When is it OK to Cash Out Credit Card Points (RANT)

Cashing out Credit Card points is rarely a bad thing. We've been brainwashed into thinking trips to the Maldives and Bora Bora are free. There are so many ways to use your rewards!
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[@SENDO-X]

Exactly! I cashed out all my usbank points for over $1000 in vehicle repairs. Please dont ever choose hoarding points for a trip when you KNOW you have other financial obligations that need priority!

[@LukesPointsandMiles]

Great advice!

[@Just_Stevo]

Uncle Luke speaking truths! I save 27% of my gross pay AND play the credit card game.

[@LukesPointsandMiles]

i like that!!

[@theclown888]

I am literally the hybrid option. Investing MR points via my Schwab brokerage, and paying cash as a supplement to work-funded travel. Nice video!

[@LukesPointsandMiles]

Thanks! and thanks for watching!!

[@augiestravels]

I’m all about money for a rainy day and retirement first and foremost.

[@LukesPointsandMiles]

Can’t argue that!

[@KennyHyde]

Thanks for this video, this is one of the reasons I'm in the Chase and Citi ecosystems, where I can have the option of cashing out at 1 cpp if needed. Also have toyed with the idea of setting some points aside for cashing out and putting into the S&P 500, especially when travel slows down for us.

[@LukesPointsandMiles]

Good idea!!

[@habeshafinance1710]

Thanks uncle Luke for this honest opinion, let’s use some of my points for my car payment. I know all my this year travel booked already 😮

[@LukesPointsandMiles]

There you go. Points, miles and cash back are all tools.

[@jimmyjames6492]

Cash is always 👑👑👑 Thanks for the info + video!

[@LukesPointsandMiles]

Yes sir!!! Thanks for watching.

[@krs1905]

They’re your points, cash out whenever you want.

[@LukesPointsandMiles]

Preach!

[@krs1905]

@@LukesPointsandMiles I think you’re the one preaching 😉

[@LukesPointsandMiles]

@@krs1905 thank you 🙏🏾, nephew

[@AP_808]

100% right. I agree on the IRA maybe less so on the 6 figures but I agree investments in education and capital are almost always great investments

[@LukesPointsandMiles]

Six figures part can really be different depending on what part of the world you live in but it’s generally regarded as a generic benchmark for when someone is making decent money.

[@PatrickDKing]

Rates paying close to 5% on money, good time to cash out.

[@LukesPointsandMiles]

I think you’re right. You can always earn more points.

[@krs1905]

Redeeming points is tax free, whether it’s points redemptions or cash back. I use points to get money back out of my business tax free

[@LukesPointsandMiles]

and it can become substantial over time!

[@Just_Stevo]

Yes. It is tax free "income".

[@LukesPointsandMiles]

@@Just_Stevo it’s lovely.

[@seand99x]

FACTS great video Luke

[@LukesPointsandMiles]

Thank you sir!!

[@fnad3999]

Hey unc I cashed out 500k Mr points to go towards a retaining wall in my backyard so I can make a putting green not sure I’m doing the points and miles game right

[@LukesPointsandMiles]

Hey if you like golf,⛳️ you’re doing just fine.

[@KeyKEYadventures]

💯💯

[@LukesPointsandMiles]

Thanks for watching, Key!

[@TheCreditFrog]

Travel is not free. That's for sure! I'm a fan of the hybrid credit card setup for this reason. Cash back from multipliers, and welcome offers for those big time redemptions! But yes, Roth IRA is important 😎. Nice Luke! Can't wait to hear about your recent trip!

[@LukesPointsandMiles]

I’ll be talking about it Sunday night live!!! @ 7pm est!!

[@MH_6160]

I stopped following most credit card space personalities… NOT everyone cares about "aspirational travel" or flying for that matter. Last quarter I cashed out some points and bought both my kids new computers for school and new tires for my truck… far more value than staying in the Maldives, at least for me.

