Donating rewards or cash to charity
If you're looking to give to charity this holiday season but don't want to dip into your bank account, donating unused credit card rewards, hotel points and airline miles can be a helpful alternative. In some cases, the charity can use the rewards for travel needs, and in other cases, the issuer can convert them to cash for the charity.
And nonprofits' needs are skyrocketing amid the COVID-19 pandemic. A July 2020 analysis by Candid, a group that provides information about nonprofits, found that more than one-third of them may be forced to shutter as a result of the twin crises of the pandemic and recession.
Here are times it can make sense to donate from your credit card rewards stash.
When donating points works
1. When you (and the charity) will get good value for the points
Sometimes point values are diminished if you donate them. Other times, it's a fair or even superior value.
Citi lets eligible cardholders donate Thankyou points to a handful of charities at a value of 1 cent each. That's the baseline value you'd want for travel redemption, and it's a better value than redeeming for cash back.
Those who hold eligible Chase credit cards can redeem their points for statement credits to cover donations to about a dozen charities, again at a rate that's higher than the penny-per-point value for cash back. 2. When the charity gets a kicker Through Dec. 1, 2020 (aka “Giving Tuesday”), American Express is offering a 10x match when you donate points to Feeding America. Discover lets cardholders donate rewards to several charities and contributes an extra $25,000 to one that receives the most donations annually.
United Airlines' Miles on a Mission platform runs periodic campaigns to support nonprofits. The company will roll out a new initiative starting Tuesday with a match limit of 125,000 miles per charity.
3. When your supply outpaces your demand
Points and miles don't earn interest and can be devalued. If you're sitting on more points than you'll use in the next two years, donating them may make sense.