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Sunday, November 27, 2011

Point Redemption for Holiday Purchases? Do The Math!

Who doesn't have a tight budget for the holidays? Creative planning and redemption of credit card rewards points can help you stretch your holiday purchases. If you are a serious planner and want to use those membership points most effectively, then do the math, do the math, do the math!
Consider purchasing store gift cards with those points and using the gift cards to purchase gifts. Point redemption values are not all equal and when you compare values, you can sometimes find enormous savings, hidden on your credit card reward sites!

For example: I recently wanted to redeem points for a new IPod for my son's November birthday. He is a young adult musician so he requested an IPod with the most storage. On my credit card redemption site, the point redemption value of the "largest" IPod model was 91,500 while a smaller version was available for 70,250 points.

This seemed outrageous to me so I did a bit of research. I checked Best Buy online and saw the largest model IPod was available for about $250.00 retail. Returning to the aforementioned credit card site, the point redemption value for a $250 Best Buy gift card was 25,000 points--a savings of 66,500 points! That's a HUGE difference. Redeeming my points for a $250 Best Buy credit card and purchasing the IPod at Best Buy proved to be the most cost effective way of using my points to purchase this gift.

Let's review

o 91,500 Redemption points needed for IPod
o 25,000 Redemption points needed for one $250 Best Buy gift Card

o 66,500 Difference in points for gift card vs points for IPod

With the points savings I could redeem another 50,000 points, receive an additional $500 in Best Buy Gifts cards and still have 16,500 remaining in rewards points.

Net effect--for 75,000 points, I have the desired IPod PLUS an additional $500 in Best Buy gift cards for more holiday shopping!

Those are real numbers and seriously significant savings!
Note: (Apple is NOT a wholesaler friendly vendor and rarely discounts its merchandise which leaves third party sites like points rewards programs having to charge premium redemption rates for any Apple products).
Credit card redemption rates vary from site to site but a little research and creativity can help you save money using point redemption this season.

It pays to do your homework and plan in advance. It will take about three to four weeks for us to receive our $250 ‘rewards’ Best Buy card. While delayed birthday gratification is OK with our adult son, the timeline for using reward redemptions in this manner requires a bit of planning ahead. However, with proper planning and a little creative research, you could have some of those rewards points in your pocket (by way of redeemed points credit cards) to spend while hoofing it to your favorite stores on Black Friday or Small Business Saturday.

Let me know if you find similar creative ways to save using your point rewards program!