Although Americans are stockpiling credit card points at a record-breaking pace, inflation is, like everything else, eating into their value.
The Wall Street Journal reports that cardholders accumulated points worth more than $34 billion in 2023, a 70% increase from 2019, according to annual reports from card issuers American Express, Capital One, and JPMorgan Chase.
While a point redeemed is typically worth about 1 cent, a penny has lost about 20% of its purchasing power since 2018, according to the Bureau of Labor Statistics.
Credit card companies are offering points at a faster rate, with more attractive welcome bonuses to keep up with inflation, according to Tiffany Funk, president and co-founder of Point.Me, which tracks credit card reward values. However, industries that most commonly accept points, such as airlines and hotels, are also keeping pace by raising prices.
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