The Points Mom

Redeeming Points And Miles-The Difference Between A Point Bonus/Discount Versus A Point Rebate

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When you redeem your credit card points and miles to pay for travel, many cards offer some sort of incentive that allows you to use less points for your redemption.  These incentives can come in 2 forms.  A point bonus/discount (different cards call them either term but for our purposes they are synonymous) or a point rebate.

A point discount/bonus works in that one point equals more than .01 value in travel.  For example, when you redeem Chase Ultimate Rewards points, one point equals $0.0125 incremental value on travel. This means a $250 airline ticket will cost you 20,000 Chase Ultimate Rewards points. (instead of 25,000 points) You get this 20% off discount automatically when you redeem your points for travel.  In summary, you only needed 20,000 points in your account to book the travel.

A point rebate is a little different in that you get the “discount” after you use the points to book the travel.  So take for example, Barclaycard Arrival miles.  With this card you choose any travel purchase within the last 120 days and redeem your miles for a travel statement credit toward that travel.  After that, a travel redemption of 10% bonus miles are added back to your account.  So in summary, you need the full amount of miles required to book the travel.  

You can read my post Comparing Travel Redemption Options of the Major Banks  to learn more about cards that offer point bonuses/discounts upon redemption.  You can also read my post Cards That Offer Rebates On Point Redemptions to learn about cards that offer point rebates after you redeem your points.