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TIL: Don't use your points directly on Amazon
Maybe everyone knows this, but I suspect not. For years, I've been using the points I earn on a Chase Freedom card directly on Amazon. I just found out today that I'm only getting 80% of the value. Redeeming 26,345 points at Amazon yields $210.76. Redeeming 26,345 points on the Chase website (for an Amazon gift card) yields $263.45.
The Chase Amazon Prime Visa does give 100% of value directly on Amazon's site.
This may not be viable for everyone, but you should also be aware that Chase points are transferable between cards. So if you have the Freedom card, you can transfer those points to your Sapphire Reserve card to redeem.
So when you earn 5% on the Freedom card, then transfer them to the Sapphire Reserve, if you redeem the points for travel (50% bonus), it's as if you effectively earned 7.5% cash back.
Long story short: spend on the card where you accumulate the most points and redeem on the card with the best benefit.
Yes, having a few Chase cards to rack up points to transfer to your Reserve can be quite lucrative. Even moreso if you eat out, take rides, or book flights/hotels often (3% on restaurants and travel on the Reserve). It’s a bit shocking Chase has let it remain this good for so long, usually points systems get nerfed in short order.
If you have any cards with points, which everyone probably should, then it's worth looking around to see what and how exactly those points can be redeemed.
Yours is a great example: 80% value shopping directly at Amazon vs 100% value buying gift cards instead. However, there's more to it! Chase sometimes offers certain gift cards at better-than-100% redemption values. So like you could spend 10,000 points to get a 100 dollar Amazon gift card, but they might have a promotion on Lowe's gift cards where a 100 dollar gift card will only cost you 9,000 points.
But that's not all! They also have an option called 'pay yourself back' where you can directly apply your points to purchases. So you could use those same 10,000 points to pay off a 100 dollar purchase, which sounds about the same as redeeming it for an Amazon card or just giving yourself an account credit for 100 bucks. But they sometimes have special categories that get a 25% bonus. So you could instead pay off a 125 dollar bill with that same 10,000 points, giving you way more bang for your buck. Currently the special category is charities, but I believe the one before that was restaurants.
But this pretty much applies to various other cards too. Whichever points card you have, it's worth checking out the different options you have for redeeming said points. Some options might be significantly better than others for the exact same points balance.
If you really want to get into it, the most efficient way to spend points is by converting them to partners for point equivalents. For example, if you have a Chase Sapphire, you can transfer the points to, say, United, or Hyatt. That's where you'll get the most bang for your buck, often being 2x, or 2.5x the value if you converted 1 point = 1 cent.
Do the math before trying this. All points are not valued equally. You may be better off using your Sapphire card to book a United flight via the Chase Portal rather than transferring points to United 1:1 and booking direct.
Oh absolutely, though that may not apply to someone who doesn't travel much. The main point is that you should look to see what's out there before spending your points so you know you're getting the best bang for your buck.
My Chase Visa redeems 1:1 on Amazon. I think this may be specific to the Chase Freedom card.
It is. I have both cards, and the Chase Amazon card is 1:1 while the Freedom card is 80%.
Even with the Amazon card having 1:1 points, you're technically better off doing cash back / statement credit than using the points for an Amazon purchase. Since you get 5% back on Amazon purchases, you're missing out on that 5% when you shop with points instead of dollars.
Dang -- I feel really stupid right now -- thank you for stating what should have been obvious.
Thank you!