I used to travel a lot, but in recent years I’ve lost interest and don’t travel much anymore.
I have about 700k Chase Ultimate Rewards points, which could net me $7k if I redeem them, and I could easily throw that into a High Yield Savings Account (HYSA).
Since I’m not travelling, another option is gift cards at a 10-15% discount, but I’m not particularly interested in most options.
I also have a lot of points in other programs (about 900k combined spread across United, AA, Delta, Alaska, Hilton) that I could leverage if I decide to take a trip in the next couple of years.
My question is: how bad of a deal is it to cash out the Chase rewards points at a direct deposit rate of 100 points = $1 (1 cent per point)? Is there any compelling reason I shouldn’t do this, even if I don’t plan to travel in the foreseeable future and could instead earn interest in a HYSA?
I think it’s fine. Do what works best for you. Yes, it might not be the best use of points, but it’s better than holding onto them without any plans and not benefiting. Since you have 900k points elsewhere, it doesn’t make it a huge loss.
There’s no good or bad deal here. Having that many points sitting unused is devaluing their worth each year you don’t redeem them. If you have clear plans for a trip in the next couple of years, then keep them. But if not, $7k cash is a great amount to invest in a Roth IRA or a HYSA. Good luck!
Airlines and credit card points can depreciate over time. If I were in your situation, not planning any travel soon, I would cash out too. Right now, 1cpp investment is more valuable than potential devalued points in the future.
Also, by cashing out, you’re doing good for those of us who travel with points. The fewer who cash out, the more available award tickets and nights for us!
I did the same with 1.4 million MR earlier this year via Schwab Platinum. Put it all into my retirement savings, totaling $15k. I had no immediate travel plans. I’m now back up to another 500k MR as of today.
I wouldn’t worry too much. 1cpp is decent.
Chase sometimes runs 10/25/50% bonus offers for the Apple store, depending on your card. Last year it happened around November, which could be a better deal if you plan to make a big purchase like an iPhone or MacBook.