Use points and miles to give gifts with zero out-of-pocket cost

Each holiday season, some consumers find that they have no extra money for gifts. If you’re in this situation, you could put your holiday purchases on a 0% interest credit card if you know you can pay the charges off during the introductory period.

However, if you have points or miles tucked away in your loyalty accounts, a better option than taking on debt may be to redeem your rewards for gifts. After all, these rewards can serve as a lifeline and help you put a little magic under the tree during difficult times.

At TPG, we get questions about using points and miles for gifts each holiday season. Many readers aren’t interested in giving the gift of travel; instead, they want to give more traditional gifts like toys and gift cards.

For example, TPG’s senior director of content, Summer Hull, received this message from one of her Instagram followers: “Do any rewards programs allow you to use points for plain Visa gift cards … [?] I lost my job and am looking for a way to utilize rewards for Christmas giving to kids.”

We typically don’t recommend redeeming points and miles for nontravel redemptions since you’ll usually get a higher value when you redeem for travel. However, that math means nothing if cashing in some points for nontravel gifts can put smiles on your loved ones’ faces during the holidays.

If you need to redeem points for some presents this year, here are some of the best ways to accomplish that goal.

Redeem points for gift cards

There are two primary ways to use gift cards purchased with points and miles as holiday gifts.

One option is to redeem your points or miles for gift cards to merchants like Target or Best Buy. Then, you can use those gift cards to purchase gifts at these stores.

The other option is to give the gift card as the gift itself. However, some programs only mail physical gift cards to your home address. That means you’d need to pass the gift card on to your intended recipient once it arrives at your address. Other programs offer only electronic gift cards.

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As you’ll see below, some programs provide a better return for your points than others. If you want to redeem your points or miles for gift cards, here are some options to consider:

• American Express Membership Rewards: Redeem at a rate of 0.7 to 1 cent per point for merchant-specific gift cards and 0.5 cents per point for American Express gift cards
• Capital One miles: Redeem at a rate of 0.8 cents per mile
• Choice Privileges: Redeem at a rate of 0.31 cents per point
• Citi ThankYou Rewards: Redeem at a rate of 1 cent per point
• Chase Ultimate Rewards: Redeem at a rate of 1 cent per point
• IHG One Rewards: Redeem at a rate of 0.17 to 0.2 cents per point
• Marriott Bonvoy: Redeem at a rate of 0.4 cents per point for Marriott gift cards and 0.2 to 0.39 cents per point for other gift cards
• Southwest Rapid Rewards (only Rapid Rewards cardholders): Redeem at a rate of 0.33 to 0.67 cents per point
• United MileagePlus: Redeem at a rate of 0.3 cents per mile
• Wyndham Rewards: Redeem at a rate of 0.33 to 1.14 cents per point

Programs may occasionally offer sales that let you redeem fewer rewards for select gift cards. But, out of all the options discussed above, only American Express Membership Rewards and Choice Privileges allow you to redeem points for gift cards that aren’t merchant-specific.

The reader who wrote to Summer might consider redeeming Amex Membership Rewards points for Amex gift cards at 0.5 cents per point. However, as you’ll see in a subsequent section, redeeming Membership Rewards points for a statement credit at 0.6 cents per point would be a better option if flexibility is required. Otherwise, the reader could get up to 1 cent per point by redeeming for select retailer-specific gift cards.

Related: The do’s and don’ts on how to maximize your holiday purchases

• American Express Membership Rewards: Pay with points at checkout when shopping with various merchants (including Amazon, Best Buy, Dell, Grubhub, Newegg, PayPal, Rite Aid, Saks Fifth Avenue, Seamless and Staples) at a rate of 0.7 cents per point
• Bilt Rewards: Pay with Bilt Points on Amazon at a rate of 0.7 cents per point; redeem points for merchandise, Bilt Home Collection items or Bilt Home Design Collection items
• Capital One miles: Use miles for purchases at Amazon and PayPal
• Chase Ultimate Rewards: Shop for Apple products through the Apple Ultimate Rewards Store at a rate of 1 cent per point, or pay with points at Amazon or PayPal at a rate of 0.8 cents per point
• Citi ThankYou Rewards: Use points for purchases at 1-800-Flowers, Amazon, Best Buy, bp/Amaco, CVS, Dollar General, Giant Eagle, Murphy USA, PayPal, Schnucks, Shell, Walgreens and Walmart by using your Citi ThankYou card to pay and then selecting “Yes” when the checkout screen asks whether you’d like to redeem points (there are purchase minimums and some items are excluded)
• Delta SkyMiles: Use miles for magazines through MagsForMiles or you can bid or purchase unique activities through SkyMiles Experiences
• IHG One Rewards: Shop for merchandise using your points through the IHG catalog, or use points to buy select games, software, movies, e-books, e-magazines and e-newspapers through IHG digital rewards
• Marriott Bonvoy: Shop for merchandise using your points at Marriott Bonvoy Shop with Points
• Southwest Rapid Rewards (only Rapid Rewards cardholders): Shop for merchandise using your points at Southwest Rapid Rewards More Rewards
• United MileagePlus: Shop for merchandise using your miles at MileagePlus Merchandise Awards, redeem miles for Apple products or redeem miles for a magazine or newspaper subscription
• Wyndham Rewards: Shop for merchandise, subscriptions and memberships using your points in the Wyndham Rewards online points catalog

Before redeeming for merchandise, check whether your order will have shipping costs and consider the shipping timeline. After all, you don’t want to use your points and miles for holiday purchases and not get the gift in time.

Related: 7 ways to redeem American Express Membership Rewards points for holiday gifts

• American Express Membership Rewards: 0.6 cents per point for statement credits
• Bilt Rewards: 0.55 cents per point for statement credits
• Capital One miles: 1 cent per mile for a statement credit to cover travel purchases in the last 90 days or 0.5 cents per mile for other statement credits or a check to your address
• Chase Ultimate Rewards: 1 to 1.5 cents per point (depending on which card you hold and the purchase category) through Chase’s Pay Yourself Back feature for a statement credit to cover purchases within the last 90 days; you can also get 1 cent per point for cash-back rewards to your checking or savings account
• Citi ThankYou Rewards: 1 cent per point for cash-back rewards, including a statement credit, direct deposit or check by mail

If you have an eligible Chase card and have charges already on your card that are eligible for Chase’s Pay Yourself Back feature, you could reimburse yourself for those purchases and use the money to buy holiday gifts.

Related: 3 things to consider for your holiday shopping credit card strategy