Sitting on Credit Card Points for as Long as Possible? You Might Want to Think Twice

Many people use credit cards to pay for everyday purchases. Using a rewards credit card allows you to get rewarded when you spend money. If you use rewards credit cards, you should plan how to redeem your rewards for maximum value.

A lot of people wait to redeem their points, thinking it's best to wait until they earn more. But that could be a poor strategy. Discover why you may want to redeem your credit card rewards sooner rather than waiting to use them later.

Here's how Americans are using their credit card rewards

The Motley Fool Ascent recently conducted a research study to examine Americans' generational credit card habits. The 2023 Generational Credit Card Habits study found that rewards credit cards and cash back credit cards are popular choices for Americans.

The study polled 2,000 Americans, from baby boomers to Gen Zers. Fifty-six percent of all respondents have cash back credit cards, and 49% of respondents have rewards credit cards. However, the study also found that nearly half of all respondents aren't rushing to redeem their credit card rewards.

In fact, 49% of all respondents allow their credit card rewards to accrue as long as possible. Only 25% of all respondents redeem their rewards as soon as they can. It's essential to make redemption moves that match your needs and goals. But you may want to rethink your redemption strategy if you're sitting on a stash of credit card rewards.

Three reasons not to hoard your credit card rewards

Perhaps you're waiting to redeem your rewards until you reach a goal you've set, or you're still trying to figure out how to use your rewards in the best way, so you're not in a rush to make a redemption move. But hoarding your rewards could come with unintended negative consequences.

Here are a few reasons why you should reconsider holding on to your credit card rewards.

1. Credit card rewards programs can change

Credit card rewards programs evolve, and the program benefits available today may differ a few months or years from now. For example, your credit card issuer may change what redemption methods are available to cardholders. If you hope to redeem your credit card rewards in a specific way, don't wait. Otherwise, you may miss out.

2. Your rewards may become less valuable

The value of your credit card rewards can change over time. One reason is that credit card issuers can make programs and redemption changes at any time. Your rewards can also lose value as you continue to pay annual fees while your points or miles sit unused. You can maximize the value you get from your points or miles by making a redemption sooner.

3. You could lose your rewards

Most credit card rewards don't expire if you keep your card and your account is in good standing. But if your credit card issuer decides to shut down your account with little notice, you could lose your points or miles. Credit card companies can cancel accounts for various reasons, such as account inactivity or breach of account terms. If you want to make sure you get to use your rewards, don't hoard them forever.

Put your credit card rewards to use

You've earned your credit card rewards, so use them. If you need help deciding how to use your rewards, look online for guidance. The Ascent publishes various credit card articles on maximizing your credit card rewards. You can benefit from your hard work by using your points and miles. And if you're looking for a new credit card, check out our list of the best credit cards.