How to Turn Credit Card Points and Miles Into Cash

Recently I’ve grown weary of using so many credit cards. In order to maximize rewards, we have been using the Capital One® Venture SM Rewards Credit Card, Starwood Preferred Guest® Card from American Express, and The Platinum Card® from American Express. The problem is that it’s a pain to manage and budget three different cards on top of our checking account. So I plan to start using just one card going forward.

But using just one card has its own drawbacks. In addition to not maximizing your rewards potential (something I’m willing to sacrifice for the sake of simplicity), if the card is a points or miles card, you may not be able to convert rewards to cash. And if you can get cash for your rewards, the value you receive may not be such a good deal.

And that brings me to several new websites that will convert points or miles to cash. Before getting to these websites, it’s worth pointing out that you can use American Express rewards points to make purchases on Amazon. You should be careful, however, to make sure that the number of points required to purchase an item does not result in a point being less than $0.01. I recently looked at buying an iPad with Amex points and the value of the points came in right at a penny. But that was only because they were running a special. The normal price would have made my points worth less than a penny.

Websites that Convert Points and Miles to Cash

So back to the websites. There are three that I want to share today.

Points.com: With points.com, you can track, trade, and redeem your miles and points. As with each of these services, the big gotcha is how much it will cost to redeem your rewards. Points.com let’s you redeem rewards for gift cards at numerous retailers or add funds directly to your PayPal account.

While that sounds great, I found that adding cash to your PayPal account is extremely expensive. For example, if you have an American Airlines AAdvantage account, it will cost 24,118 miles to transfer $100 to a PayPal account. With those miles, you can qualify for a round-trip ticket that would likely cost far more than $100. In contrast, here are the number of AA miles you’ll need for a $100 gift card at the following retailers:

Amazon: 23,530
Best Buy: 24,530
Home Depot: 24,530
T.J. Maxx: 24,059

PointsPay.com: This one has me a bit confused. In order to use Points Pay, you must be a member of Etihad Guest. Now maybe I’ve been living under a rock, but I’ve never heard of Etihad Guest. That being said, once you do join, Points Pay allows you to exchange miles and points for cash that is loaded onto a prepaid card.

But the bigger problem is that the website doesn’t tell you how much cash you’ll get for the points and miles you have. It most likely varies based on the loyalty programs you belong to. But the fact that Points Pay does not readily share this information is a big warning sign.

SwiftExchange.com: On the surface Swift Exchange, which is not yet available, looks very much like Points.com. But according to the Swift Exchange website, it will allow you to combine points in a unique way:

Points.com, and other websites like it, just allow you to view your accounts, not combine values into one spendable balance. Those other websites are, well, just websites. Swift Exchange is an entire system that creates a whole new way to pay. Nothing like it has ever existed and thanks to dozens and dozens of patents, nothing like it ever will.

Still, the question remains just how much your points and miles will be worth. Consumers will undoubtedly lose value for the convenience of converting points and miles to cash. In the final analysis, these services may be fine if you need some cash in a pinch, but you’re better off using the points and miles with the credit card and loyalty programs where you earned them.

Published or Updated: June 22, 2012
About Rob Berger

Rob founded the Dough Roller in 2007. A litigation attorney in the securities industry, he lives in Northern Virginia with his wife, their two teenagers, and the family mascot, a shih tzu named Sophie.

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