Experience rewards pay off for some credit card users

Michael McAvoy's parents dreamed up an out-of-this-world gift for his 13th birthday: five days at NASA space camp. Cost: 130,000 Diners Club rewards points.

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When 57-year-old William Elkjer heard the call of the wild, he and his wife Candy conquered 180 miles of Alaskan snowfield on an eight-day, professionally led dogsled trek. Cost: 500,000 Diners Club rewards points.

For the mundane necessities of life, there are credit cards. For the adventure of a lifetime, there are "experience rewards."

Diners Club and American Express have taken their rewards programs to this sky's-the-limit level. Their best customers get to redeem points in any way they choose -- as long as it's legal. Some of life's rich and rare opportunities that have been enjoyed thanks to mega-points include cosmetic surgery, cooking school in Tuscany and backstage passes to a Dave Matthews concert. Experience rewards to a lesser degree have caught on with a handful of Visa and MasterCard issuers, as well.

"For card members with millions of points, it is hard to excite someone with another TV or a $100 Saks gift certificate. It really takes something special," says Ashley Miller, vice president of club rewards for Diners Club North America. "For them, the question is, 'What can I do with my points that I would probably never pay for?'"

Desiree Fish of American Express says experience rewards acknowledge that the last thing most road warriors need is another airline ticket or new set of luggage.

"People used to think of credit card rewards programs as travel only. Travel is still very popular, but a lot of people accumulate rewards because they travel a lot, so they may not want to use their points for another airline ticket. They may want to experience something that maybe they wouldn't be willing to spend their money on because they think it is too self-indulgent."

Says Miller: "It's all play money."

Paying for dreams in points
In 1995, a decade after it introduced its Club Rewards program, Diners Club began offering personalized rewards to cardholders who had accumulated more than 100,000 points. American Express, which launched its Membership Rewards program in 1991, expanded into experience rewards two years ago with Your Reward, a design-your-own-reward program.

The idea of enhanced rewards points wasn't groundbreaking. After all, private-label card issuers such as Neiman Marcus and Bloomingdale's had been offering luxurious experiences to their top customers for some time. But it did open the door to anyone who had the points to qualify.

And it was a natural evolution for Diners Club and American Express. Both card companies had long offered personalized concierge services to their top customers, as well as by-invitation-only access to special concerts, celebrity food-and-wine tastings and sporting events that they sponsored. It was easy to lower the velvet rope and admit cardholders who had amassed a sizable bank of rewards points over the years.

To redeem your wildest dream, you simply share your wish with your credit card concierge. They make all the arrangements for you, calculate the dollars-to-points conversion and tell you the damage (the service is free, by the way). You may pay all or part of the bill in points or, if you're a few points shy, by cash, check or, of course, your credit card.

And what a time folks are having with all that "free money."