Credit-card issuers are making it easier to use your rewards points to make purchases on the spot.
This summer, Citigroup began allowing cardholders to use rewards points to buy concert tickets directly through ticket-seller LiveNation.com. American Express customers can use points for purchases made via Ticketmaster and Telecharge. Discover Financial Services, and American Express cardholders can use their rewards to shop on Amazon.com.
The deals add to the growing array of options available to rewards cardholders—and offer a chance to skirt the clumsy redemption process.
But the shopping power of the points varies significantly—from one cent per point to half that amount—and they don’t always provide the best rewards value. That makes it important to figure out how much your points are worth and how that compares to the value of other options before you start shopping.
Some deals carry restrictions. The Amazon offers don’t carry minimum point requirements, but consumers can’t use their rewards for certain items, such as Kindle downloads. American Express requires cardholders to redeem at least 2,000 points for a Ticketmaster or Telecharge purchase.
Card issuers such as J.P. Morgan and Discover say they are seeking additional retail partners. Consumers “see this as a real convenient way to redeem their cash-back bonus,” says Dana Traci, vice president of rewards at Discover, which introduced its Amazon offering last October. In July, it began allowing cardholders to use their rewards to make online purchases from Apple’s iTunes, Walt Disney’s Club Penguin and Facebook.
The deals are yet another sign of the stiff competition in the credit-card industry at a time when consumers are more cautious about spending, says John Grund, a partner at First Annapolis Consulting, an advisory firm focusing on the electronic-payments industry.