points is really worth it

Note: The Aeroplan program is changing effective November 8, 2020. Click here for details about the new program and here for information about new co-branded Aeroplan credit cards.

There are various travel programs, such as Aeroplan, whose redemption rules and points values fluctuate considerably based on which region of the world you’re flying to. These types of programs can be lucrative, but you’ll need to be a bit strategic to maximize the value you get from them.

For example, it takes 25,000 Aeroplan Miles to fly anywhere within the continental U.S. and North America. If you live in Toronto, you would likely get the best value for your points if you redeemed for a flight to say Vancouver or Los Angeles. Meanwhile, don’t waste your points on lower cost routes such as Montreal or Chicago, and if you need to fly to either of those cities, it can make more sense to pay cash instead and save up your points for another trip to a more valuable flight destination.

You can use our Aeroplan rewards chart to identify which flight destinations offer the best and least value for your points.

Aeroplan in particular can be a great program, but you’ll really want to use one of the best Aeroplan credit cards such as the TD Aeroplan Visa Infinite Card to help you earn miles faster.

Take advantage of special promos

On occasion, your loyalty program may have special promotions that can increase the value of your points. Just recently, RBC Rewards had an offer where you would could save 25% on points when purchasing gift cards. That means you only had to spend 7,500 RBC points to get a $100 gift card instead of the usual 10,000 points.

Shoppers Drug Mart also runs various promotions throughout the year where you can earn more money off your purchases when redeeming your PC Optimum points. One popular promo that has occurred a few times is where you’d get $85 off your purchase when you redeem 50,000 PC Optimum points. Those points normally have a value of $50, so you’re getting an extra $35 for free!

Understand your transfer partners

Another thing you want to check with your loyalty programs is to see if they have any transfer partners. If you’re an American Express cardholder, you can transfer your points to Marriott Bonvoy at rate of 1 to 1.2. Since Amex also allows you to redeem your points at a 1% ratio, you can easily check to see if it’s worth transferring your points.

Let’s say you’re looking at a hotel which requires 35,000 Marriott Bonvoy points to make a redemption but it has a real cost of $325. Since it would take 29,167 AMEX Membership Rewards points to convert to 35,000 Marriott Bonvoy points, you’ll come out ahead. If you paid for that hotel directly via the American Express travel portal, it would have cost you 32,500 points. In this scenario, you would save 3,333 AMEX Membership Rewards points by transferring to Marriott Bonvoy.

Conversely, let’s say the same hotel room only had a real value of $200. It would only take 20,000 Amex points to make a redemption versus 29,167 AMEX points to convert to the required 35,000 Marriott Bonvoy points. You’d obviously want to just book through American Express based on this value.

As you can see, transfer partners can help you maximize the value of your points but you need to know when it makes sense to make a transfer.

Decide whether collecting points is right for you

If all of the above is making your head spin or you don’t like travelling, then forget about collecting points. Make your life easier by applying for one of the best cash back credit cards instead. With cash back cards, you’re earning a fixed percentage on all your purchases. There’s no need to worry about what your points are worth, transfer partners or optimal times to redeem your points.

That being said, make sure you pick a cash back card that fits your spending profile. If you spend a lot on groceries, then the Scotia Momentum Visa Infinite Card should be on your radar since it allows you to earn 4% cash back on groceries. Don’t like paying an annual fee? Then the Tangerine Money-Back Card will appeal to you since it allows you to pick up to three categories that will earn you 2% cash back.

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