How to Gift Credit Card Points

If you’re not using your credit card points, it might be possible for someone else to benefit from them.

How to Earn Credit Card Points

You can earn credit card points in various ways, including through welcome bonuses, regular spending, and purchasing points. Most credit card rewards programs allow you to transfer miles to family and friends, and in some cases, charitable organizations. You can transfer points to someone else via your online account or over the phone with your credit card issuer. Inquire with your credit card issuer about any fees related to transferring credit card points to someone else.

Who You Can Gift Credit Card Points To

Credit card reward points can make a great gift for family and friends, and you can also donate them to charities. If you want to gift someone a trip, you can give them your credit card miles. However, the best way might simply be to book a ticket for them using your own miles. This way, you won’t have to worry about transfer fees or the recipient leaving points unused. If you decide to gift credit card points to someone, like helping them reach a redemption threshold for a reward, or if you’re giving away non-travel-related points, it’s a good idea to stay in contact with them. For example, if they need a specific amount to complete a purchase, make sure you can transfer it to the recipient. You will also need their account number to complete the transfer. To maintain the surprise, you can give the gift without specifying the details of the event and then fill in the details later.

How to Gift Credit Card Points

The exact method of gifting credit card points varies by rewards program. Each credit card issuer is different. But in general, the process works as follows:

1. Log in to your account: You can complete the entire process online, but if you prefer to talk to someone over the phone, this is usually an option as well.
2. Visit the rewards center: Here you’ll find your redemption options. If you can donate your points, you should be able to find it here. If you’re booking travel for someone, you can do that here as well. And if you’re transferring points, there should also be a clear process for that.
3. Complete the request: Pay close attention to each screen as you go through the process to ensure there are no surprises and that you’ll be able to successfully complete the gift reservation.

Tax Implications of Credit Card Points

If you’re wondering whether credit card points are considered taxable income, the answer is both yes and no. For example, you might be required to pay taxes if you receive a sign-up bonus of over $600 that does not require any spending. However, if you booked a trip or a hotel stay using points, the IRS considers your reward redemption as a travel deduction rather than taxable income. But when it comes to gifting points, you likely won’t have to pay taxes, generally speaking, unless the gift exceeds the excluded amount (the amount you must give to trigger taxes) for the tax year in which you make the donation. Unless you’ve been holding onto the points for a long time, you’re likely not going to need to worry about paying gift tax on your point transfers.

Transaction Costs to Consider

Some credit card rewards programs and travel rewards programs charge transfer fees to move your points to someone else’s account. If you’re booking travel for someone else, there might also be a small fee for booking travel with rewards. And if you’re purchasing points, you may incur a service fee in addition to inflated costs for the points themselves. Check your credit card rewards program for more details. Additionally, you might incur transaction fees when donating to a charity.

Ideas

Creative Ways to Give Gifts

Credit card points may not be the easiest gift to wrap, but you can be creative in the presentation. Here are some ideas:

• Send a themed card: If you’re gifting airline miles or hotel points, you can announce it with a postcard from one of the recipient’s favorite vacation spots. For general rewards points that are intended for non-travel purchases, you can include a note in a greeting card with ideas on how to use the points.
• Create a custom gift card: Make a handmade gift card from cardstock or colored paper and pens. Specify what the gift is and how to redeem it for the points.
• Set up a digital or personal treasure hunt: The success of this idea may depend on the occasion of the gift (and the recipient’s adventurous spirit). For example, you can create a list of fun clues hidden around the home that lead the recipient to the main gift at the end. You can use one of the other ideas here to present the final gift or just write a clever note explaining what the actual reward is.
• A small box of glitter or confetti: Each piece of glitter or colored confetti represents a reward point for the credit card. Accompany the fun box with a note or card explaining this.
• A jar of coins: We consider that one cent is the minimum redemption value for credit card points. While 10,000 cents might be a bit much to be a sock gift, a small jar of coins (with a clarifying note) will convey the idea.

Conclusion

Gifting unused credit card points to someone else can be a great way to use points that you may not have a plan for. It can be a thoughtful gift for the rewards card enthusiast on your gift list. But remember that there is a lot to consider in terms of transaction costs and logistics. Another idea might be better. For example, redeeming the points for cash and then gifting the cash may be easier and cheaper. Additionally, this could also provide the added benefit of allowing you to claim a tax deduction if you make a cash donation to a charity. Check with your financial or tax advisor to be sure.

Frequently Asked Questions (FAQs)

Can you gift credit card points to someone else? Yes. Many credit card reward programs allow you to transfer points to someone else. Pay attention to the transfer duration, whether there’s a minimum amount of points you need to transfer, and if there are any associated fees.

Can I transfer Capital One or Amex points to someone else? Capital One allows the transfer of certain points and miles to other people. For example, Venture cardholders can transfer points to other Venture cardholders. You cannot transfer American Express points to someone else, but you can use your points to make a charitable donation to one of Amex’s associated charities.

Source: https://www.thebalancemoney.com/how-to-gift-credit-card-points-5207667