Cashing Out Instead of Keeping Points for Credit Card Rewards during COVID-19

Covid-19 is continuing to take a massive toll on countries all over the world. In the US, lockdowns and restrictions are beginning to lift, but cases and fatalities are still increasing in much of the world, especially in the southern hemisphere. With things so uncertain right now, it’s hard to predict when international travel will be feasible again, especially to places like Central and South America where we had planned a 5 month trip this year which would have begun in March. With travel severely limited, the solvency of airlines and hotel chains in question, and income significantly down, corona virus has made me reconsider my credit card points and miles strategy.

Prior Plan

Currently, Whitney and I have a combined total of over 1,000,000 points/miles between the various airlines and hotel groups. We’ve been accumulating these for about 5 years, in anticipation of using them to decrease our costs for international trips once we reached semi-retirement in 2018. Last year on our 4 month trip to Europe, credit card rewards saved us thousands of dollars between free flights and 26 free hotel nights. The plan was to continue to use these points, while still accumulating them with credit card sign-up bonuses, to get more free flights and hotel stays on many future long international trips. With so many points/miles already and no clear insight as to when we’ll be able to start using them, cashing in some points and going for cash sign-up bonuses instead of accumulating more points is looking more appealing.

Cash Value

In the past when we weren’t taking very many trips for leisure, and instead were working back to back Travel PT contracts to increase our savings, I did cash in some points for extra money. But, usually this strategy isn’t ideal.

Credit card points are almost always more valuable when redeeming them for flights and hotels instead of cashing them in. For example, Chase points when cashed in are worth only $.01 each, but when transferring them to United, Southwest, or Hyatt, I’ve commonly gotten a value of $.02-$.05 per point depending on the situation. Once we determined that we’d be traveling more in the future, I completely stopped cashing in points and started stockpiling them, knowing I’d be able to get better value for them on flights and hotels during future trips domestically and internationally.

Although the value is less when cashing the points in, there are times when taking the cash makes sense. For us, I think now is one of those times.

 Major Uncertainty

It’s no surprise that the pandemic is having a major impact on tourism around the world. This puts all airlines and hotel chains in a tough position financially. It’s likely that some, if not all, of them will need government support to avoid bankruptcy in the coming months. If bankruptcy occurs, what happens to the points/miles that are held in their reward programs? If the past is any indication, in most cases, these points/miles would be unaffected, but that is far from a certainty. There have been situations in the past where an airline filing bankruptcy caused the reward program balances to be completely wiped out.

Even if the points/miles aren’t lost completely, it’s certainly possible that the value of the points could be reduced by increasing how many points it costs to redeem points for flights or hotels. Devaluations are a fairly common occurrence even during normal times, much less during financial hardship. With the possibility of some reward points being devalued or erased completely, cashing in points becomes more appealing.

Uncertainty right now doesn’t just apply to airlines and hotels though. Over 30 million Americans have lost their jobs since the beginning of the pandemic, which means financial uncertainty for households as well. For Whitney and I, despite being in good shape financially from saving heavily, we’re feeling this as well. Travel PT contracts are difficult to come by right now, and our income from online sources is down about 90% compared to where we were in February before the pandemic. Some extra money from cashing in points or from cash credit card sign-up bonuses would likely be welcome in many households across the country, including ours.

Future Plans

With everything considered above, we’ve decided to stop accumulating points/miles for now and to focus strictly on cashback credit card sign-up bonuses. In addition, we will likely be cashing in some of our points soon for some extra money and security while finances are a little tighter. For most of the miles/points already in reward program accounts with various airlines and hotel chains where cashing out isn’t an option or is an exceedingly bad value, we’re going to hold onto them for the future and hope they don’t get devalued or lost. But for points that have the ability to be cashed in at a decent rate, we’ll do that instead.

Whitney signed up for the Chase Sapphire Preferred card last month which is currently offering a sign-up bonus of 60,000 points (worth $600) after spending $4,000 in the first three months. Once she receives the bonus, I’ll be getting the card as well and we’ll both be cashing in those points. Although it pains me to lose the value we’d normally be able to get for those points with flights and hotels, the $1,200 we’ll get is worth it to us right now! If you haven’t gotten the bonus on this card yet, it might be worth getting and cashing in the points right now as well especially if household finances are tighter than normal.

Update: Since first writing this draft 2 weeks ago, Chase added the ability to reimburse charges at grocery stores, restaurants, and home improvement stores for 1.25 cents/point with the Chase Sapphire Preferred. This is huge since at grocery stores, in addition to getting groceries and household supplies, you can also buy gift cards to a variety of places for future use!

Some other good credit card sign-up bonuses to consider for extra cash include:


In normal times, it’s always preferable to redeem points/miles for flights and hotels to get the best value. With so much uncertainty around what will happen with reward programs if airlines and hotel chains file bankruptcy, as well as with many households finding themselves with significantly reduced income, now is a good time to take advantage of credit cards to earn cashback instead of miles/points. Cashing in some points right now can definitely make sense if you have a lot and aren’t sure when you’ll be able to redeem them for travel in the future.

What has been your strategy recently with credit card rewards and bonuses? What cards have you signed up for recently?

*Disclosure: some of the links above are our personal referral links for these credit cards. If you decide to sign up for one of these bonuses and would like to support the site, we would appreciate you using our links! Thank you in advance for your support!


9 thoughts on “Cashing Out Instead of Keeping Points for Credit Card Rewards during COVID-19

  1. Hi y’all, I just found out about FifthWheelPT from a podcast that featured both of you and first off I would like to say that I really appreciate all of the work that you do and the information you make so easily available to everyone that is considering travel therapy.

    I have one question about credit card reward leveraging and your experience with it. I accept that there is a significant amount of, “free cash,” out there for those that have the funds to match the deals you have outlined above (i.e. Cash Freedom Unlimited: $200 after $500 in spending, American Express Blue Cash: $150 after $1,000 in spending, Wells Fargo Cash Wise: $150 after $500 in spending) and that these deals can be leveraged to the benefit of the card holder. The only thing that keeps coming back to my mind is how your credit score and credit report are affected? Have you seen any change, either increase or decreased, in your credit score as a result of opening and closing multiple lines of credit per year/over the years? It strikes me that this could be flagged by creditors. Do you try to maintain a stable credit amount/credit utilization rate with the card changes? Am I overthinking this?

    Thank you both and again I am a huge fan and I am not trying to challenge or dispute your methods, but I always have a sense that there is a hidden cost or price to manipulating the conglomerate/major credit card providers and if I am wrong (I hope I am) then I can investigate more on this topic and see what works best for me!! 🙂

    Thanks again!


    1. Hey Anthony, thanks for the kind words! I really went overboard with credit card rewards when I first started. At one point, I opened more than 20 credit cards in about 11 months. My credit score dropped about 20 points during that time frame (still above 750) but it recovered within a year and is now higher than when I first started. Making on time payments and utilization rate seem to be much more important factors for your credit score and I always keep those as good as possible which probably makes a big difference.


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