Charitable Ways to Use or Donate Your Credit Card Points

Credit card points are amazing because they earn you cash back or travel for spending money you’d spend anyway. If you’re feeling charitable, you may take things a step farther and donate that cash back or travel you’ve earned to those in need. While donating points or travel directly isn’t tax deductible, you can get around that if you play your cards right. Here are five charitable ways you can use your cash back and points.

Directly Donate Your Points

While not all cash back and points programs let you directly donate your rewards to a charity, some do. You’ll have to do some investigating to see if your loyalty or rewards programs offer this service. You can usually find this on the page where you’d redeem your points for each rewards program. However, if you can’t find anything, it doesn’t hurt to give your rewards program a call to see if they offer anything like this.

Keep in mind, if you directly donate points from your rewards account, you probably aren’t going to be able to use the donation as a tax deduction.

Your donation options will vary depending on the rewards program you’re a part of, but many focus on large or local organizations. A handful of airlines, hotels and credit cards offer points donations including the following, just to name a few:

• Delta
• Southwest
• IHG Rewards Club
• Discover

Check out this article from USA Today for more specific info.

Keep in mind, if you directly donate points from your rewards account, you probably aren’t going to be able to use the donation as a tax deduction.

Cash Out and Donate

If you’d rather get a tax deduction for your donation, it’s pretty easy to do. Simply cash out your points or miles as you normally would. Depending on the rewards program, you can do this a number of ways. If you’re using a simple cash back program, cash out your rewards, deposit them in your checking account then write a check to the charity.

If you have travel statement credits, flights or hotel points, use your rewards to reduce the cost of a trip you’d usually pay cash for, then take the cash and donate it to the charity of your choice instead.
Really, this is just a game of mental accounting that allows you to “donate” the value of your rewards in a way that would be considered tax deductible.

Use Your Points to Purchase an Item to Donate

If you want to make a charitable donation in the form of items that your local charities need, there are quite a few ways to do this. While you could redeem your points or miles to shop at Amazon or some other retailer, you may not get the best value for your points.

Really, this is just a game of mental accounting that allows you to “donate” the value of your rewards in a way that would be considered tax deductible.

Same thing goes for redeeming your points or miles for merchandise through rewards malls. Instead, consider redeeming your points in a way that maximizes the value you earn, then use the same mental accounting trick discussed above and use the money you would have spent on that redemption to purchase the items your charity needs.

If you don’t want to go through the mental accounting trick, look for the items you want to donate and figure out whether purchasing them for points, redeeming the points for cash back or redeeming your points for a gift card will get you the best value for your rewards points.

Use Your Points to Book a Flight/Hotel for Someone in Need

Another great charitable way to use your points or miles is to book a flight or hotel for someone in need. Whether you personally know someone who needs help getting home to see a sick relative or an organization like your church connects you with someone in need of travel accommodations, look to see if you can use your points to book a flight or hotel for that person. Some travel rewards programs allow this while others don’t, so make sure you read the rules before trying to book a flight or hotel room for someone else when using your points.

Use Your Points for Gift Cards and Donate to People in Need

Finally, you can often redeem your points or miles for gift cards in many cases. Only do this if the redemption value for your points is at least a penny a point when redeeming for gift cards. If so, redeem for gift cards that you know people in need could use to help their situation. For instance, I think almost anyone could get something they need to improve their life situation at Walmart. You can hand out gift cards to people at the store as a way to pay it forward or get in touch with an organization in your community that can give the gift cards to people they know need some help.

Giving back to your community by donating your cash back, points or miles is unique, but very thoughtful. It’s up to you how you want to go about donating, but I highly suggest finding the way to pass on the highest amount of value to the people or organizations you want to help regardless of whether you get the tax deduction or not.