Go Ahead, Use Points and Miles on Ordinary Expenses

There’s a surprisingly simple way to squeeze plenty of value out of your points and miles — and it doesn’t require booking a first-class apartment on a plane or staying…

There’s a surprisingly simple way to squeeze plenty of value out of your points and miles — and it doesn’t require booking a first-class apartment on a plane or staying at a swanky resort in the Maldives.

Here’s the play: Redeem your credit card rewards for ordinary stuff.

Unexciting? Maybe. But it can be a brilliant move. Using points and miles to zap routine expenses — such as monthly bills, domestic getaways or trips to visit family — can help you trim spending, stay true to your values and snag good deals you might otherwise overlook.

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You can shrink your regular spending

When it comes to redeeming points and miles, you generally have two options. You can:

  • Upgrade your lifestyle: Use rewards to pay for items and services you wouldn’t normally purchase.
  • Cover regular expenses: Use rewards to pay for items and services you would buy anyway.

Both options can be worthwhile. But if you’re looking to reduce your overall spending, the latter is a better bet.

“For me, having the points just stretches my dollars a little more,” says Melissa Terrio of Boston, who works as a director of graduate admissions at a university and often uses points from her rewards card to cover regular expenses.

She frequently redeems points to fly to Phoenix, where her family lives, during the holidays when cash prices for plane tickets soar. And on a couple of occasions, when unexpected expenses have come up, she’s redeemed points for a statement credit to reduce her monthly bill.

“I had to put new brakes on my car. It was a $2,000 expense,” says Terrio, who paid for the repair with her rewards card. She always pays off her balance in full so she doesn’t accrue interest, she adds. In this case, “I paid half of it off out of my savings and the other half I was able to pay off through the points that I have.”

Because she travels often for her job and is reimbursed for her travel expenses, she’s able to rack up rewards on her card quickly.

Why it’s valuable: Tackling your regular expenses with points and miles can help you dodge interest charges, eliminate debt, shore up your emergency fund or save for retirement — and that might add up to significant savings in the long run.

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You can be true to yourself

Your #VacationGoals might not be the same as your neighbor’s — and that’s totally OK. And if you don’t clinch the best redemption rate possible in the process? That’s OK, too.

“It all really comes down to what your personal priorities are and what you either need or want help affording, aside from your regular discretionary income,” says Matt Becker, a certified financial planner and founder of the financial planning practice Mom and Dad Money, based in Pensacola, Florida.

For Becker, regularly traveling with his family to visit relatives in Boston is a top priority.

“My wife and I have two boys, so buying four plane tickets several times a year gets pretty expensive,” Becker says. Round-trip tickets to Boston from Pensacola for the four of them often run about $1,200 in cash.

But by paying for everyday purchases with credit cards, he racked up plenty of airline points and qualified for a Southwest Airlines Companion Pass, which allows one traveler to accompany him on flights just for the cost of taxes and fees while it’s valid. With the points and the pass combined, he’s been able to cover multiple family trips.

Why it’s valuable: If you’re redeeming rewards for something that’s important to you, you’re already coming out ahead — even if you’re not getting the best redemption value ever.

You can still score great deals

Great redemption values can be easy to spot when redeeming for overseas trips. But you can find outstanding deals for domestic travel, too. For maximizers, that’s what makes ordinary redemptions worth considering.

“When there are limited flights to a certain destination, that can be a good time to use an award ticket,” says Charles McCool, travel expert and founder of the blog McCool Travel, based in Reston, Virginia. And when cash prices go up — say, during the holidays, or for last-minute flights — paying with rewards can be a smart move, he adds.

On one trip, McCool flew from Washington, D.C., to Santa Barbara, California, then drove to Phoenix in a rental car and flew back to Washington, D.C. The trip cost him only 25,000 airline miles, but would have been over $900 if he had paid in cash, he says. He crafted that itinerary specifically to maximize the value of his rewards, he notes.

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Why it’s valuable: Crafting a high-value redemption — even when you’re traveling within the U.S. — is possible, and can help you stretch your points and miles further.

This article was written by NerdWallet and was originally published by Forbes.