[@LukesPointsandMiles]

Cash is a great tool!

[@PatrickDKing]

True. Plus with the Boeing scandals I'm not flying in the immediate future either.

[@LukesPointsandMiles]

@@PatrickDKing oh wow! I’m not going to let a few parts flying off the plane stop me. Ahah

[@MH_6160]

@@LukesPointsandMiles 😂😩

[@ronburn]

Agree! I've used Hyatt points for a Hyatt Place, and Hilton points for Hampton Inns. Were they the best CPP redemptions? Absolutely not, but it allowed my family of 5 to have a great vacation in the places we wanted to visit. Not everywhere has a Park Hyatt or a Waldorf Astoria.

[@LukesPointsandMiles]

Hey don’t knock budget stays. My wife laughed when we left the park Hyatt in Zurich to stay at a holiday inn express in Geneva. Haha !

[@docsays]

Good points Luke. Although i now prioritize points for travel, in the past i have cashed out many times. Last year i earned the CIC 75k bonus + $300 chase checking offer so that was over $1000 cash straight into my hy savings account.

[@LukesPointsandMiles]

Love that technique.

[@elliottnixon-wq6sp]

Nice rant! Another fun point here is that reward currencies are built on the sandwich shop punch card model: buy ten, get one. So much for free travel. Cashed out points are cash whereas airline miles are funny money

[@LukesPointsandMiles]

Yeah. Try getting new tires with Skymiles!

[@johndematatis9718]

I went a little crazy with my spending last month and was potentially going to pay interest on a card but I cashed out about 10k points to avoid that. Not a bad thing for me. Time to reign it in and get a little cushion in the checking account

[@LukesPointsandMiles]

Yeah I agree with that.

[@thirtynine392001]

Great perspective, Uncle Luke. We all have to do what works best for our own situations. Personally, I favor simplicity and run a two card setup (one cashback, the other points) from the same bank. I like having my "earnings" all under one roof so that I can flex between redeeming for either cash or travel as needed. Neither card in my setup is the best earner in any category, but they're "good enough" earners and I still come out ahead. I can be happy with that. 😊

[@LukesPointsandMiles]

Oh now, do tell us what duo you’re running!!

[@thirtynine392001]

@LukesPointsandMiles Oh, it's nothing special: USAA Cashback Rewards Plus for gas (5%) and groceries (5% at the Commissary, 2% out in town) and 1% on everything else plus the USAA Eagle Navigator for travel and transit (3X) and 2X on everything else. 😊

[@LukesPointsandMiles]

@@thirtynine392001 usaa is a great bank!

[@barbaraharris4343]

Thank you for this video. I just found this hobby trying to save on domestic travel for a family of 5 and so much information seems geared towards business class and international travel for 1-2 people. It’s hard to find information that is practical for my lifestyle.

[@LukesPointsandMiles]

Thank you for the comment! I’d love to make more content for the average family.

[@docsays]

- also check Dugroz Reports. He does family travel & economy redemptions for the average family.

[@thejokerspeaks]

I'm starting to buy MLP stock outside my Roth IRA, as an alternative to the passive income of owning rental properties. Making a 10% dividend sounds a lot sweeter than hoarding points that are likely to devalued in the opposite direction.

[@LukesPointsandMiles]

I’d love to hear which MPS’s you like!

[@thejokerspeaks]

@@LukesPointsandMiles ARLP, ET, and BSM for energy. I also own WLKP, with others on my watch list to diversify when the time seems right.

[@Dial_J_for_Josh]

Wow Luke, you really innovate with these CC topics in this community. It's typically looked down upon when people cash out because they aren't optimizing for "value". However, as you said, what is more valuable in the long run? Booking first class flights and 5-star hotels or investing that cashback for the future. As you said, there is no right answer, but it definitely depends on the person and their needs. Amazing video.

[@LukesPointsandMiles]

Thanks Josh. I just like to look at the whole game.

