Pooling your credit card points can be used to your financial advantage: Here’s how
How the little known secret of credit card points pooling can really come in handy
Dubai: If the points of one credit card wasn’t enough, why not put together points of multiple cards? With ‘credit card point pooling’, you can financially benefit by combining your rewards points from one credit card with another card or even with that of another reward program.
Collecting reward points can often get increasingly complicated the more number of credit cards you carry. This is why some issuers allow you to combine your credit card points, making it possible to consolidate accounts, share points with others and gain access to additional redemption options.
“Like it is with most credit card rewards, leveraging the benefit of pooling your rewards comes with rules as each credit card issuer has different regulations when it comes to sharing rewards,” explained Rajesh Markara, an Abu Dhabi-based credit consultant.
“There may also be certain fees or expiration dates to factor in when transferring your miles, and while you can mostly transfer as many miles as you’d like, you may not be able to transfer miles to certain accounts. But if you can easily share miles for free, this is the best way to pool rewards.”
Why combine credit card points?
Transferring your points to one of the cards that allow you to do so, will not only give you a higher redemption rate on travel bookings, some cards also allow you to redeem for cash back at the same point value, while others allow you to transfer points to other people.
“As it’s often neither easy nor is it possible to spend the remaining points in your account after you’ve already redeemed it, moving the points to another card and adding them to that point balance can give you an influx of points which you can redeem again,” added Markara.
“Also, points can be combined into a common loyalty program that many banks' issued cards transfer to. However, keep in mind that generally, unless credit card points are from the same bank that issued the cards, they can't be combined.”
So when considering your next credit card, credit experts reiterate that it’s best to first see if you can build a cost-effective savings strategy around what you’ve already got as it's beneficial to have many points with one credit card issuer, rather than a handful of points with each different bank.
1. Is pooling or transferring points allowed?
2. Are there any costs associated with pooling or with the programs themselves?
3. Are you allowed to combine points with other people?
What are the risks to combining points?
“Once you consolidate your points from a second credit card, see to it that you keep the card to make sure your account remains active and do not cancel it,” explained Rupesh Naish, a Dubai-based debt advisor. “If not you’ve just lost more points than you would have had you kept them separate.
“Also, when combining credit card points, you can lose track of its expiration dates. Let’s say the points acquired through point sharing expire 90 days from the sharing date, but once shared points are combined with existing points, there's no way of knowing what's what.”
Naish further explained that in such a case, you'll have to remember exactly how many points were shared and make sure to use them within 90 days or they'll disappear, which will eventually render the process of consolidation as incredibly complex and tough to manage or budget.
“Sharing points can also be risky because if you transfer points into someone else’s account, you will no longer know how they get used. Keep the lines of communication open if you’re merging points with the purpose of a shared redemption,” he added.
Most often, choosing to ‘redeem’ will launch a separate tab from which you want to transfer your points, which will then bring you to an ‘earn’ or ‘use’ tab to see the various options for what you can do. If your card permits combining points, a ‘combine points’ or equivalent option would be visible.
Next, you'll mostly need to type in the number of points you want to move. However, as seen with a lot of card issuers, you may have to stick to multiples of 1,000 points. If not, you can move any number of points between your accounts. Review the details, then process the transfer.
Verdict: Combining credit card points – yes or no?
Combining credit points can be valuable, but a lot of that value comes from the flexibility of the points you earn. If you can transfer to various travel partners, combine points across your accounts or transfer points to a designated household member, you would benefit even further.
So while it helps to earn and redeem points on each card separately, combining points provides you with even more opportunities to save and spend more cost-efficiently. Two account balances together can help you reach award thresholds faster.
If not, as seen in some specific cards, transferring points from one account to another might open up more options to redeem points, meaning you’ll be able to save up points for larger redemptions or have access to premium redemption options only available on select cards.
In addition to your credit card points, airline miles and hotel rewards may also be able to be transferred depending on the airline or hotel. Regardless of how you choose to combine, when going ahead with such a consolidation, points pooling can be definitely help maximise your rewards programs.