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What's the Best Way to Use My Credit Card Rewards and Travel Points?

Back in September, we published serial traveler Matthew Kepnes' ultimate travel hacking guide, … Read more Read more

The Simplest, Most Flexible Reward: Cash Back

Using your rewards for cash back or statement credits is the most straightforward and transparent route. Most credit cards that show rewards as points offer a simple 1 point = 1 cent conversion, so you know the true value of each point, unlike other reward categories. (If you shop a lot on Amazon, you might also consider credit cards that reward you for Amazon purchases to kind of pay you in cash.)

Most airlines have frequent flyer programs that accrue miles you can redeem for tickets. If… Read more Read more

Pros. You know what you're getting and can use the cash back for anything you want. Plus, cash is king.

Cons. Other reward types can make your points or miles go farther. Also, most programs require you to meet a certain threshold before you can redeem your rewards for cash.

For Discounted Gifts or Things You Need Anyway: Gift Cards

Redeeming your rewards for gift cards can be a great value on two conditions: 1) You actually would use those gift cards for things you were going to buy anyway or to give as gifts and 2) You

get the gift cards during your credit card company's rewards sale. Photo by 401(K) 2012

The first condition is fairly obvious; gift cards are useless if you won't use them or they cause you to buy unnecessary stuff. For the second rule of thumb, it's better to get your gift cards when they're discounted, e.g. 8,000 points for a $100 gift card instead of the typical 10,000 points requirement. Each point is then worth more than typical cash back rewards (in this example, 1.25 cents). It also doesn't make sense to use your rewards for gift cards unless they're discounted when there are lots of other ways to get gift cards for less than cash value .

Assuming you have something to spend them on, gift cards are as good as money. One handy difference … Read more Read more

Look for a "rewards on sale" section in your program to see what's available or keep an eye on deals forums like FatWallet and Slickdeals where members post frequent rewards sales.

Pros. Gift cards can be as good as money if you have a use for them, and rewards sales offer them at a great discount. Heck, you can even turn that discounted gift card around and sell them to a secondhand gift card site for even more return on your rewards.

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