[@JohnWick-o5v]

my go to cashback are Alliant & Redstone for UR (Hyatt & Aeroplan) for MR (Aeroplan or Krisflyer)

[@LukesPointsandMiles]

Nice!

[@millennialmoneymom]

Slow clap for this 🎉 👏

[@paulstein916]

Welcome home Luke. I hope you had a great trip. Very true about point redemptions but I still have a hard time cashing out MR points at only 0.6 CPP. I like the idea of a hybrid setup with some of the other card issuers where I have more appealing redemption options.

[@LukesPointsandMiles]

Yeah I wouldn’t cash out at anything less than 1 cpp. But there are ways to get more cash value out of those MR points.

[@Xavier_ID.]

Love the perceptive! Couldn’t agree more. Can’t fall into the trap. Take care of what is important first and the rest will fall into place 👍🏼

[@LukesPointsandMiles]

💯

[@WealthOfOpportunity]

Exactly how I’m treating the SUB for the Strata Premier. Cash out

[@LukesPointsandMiles]

Cash is King!

[@joemarino1582]

You hit on a lot of good points, no pun intended, lol. Your absolutely correct, everyone’s situation is not the same…👍👍👍

[@LukesPointsandMiles]

Thanks for watching!!

[@TechYodaSV]

Now Luke, how are you gonna talk about me without mentioning me? (The guy who turns everything into investments with a hybrid system) 🤣

[@LukesPointsandMiles]

I like your style! I will credit you in the next video “how to become Warren Buffett with credit cards - for free!!”

[@dizzyg6862]

Great video. Cashing out to pay off high interest debt is always the best redemption option

[@LukesPointsandMiles]

Totally agree! No one should carry a balance - pay it off asap!!!

[@JuanGarcia-hr1wf]

Well said Luke 👏

[@LukesPointsandMiles]

Thanks for watching, Juan!!

[@druiz012]

Spot on. Dont play the game if you dont have your finances right. To me that includes roth, 401k, emergency fund...

[@LukesPointsandMiles]

Yesssssir!!

[@basaindon]

Yes, I agree. The big factor here is travel cards not only cost money (because no travel is truly free), but that they also induce spending by design. The Amex coupon books are the biggest culprit, but most benefits of travel cards (status, checked bags, credits) only work if you are spending at least some money. Put another way: buying things on sale is still more expensive than buying nothing. It drives me nuts to see people recommending heavy churning or hefty AF cards to people with below national average incomes. Could they game it to maximize the benefits? Sure. But if induced spending gets me, I just sock back a little less in my savings or maybe dip into it temporarily (and I probably had fun doing it). For people that don't have a big cushion, getting them on the wrong side of financial engineering by issuers can be catastrophic.

[@LukesPointsandMiles]

You have a good point. We have 23 year olds making $35k a year with platinum cards and they’re telling everyone that they get positive value from it.

[@riosafado]

hey uncle Luke, please do a trip review🙌

[@LukesPointsandMiles]

I'll talk about my latest trip on my LIVE!!! tomorrow at 7pm!

[@CliftJohn]

Luke is cooking today 🔥🔥🔥

[@LukesPointsandMiles]

Let me cook!!!

[@masongonzalez979]

Like the thumbnail! Also would love to see you and Spencer Johnson do an interview or live together since it seems like you have such opposite approach’s.

[@LukesPointsandMiles]

That’s a great idea!!

[@Andrew_ryan_]

“Some of it might not make any sense” 😂

[@LukesPointsandMiles]

Story of my life!

[@Nick-1828]

Love the perspective Uncle Luke! Gotta make sure you’re taken care of first (emergency fund, retirement and 529 if you got little ones). Personally I wouldn’t even consider paying an AF for a credit card if I didn’t have those things covered first

[@LukesPointsandMiles]

I agree 💯

[@volkswagen4866]

There is no free lunch.

[@LukesPointsandMiles]

So true.