Woman choosing gift card

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Turn your hard-earned rewards into holiday gifts.

Gift cards are one of the most popular holiday gifts, whether you’re giving or receiving. According to InComm’s 2018 Holiday Shopping Index, gift cards are both the most requested gift and the most commonly given gift (along with clothing). InComm also reports that people will buy an average of seven gift cards for family members this holiday season, in addition to gift cards purchased for friends and coworkers.

Many credit cards let you redeem your rewards for gift cards, so before you finish your holiday shopping, log into your credit card account and see how many gift cards you can get for your points, miles or cash. Use this guide to help you determine whether your credit card is offering gift cards at a great value, or whether you’re better off purchasing gift cards on your own and using your rewards for something else.

How do you redeem credit card rewards for gift cards?

The easiest way to redeem your credit card rewards for gift cards is to log into your account or app. From there, you can access your credit card rewards and view the available redemption options. If gift cards are available, that’s where you’ll find them.

Which credit cards offer which types of gift cards?

In general, credit cards that let you redeem your rewards for gift cards offer a variety of gift card options, including both retail and dining. Gift card offers change often, and credit cards sometimes feature special offers that increase the value of your gift card or decrease the rewards required to redeem it.

For example: as of this publication, Discover® will let you redeem your Cashback Bonus® for gift cards at 113 different merchants, including Airbnb, 1-800-Flowers, and Sephora. In many cases, $20 cash back will get you a $25 gift card and $40 cash back will get you a $50 gift card. If you have a Discover it® Cash Back credit card, turning your rewards into gift cards is a smart move.

Chase Ultimate Rewards® offers 197 gift cards from popular brands such as Amazon.com, Spotify, and Barnes & Noble, with special deals that allow you to save 10% on a gift card redemption while supplies last — another good option, if you’re looking for value.

If you’re a Capital One® cardholder, you have 85 gift cards to choose from. Retailers include Amazon.com, Macy’s, and Crate and Barrel. Capital One does not currently offer any deals, so $25 in cash back rewards will get you a $25 gift card, $50 will get you $50, and so on.

Check your credit card’s rewards program. Whether you’re earning cash, points or miles, chances are there’s an option to redeem your rewards for gift cards.

What are the advantages of redeeming your rewards for gift cards?

Gift cards are good ways to use rewards that are too small for big-ticket items like travel. If you’ve only got 5,000 points, you probably can’t get a free flight — but you might be able to get a $50 gift card.

Plus, if your credit card offers gift card deals, you could receive a better gift card for your rewards than you would if you’d paid the same amount out-of-pocket. If Discover lets you get a $50 gift card for $40, for example, you’ve just added an extra $10 to your holiday gift without having to pay for it.

Are there any disadvantages to redeeming your rewards for gift cards?

Credit cards can adjust the value of your rewards depending on how they are redeemed, and gift cards are often one of the least valuable ways to redeem your credit card rewards. If you have the Chase Sapphire Preferred® credit card, for example, your points are worth 1 cent each when redeemed for cash, and a point is worth 1.25 cents when redeemed for travel through Chase Ultimate Rewards. However, the value of points redeemed for gift cards can vary at Chase’s discretion — and may never be as high as the 1.25 cents per point you’ll get when you redeem for travel through Chase Ultimate Rewards.

Before purchasing a gift card with your credit card rewards, take a look at the exchange rate. A $50 gift card that costs 6,000 points might not be a great deal, especially if you can turn those points into $60 in statement credits (or $75 in travel). Sometimes it’s better to redeem your rewards for cash and pay for your gift cards out-of-pocket.

What else do you need to know about redeeming credit card rewards for gift cards?

If you want to use your credit card rewards to give gift cards over the holidays, it’s important to plan ahead. If you’re the type of person who redeems your credit card rewards for statement credits every month, you won’t have any rewards left over for gift cards — and if you’ve got a credit card that offers deals like a $50 gift card for $40, you could be missing out on some holiday savings.

It’s worth checking your credit card’s gift card options, including the typical redemption rate, before deciding whether to redeem your rewards for gift cards. Can you get a better return on your rewards if your redeem for cash back or travel? Are you satisfied with the available merchants and deals? Checking your credit card’s gift card offers before you plan your holiday shopping can help you make smart decisions. You don’t want to end up redeeming your rewards for a gift card you aren’t happy with just because there isn’t time to get anything else.

You should also ask yourself whether it’s better to buy gift cards with your credit card and earn rewards on those purchases. Some retailers don’t allow you to purchase gift cards with a credit card, but many do — and if you want to give gift cards this holiday season and you’ve got a credit card that offers great rewards, you can buy the gift card for someone else and earn rewards for yourself!


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