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May 16, 2022, 11:15 a.m. EDT

I have 1.5 million credit card points I’ve been amassing for 15 years. I think of them as my emergency fund. But at this point, should I cash them out?

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Alisa Wolfson

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Question: I have 1.5 million points on my credit card that I have accumulated over 15 years.  Should I cash them in or keep accumulating? I’ve been using it as an emergency fund.

Answer: Experts say it’s time to use some of these rewards, mainly because they don’t become more valuable over time. “In fact, rewards tend to lose value because banks, airlines and hotels often change the rules and raise the amount of points or miles required for a free flight or free hotel stay,” says Ted Rossman, senior industry analyst at CreditCards.com. 

These sorts of devaluations are especially likely as the travel industry continues to recover from COVID. With a glut of points and miles in the system, providers want to liquidate these at ratios that are favorable to them.

“Cash them in! Points and miles rarely, if ever, appreciate in value. Credit card companies, along with airline and hotel loyalty programs, are consistently looking for ways to make their redemptions cost-effective. And this often translates into devaluation,” says Nick Ewen, director of content at The Points Guy.

Your emergency fund should be in savings, so cash in these points smartly

In other words, unlike your 401(k), you don’t want to be a points millionaire. “Look for ways to earn and burn these rewards along the way. They shouldn’t be an emergency fund, you need liquid cash for that,” says Rossman.

But with 1.5 million points accumulated, you do want to be thoughtful about how you use them. “Even though I’m saying it’s good to spend them and bad to hoard them, you also don’t want to throw them away,” says Rossman.

As for the best way to use them, Rossman says you should look to get at least 1 cent per point or mile. “Those 1.5 million points should be worth at least $15,000. If the cash back redemption rate is just 0.5 cents per point, I’d steer clear of redeeming that way,” says Rossman. Depending on the cash-back rules of this particular credit card, it might be worth considering liquidating a good number of these points to create a true emergency fund, but only if you can get at least 1 cent per point or mile. “Less than that and the math really points to travel,” says Rossman.

In general, it’s often best to transfer to airline or hotel partners when available. That’s particularly true if you know what you’re doing and have the flexibility to travel on the right dates and play the partners right, to the point you can get several cents per point or mile. “Some people get things like an $8,000 first class international airline ticket for 100,000 points. A more realistic goal might be something between 1.5 and 2 cents apiece,” says Rossman.

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