How to use points and miles to give gifts with $0 out-of-pocket cost

Editor's note: This post has been updated with new information.

Each holiday season, some consumers find they have absolutely no extra money for gifts. If you're in this situation, you could put your holiday purchases on a 0% introductory APR credit card if you know you'll be able to pay the charges off in a reasonable amount of time.

However, if you have points or miles tucked away in your loyalty accounts, a better option than taking on debt may be to redeem your rewards for gifts. After all, these rewards can serve as a lifeline and help you put a little magic under the tree during difficult times.

Here at The Points Guy, we've received numerous questions about using points and miles for gifts over the last two years. Many of these readers aren't interested in giving the gift of travel. Instead, they want to give more traditional gifts like toys and gift cards. For example, TPG's Summer Hull got this message from one of her followers on Instagram.

"Do any rewards programs allow you to use points for plain Visa gift cards… [?] I lost my job and am looking for a way to utilize rewards for Christmas giving to kids."

We typically don't recommend redeeming points and miles for non-travel redemptions since you can usually get a higher value when you redeem them for travel. But that math means nothing if cashing in some points can be the path to putting smiles on your kids' faces at the end of a trying year.

If you need to redeem points for some presents this year, here are some of the best ways to accomplish that goal.

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Redeem points for gift cards

There are two primary ways you can use gift cards purchased with miles and points as holiday gifts.

One option is to redeem your points or miles for gift cards to merchants like Target or Best Buy. Then, you can use those gift cards to purchase gifts at these stores.

The other option is to give the gift card as the gift itself. However, note that some programs will only mail physical gift cards to your home address. That means you'd need to pass on the gift card to your intended recipient once it arrives at your address. Some programs only offer electronic gift cards.

As you'll see below, some programs provide a better return for your points than others. But if you want to redeem your points or miles for gift cards, here are some options to consider:

• Citi ThankYou Rewards: Redeem at a rate of 1 cent per point usually; occasional sales may offer 1.25 cents per point.
• Chase Ultimate Rewards: Redeem at a rate of 1 cent per point usually; occasional sales may offer 1.11 cents per point.
• Capital One Venture Rewards: Redeem at a rate of 0.8 to 1 cent per mile.
• American Express Membership Rewards: Redeem at a rate of 0.7 to 1 cent per point for merchant-specific gift cards and 0.5 cents per point for American Express gift cards.
• Delta SkyMiles: Redeem at a rate of 0.9 cents per mile for Delta gift cards.
• Southwest Rapid Rewards (only Rapid Rewards cardholders): Redeem at a rate of 0.33 to 0.67 cents per point.
• Marriott Bonvoy: Redeem at a rate of 0.4 cents per point for Marriott gift cards and 0.2 to 0.33 cents per point for other gift cards.
• Wyndham Rewards: Redeem at a rate of 0.33 to 1.14 cents per point.
• United MileagePlus: Redeem at a rate of 0.3 cents per mile.
• Choice Privileges: Redeem at a rate of 0.31 cents per point.
• IHG Rewards: Redeem at a rate of 0.18 to 0.2 cents per point.

Out of all of the options discussed above, only American Express Membership Rewards allows you to redeem points for gift cards that aren't merchant-specific.

The reader who wrote to Summer might consider redeeming Amex Membership Rewards points for Amex gift cards at a rate of 0.5 cents per point. However, as you'll see in a subsequent section, redeeming for a statement credit at a rate of 0.6 cents per point would be a better option if that level of flexibility is required. Otherwise, the reader could get double that value by redeeming for select retailer-specific gift cards.

Related: Your complete guide to maximizing holiday purchases

Shop with points and miles

Some programs also allow you to redeem points and miles for merchandise. Here are some options to shop for holiday gifts using points and miles:

• Chase Ultimate Rewards
• Shop for Apple products through the Apple Ultimate Rewards Store at a rate of 1 cent per point.
• Shop with points at Amazon or PayPal at a rate of 0.8 cents per point.
• American Express Membership Rewards
• Pay with points at checkout when shopping with Amazon, Best Buy, Boxed, Dell, Grubhub, Newegg, PayPal, Rite Aid, Saks Fifth Avenue, Seamless and Staples at a rate of 0.7 cents per point.
• Shop with Membership Rewards points at a rate of 0.5 cents per point.
• Citi ThankYou Rewards
• Use points for purchases at Amazon (0.8 cents per point) and PayPal.
• Use points for statement credits when you shop with Best Buy or the 1-800-Flowers family of brands.
• Capital One Venture Rewards
• Use miles for purchases at Amazon and PayPal at a rate of 0.8 cents per mile.
• Hilton Honors
• Use points for purchases at Amazon at a rate of 0.2 cents per point.
• Shop for merchandise using your points at Hilton Honors Shopping Mall (only available to members in select regions).
• United MileagePlus
• Shop for merchandise using your miles at United MileagePlus Awards, including Apple products.
• Southwest Rapid Rewards (only Rapid Rewards cardholders)
• Shop for merchandise using your points at Southwest Rapid Rewards More Rewards.
• Marriott Bonvoy
• Shop for merchandise using your points at Marriott Bonvoy Shop with Points.
• IHG Rewards
• Shop for merchandise using your points using the IHG Rewards catalog.
• Use points to buy select games, software, movies, eBooks, eMagazines and eNewspapers through IHG Rewards digital rewards.
• Choice Privileges
• Shop for golf merchandise using the Golf by Choice program.
• Use your points for select magazine subscriptions through MagsforPoints.
• Wyndham Rewards
• Shop for merchandise using your points in Wyndham Rewards' online points catalog.

Before redeeming for merchandise, check whether there will be shipping costs on your order as well as the shipping timeline. After all, you don't want to use your points and miles for holiday purchases and then not get the gift in time.

Related: Why I'm not going to 'burn' my miles for merchandise

Redeem for statement credits or cash-back rewards

Finally, you can also redeem points and miles in some programs for statement credits or cash-back rewards. Here are your options with some of the most popular programs:

• Chase Ultimate Rewards
• 1.5 cents per point for Chase Sapphire Reserve cardholders and 1.25 cents per point for Chase Sapphire Preferred Card, Chase Freedom Flex and Chase Freedom Unlimited cardholders through Chase's Pay Yourself Back feature for a statement credit to cover select purchases within the last 90 days.
• 1 cent per point for cash-back rewards.
• Citi ThankYou Rewards
• 1 cent per point for cash-back rewards.
• 0.8 cents per point for a statement credit to cover select purchases.
• Capital One Venture Rewards
• 1 cent per mile for a statement credit to cover travel purchases in the last 90 days.
• 0.5 cents per mile for other statement credits or a check to your address.
• American Express Membership Rewards
• 0.6 cents per point for statement credits.
• Choice Privileges
• Convert points to cash with Bakkt.

If you have an eligible Chase card and can buy holiday gifts at a merchant that will code as an eligible category for Chase's Pay Yourself Back feature, doing so will likely provide the best value. Similarly, if you have charges already on your card from the last 90 days that are eligible for Chase's Pay Yourself Back feature, you could reimburse yourself for those purchases and use the money to buy holiday gifts.

Related: 3 reasons why you want a cash-back credit card in your wallet

Bottom line

On paper, redeeming points or miles for holiday gifts will provide less value than redeeming for travel. But if you don't have extra cash this holiday season, cashing in your points or miles may be the best way for you to buy holiday gifts.

Sometimes, it's best to ignore valuations and use your points and miles however it serves you best. If you do go that route, it's worth weighing which of the above methods will provide the best value for the rewards you have and the gifts you want to give.