Key takeaways
- Gift card redemption is often seen as less valuable than other redemption options, which is true in most cases.
- Redeeming rewards for travel typically — though not always — offers the most bang for your buck.
- If you choose to redeem rewards for gift cards, look for promotions or bonuses to make it especially worthwhile.
Many credit card issuers allow you to purchase gift cards using points, miles or cash back — but are the redemptions worth it?
It depends.
Why redeem rewards for gift cards?
There are many reasons to redeem rewards for gift cards. You might decide to do so because:
- You can use gift cards to cover a simple gift. Once you purchase a gift card using rewards, you can then use it to buy gifts or even gift the card itself. For example, a Sephora or Ulta gift card may be a solid birthday present if you know someone who loves makeup. Or, if you need a gift for a baby shower, you could buy a Target gift card and use it to purchase the baby gift.
- You can prevent your credit card rewards from expiring due to account inactivity. The rules regarding rewards expiration vary by credit card, so if your points will expire soon, you should use them before you lose them.
The redemption value of gift cards
The value of your gift card redemption will vary by credit card and whether additional promotions are available.
Historically, gift card redemption has been seen as less valuable compared to other redemption options — which is still true in most cases. However, with cards like the Citi Rewards+® Card*, for example, you’ll get more value for your points when redeeming for gift cards (1 cent apiece) compared to redeeming them for cash back (0.5 cents a piece).
Gift card redemptions vs. travel redemptions
In most cases, redeeming rewards for travel instead of gift cards gets you the best value for your money. With the Chase Sapphire Preferred® Card, for example, you’ll earn 1.25 cents per point on travel redeemed through Chase Travel℠ and 1.5 cents per point in the case of the Chase Sapphire Reserve®. Further, there’s the potential for even greater reward value when you transfer rewards to a card’s hotel or airline partner. In the case of the Sapphire Reserve, points can be worth about 2.0 cents apiece toward high-value Chase transfer partner travel, according to Bankrate’s valuations.
What about gift card promotional offers?
Some credit cards offer discounts when redeeming your rewards for gift cards, meaning you’ll pay less than the card’s face value. For example, a $25 gift card may only cost you $20, in other words, you get to keep money in your pocket for the next person on your list.
In previous years, Chase has offered a 10 percent discount on gift card redemptions for brands like Macy’s and Panera Bread. Information about these offers typically comes directly to your inbox, but you can also check for updates on pages in your online account, such as Chase Offers and Amex Offers.
Do gift cards expire?
More than two in five U.S. adults (43 percent) have at least one unused gift card, according to Bankrate’s 2024 Gift Card Survey — which means many people are leaving money on the table.
Fortunately, due to the CARD Act of 2009, gift cards distributed by card issuers can’t expire for at least five years after the date of activation. Exact expiration policies vary by gift card merchant and card issuer and can be found in the card’s terms and conditions.
The bottom line
Redeeming rewards for travel typically offers the most value, but that doesn’t mean it’s not worthwhile to sometimes redeem your rewards for gift cards. Redeeming rewards for gift cards can allow you to take advantage of promotions or simply use up points to keep your account active.
If you don’t have upcoming travel plans or your points are on the verge of expiring, it may make sense to explore this route.
*Information about the Citi Rewards+® Card has been collected independently by Bankrate. Card details have not been reviewed or approved by the issuer.
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