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If you've visited AwardWallet at least once before, you've likely heard us extol the value of transferable points. While there are many types of points you can earn on your credit card, these points — sometimes called flexible points — provide the most flexibility for options on redeeming them.
But not everyone is aware of the uses of their points.
A recent survey from Runa asked 1,200 participants about their uses of reward programs, and some of the findings were very interesting:
- Nearly 60% of respondents said they will rely on their rewards more in the next year than the previous year, due to an uncertain economic climate.
- The most common response for participating in rewards programs was getting more value for their money.
- While 80% of respondents said they're generally satisfied with their rewards programs, they had a host of frustrations to share:
- 50% said they're frustrated with a lack of options in how they receive their rewards.
- 38% said earning rewards is difficult.
- 32% said redeeming rewards is difficult.
- 31% said rewards are not meaningful or substantial.
- 27% said the rewards earned weren't relevant to them.
- Only 42% of respondents said they are always able to redeem rewards when and where they want. Meanwhile, 68% said that's not true — with 4.2% saying they can never redeem rewards when and where they want.
If I were participating in a rewards program that didn't allow me to earn meaningful rewards, couldn't redeem my rewards when/where I wanted, and had difficulty in both earning and redeeming my rewards, I'd be frustrated also.
How To Earn Rewards Simply
Before you can redeem your points in a way that provides value, you have to earn rewards in a way that makes sense for you. Having a credit card that provides bonus cash back on EV charging won't make sense if you don't have an electric vehicle.
There are a few ways to approach this:
- If your spending is spread across many different types of purchases or you don't want to fool with bonus categories, then you should get a credit card optimized for everyday spending. These cards will help you earn extra points or cash back on every dollar you spend.
- If you know where you tend to spend the most, find a credit card that rewards those purchases. Do you spend a lot on groceries? Gas? Commuting to and from work? Look for credit cards that provide extra rewards on those purchases.
- Understand the different types of rewards you can earn, then choose the type that provides the most value to you.
Related: Best Rewards Credit Cards for Each Spending Category
The Power of Flexible Points
Among the types of points you can earn from credit cards, the most valuable is “flexible points” or “transferable points.”
Consider the differences: With cash back, you have a single way to redeem your rewards. It's worth its face value in cash, even if you're redeeming it as a statement credit, direct deposit to your bank account, or for gift cards.
If you earn airline miles, you can redeem those just through the airline program your miles are in — though you may have access to booking award tickets with the airline's partners, as well.
With flexible points, however, you have more options. Let's look at American Express Membership Rewards as an example. With these points, you can redeem them as cash back, toward gift cards, as a statement credit against your recent purchases, or to book travel through Amex Travel.
But the most lucrative use of these points comes from transferring them to the 21 Amex airline and hotel transfer partners. This strategy requires more effort and knowledge than other redemption options, to be clear. You'll need to find an available award stay or award flight, send your points to a participating airline or hotel program, and then complete your reservation. Seats and rooms aren't always available on the dates you want, which can be frustrating.
But the value is clear. Based on data from recent AwardWallet user redemptions, you can use your Amex points at the following average values (per point):
- 1.96¢ with airline and hotel transfer partners
- Up to 1¢ toward gift cards
- Up to 0.7¢ when you pay with points at checkout
- 0.6¢ as a statement credit
- 0.5¢ when shopping for products online with Amex
That's quite a difference. Earning this type of points addresses many of the chief frustrations with rewards: Earning rewards that are valuable, have multiple uses, and are meaningful to the person earning them.
Related: All of the Cards That Earn American Express Membership Rewards Points
Bottom Line
A recent survey found that people are increasingly relying on rewards programs, though many reported dissatisfaction with these rewards. Several of the chief frustrations can be addressed with a better understanding of the types of rewards your credit card can provide and how those rewards can be redeemed. For many people, earning flexible rewards will make the most sense.
If this all sounds interesting — though potentially daunting — you might want to start with this article: Achieve Your Travel Goals With Points and Miles
The comments on this page are not provided, reviewed, or otherwise approved by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
