I've had a few people ask me what the point of all my credit cards are, which made me realize it was important to revisit an important question:
What's the point of credit cards points?
There are several new options for how to redeem credit card points with credit cards companies looking to broaden their redemption horizons. To make it easy:
DO NOT REDEEM POINTS FOR ANYTHING OTHER THAN FLIGHTS OR HOTEL STAYS!
I know it's tempting to redeem your Amex points for shopping at Amazon or other online stores, but I strongly advise not to do that.
I wrote a previous post about what good and bad redemptions are, but it's important to reiterate what you should be collecting these points for.
Think of every point like a dollar. There are smart ways to use your dollars (investing) and there are dumb ways to use your dollars (casinos). Investing turns your dollar into more dollars (if you're smart!) and gambling at casinos sets your dollars on fire, never to be seen again.
Redeeming for merchandise or online shopping is the least value you can possibly get. That's what the credit card companies want you to do!
Remember, credit card points are essentially a rebate on your purchase. So, if you spend $20,000 on dining in one year and use a debit card or cash, you really spent $20,000.
But, if you use a credit card earning 2 points per dollar on dining (which you should!), you earn 40,000 points. Chances are, that's enough to earn a round trip economy ticket or a one-way business class ticket, both of which can be anywhere from $400 to upwards of $2,000 depending on the carrier. Now that $20,000 that you're already spending becomes much less since you got value back from those dollars.
Everyone wants something different out of their points depending on their travel preferences. Some people don't like to travel, I get that. If that's the case, find a card that will let you churn and burn and give you enough to cover domestic flights for weddings and visiting family. If you want to go aspirational, as the saying goes, find you a card that can do both.
I cashed in my Amex points earlier this year for two roundtrip first class flights to Tokyo on All Nippon Airways, one of the 10 best airlines in the world for 14 hours of nonstop bliss. Retail price of that ticket was $23,000, a price no one should ever play for a flight, but it only cost me 180,000 amex points. I know it sounds like a lot, but average redemptions bring about 2 cents per point, this one brought me 25 cents per point, over 10x the normal amount. All because I always use a credit card!
Again, when you use a debit card or cash, you get nothing back, and what's the point of that?