If you're sitting on a pile of credit card points with no plans to use them, giving them away as a gift can sound like a good idea—and indeed, it can be. But there's a lot to think about when gifting away your credit card points. For example, does the person or charity you're giving those points to have a way to receive them? Does your credit card rewards program make gifting easy and reliable? Will your recipient be able to use the points you give?
Learn more about turning your credit card points and miles into satisfying gifts.
How to Get Credit Card Points
Stockpiling credit card points is one of the finer arts of frequent travelers and value-conscious shoppers. There are many ways to get credit card points, including:
- Welcome bonuses: Many cards offer a big lump sum of points if you spend a certain amount of money, usually within the first three months.
- Regular spending: Rewards credit cards have different ways of offering you credit card points based on your everyday spending.
- Purchasing points: If you're looking to top off your points tank so that you have enough to redeem for a certain purchase, or to reach a certain milestone, many rewards programs allow you to buy points with cash. This is common with frequent traveler programs. Just note that you will likely pay a premium for the points you acquire.
Who to Give Credit Card Points To
Credit card rewards points can be a great gift for family and friends, and you can also donate them to charity.
Giving Credit Card Points to Friends and Family
If you want to gift someone with a trip, you can gift them with credit card miles. But perhaps a better way would be to simply book a ticket for them using your own miles. That way, you don't have to worry about transfer fees or the recipient getting stuck with leftover points they won’t use.
If you do decide to gift someone your credit card points—such as to help them reach a redemption threshold for a reward, or if you're gifting non-travel-related points—it's a good idea to be in communication with them. For example, if they need a certain amount to complete a purchase, make sure you're able to transfer it to them.
As well, you’ll need their account number to execute the transfer. In order to preserve the surprise, you can present the gift without specifics on the occasion and then fill in the details afterward.
Giving someone credit card points that they can't or won't use is a bit like giving someone a coupon to a restaurant they're never going to visit. Your intentions are good, but another gift might be more appropriate.
Donating Credit Card Points to Charity
Donating your points to a charity is a worthy endeavor, but you're generally limited to charities that your credit card company has already pre-selected. For example, if you're earning United MileagePlus miles with one of the United credit cards, you can choose from one of 20 charities to donate your points to.
Keep in mind that sometimes your charity will receive points directly, such as with United Airlines' program. But other times, such as with American Express Membership Rewards, those points will be converted into cash, and the charity will receive a check instead.
How to Gift Credit Card Points
The exact way you gift credit card points varies with the reward program. Each credit card issuer is different. But in general, the process works like this:
- Log in to your account: You can do the entire process online, but if you'd prefer to speak with someone on the telephone, that's usually an option too.
- Visit the rewards center: This is where you'll find your redemption options. If donating your points is an option, you should be able to find it here. If you’re booking travel for someone, you can do it here, too. And if you're transferring points, there should be a clear process for that, as well.
- Complete the request: Pay attention to each screen carefully as you go through to make sure that there aren't any surprises and that you'll be able to finish booking your gift successfully.
What to Watch out For: Rules, Regulations and Reminders
If you’re wondering whether credit card points are considered taxable income, the answer is generally no. The IRS considers credit card rewards as a discount on your spending, rather than income.
However, be aware a gift is taxable if it exceeds the annual gift exclusion amount—$15,000 for 2021 and $16,000 for 2022. Gift tax is payable by the giver, but no tax is paid until gifts exceed the lifetime exclusion, which is $11.7 million for 2021 and $12.06 million for 2022. Unless you've been sitting on points for quite some time, chances are you won't need to worry about paying gift tax on your points transfer.
The annual exclusion for gift tax is per recipient, which means you can give up to $15,000, per year in 2021 and $16,000 in 2022, to as many people as you like before the gift tax rules come into play.
Transaction Costs to Consider
Some credit card and travel rewards programs charge transfer fees in order to scoot your points to someone else's account. If you're booking travel for someone else, there may be small fees for booking reward travel, too. And if you’re purchasing points, you may pay service fees, on top of inflated costs for the points themselves. Check with your specific credit card rewards program for more details.
Creative Gift Presentation Ideas
Credit card points may not be the easiest present to wrap, but you can get creative with the presentation. Here are some ideas.
- Send an appropriately themed card: If you’re gifting airline miles or hotel points, announce it with a postcard from one of the recipient’s favorite vacation spots. For general purpose credit card reward points meant for purchases other than travel, you could slip a note into a greeting card with ideas for how to spend the points.
- Create a custom gift card: Make a DIY gift card from cardboard or colored paper and markers. Specify what the gift is and how to redeem it to get the points.
- Create a digital or in-person scavenger hunt: How this goes over will depend on the gift-giving occasion (and the adventurousness of the recipient). For example, you could create a list of fun clues that you hide in or under objects around the house and that lead the recipient to their main present at the end. You can use one of the other ideas here for the final presentation, or just write a clever note explaining what the gift recipient has actually found.
- A small box of glitter or confetti: Each shard of shine or fleck of color represents one credit card reward point. Accompany the box of fun with a note or card explaining that.
- A jar of pennies: We consider 1 cent to be the floor for credit card reward point redemption value. While 10,000 pennies might be a little much for a stocking stuffer, a small jar of pennies (and a note of explanation) will get the point(s) across.
Benefits of Gifting Credit Card Points
Gifting someone your unused credit card points can be a great way to use points you may not have a plan for. And it can be a thoughtful gift for the rewards-card hacker on your list. But keep in mind that there is a lot to consider in terms of transaction costs and logistics. It might be a good idea to consider other options, too. For example, redeeming your points as cash and then gifting the money might be easier and cheaper. This also has the added advantage of potentially allowing you to claim a deduction on your taxes if donating cash to a charitable organization. Check with your financial or tax advisor to be sure.