what are credit points really worth

What Are Credit Card Points Really Worth

The promise of points sounds great, but have you ever wondered what they are really worth?

To keep things short and sweet, the value of credit card points depends on how you can redeem them. If you have 100 points, and your credit card issuer says you can redeem them for $5 in cashback, then one point is worth 5 cents, but this is just one example.

Every rewards program comes with its own set of guidelines, restrictions, and ways for you to redeem your points. You’ll want to sign up for the card that aligns best with how you spend your money, what rewards you’d like to earn, and who makes it almost effortless for you to earn points.

How Do You Earn Points?

Debit and credit card points are given to you as a reward for your spending. Card issuers offer many different kinds of programs, so you can always shop around for the one that works best for you. 

Some banks will offer you points, while others reward you with travel miles and cashback. These programs entice you to use one service over another or use your card more often.

You earn points by spending money, so you should strategically use the card that aligns best with your lifestyle and spending habits. Some cards will give you points for every purchase you make, while others will give you points for making purchases on specific things or at particular places. 

The more you spend, the more you earn, making rewards programs a pretty tempting excuse to swipe again and again.

How Do You Earn Points?

Is Earning Points Worth It?

We’ll all take reward points when they’re pitched to us as a way to get things for “free,” but is that what’s really happening? Yes and no. 

On the one hand, you might be swiping your card when you find it most convenient and appropriate. In this case, you’re going about your everyday purchases with no influence from your card issuer or itch to earn rewards. Then, once you’ve accumulated enough points, you can trade them in. In this case, you’re using rewards points appropriately and to your advantage.

On the other hand, you might be swiping your card under circumstances where you might not have naturally swiped. For example, your card issuer might be offering double points in May for purchases at the movie theater, and you find yourself seeing five movies in one month. In this instance, you’re spending more to earn more, benefitting your credit card issuer more than you.

It’s natural to feel like redeeming your points to get a hotel stay or air fryer is a steal, but it’s not when you’re spending more than you would without the incentive of earning points.

Credit card reward points are a lot like arcade tickets. You may spend $100 on coins to earn 50 tickets from games and only end up being able to trade them in for a Nerf Gun that would have cost you $60 at Target. At least at the arcade you also get the fun of playing the games.  

If you think about rewards programs under a critical lens, there’s a wrong and a right way to go about participating in them. Rewards programs are great when they naturally align with your spending habits and have redemption options that genuinely work for you.

The number one thing you need to keep in mind when it comes to points is that you’re spending money to earn them – real-life, hard-earned money!

Is Earning Points Worth It?

Credit Card Points Vs. Debit Card Points

Credit card points and debit card points are only slightly different. First off, we’re not surprised if you didn’t know debit card rewards even exist; they’re rare but oh so great when you come across them.

Credit Card Reward Points

Earning points is enticing under any circumstance, but you're entering dangerous territory by using a credit card. The dangers of swiping credit cards are already extensive, now imagine what can go down with the additional temptation of reward points.

The big difference between using credit cards and debit cards to earn points is the matter of debt. Whenever you swipe a credit card, you’re borrowing money from your card issuer. Hopefully, your spending aligns with your budget, but more often than not, we overspend on our credit cards and end up with debt we didn’t plan on creating. 

Incurring debt is already easy to stumble into, but imagine going into even more debt than you would have just to earn rewards. We get it; travel points credit cards can seem so worth it at first, but if you find yourself making larger and larger purchases to bring you closer and closer to a vacation, then is it really worth it? Your spending might ultimately let you travel for free, but debt is baggage that nobody wants to carry.

When is swiping for points worth it?

Debit Card Reward Points

Debit card reward points are different because you don’t have to spend money that you don’t have to earn them. With the Extra debit card, you can earn points for all your typical purchases.

When you swipe your debit card, you’re pulling money from your checking account; not a line of credit or your savings account, meaning you’re only spending what you meant to. With a credit card, you may be tempted to spend over budget and go into debt just to earn points, but with a debit card, you can only spend what you have.

Not only does the Extra debit card let you earn rewards points, but you can earn them anywhere. Your favorite coffee shop, the gas station, Target, seriously, anywhere! You won’t be tempted to spend your money on one thing over another just for the points; all you have to do is spend like usual.

Spend, Earn, Enjoy

To us, meeting the spending requirements of credit cards or being limited to shopping at particular stores isn’t much of a rewards system. Rewards credit cards are better than average credit cards if you know how to use them responsibly, but they’re not the Credit Wizard’s #1 choice.

If you don’t want to use cash or a typical debit card and go unrewarded, but don’t want to fall into the trap of credit cards, switch to swiping with Extra. Extra is the first debit card that lets you build credit and earn rewards. 

With Extra, you can be rewarded for your everyday spending and avoid going into unnecessary debt. Extra makes the exclusive perks of credit cards available to everyone. Apply for the Extra debit card today and start earning rewards when you make your first Extra card swipe.

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