Home Credit Cards Beware the Amazon Trap Designed To Drain Membership Rewards And Citi ThankYou Points Accounts

Beware the Amazon Trap Designed To Drain Membership Rewards And Citi ThankYou Points Accounts

by joeheg

Amazon.com has “enhanced” their website making it easier for you to pay for your Amazon purchases with the flexible points from your credit cards. If you’re not careful, the points you were saving for a trip to Hawaii might end up paying for that 18 foot inflatable Frosty the Snowman you’ve been wanting to buy. I mean, it’s awesome but not a great use of your Membership Rewards points.


Flexible Points

Flexible Point currencies like American Express Membership Rewards and Citi ThankYou Points are useful because of the various ways you can redeem your points. Some redemptions are great values, like when you’re able to transfer points to travel partners and make once in a lifetime trips. Other redemptions are average, such as using the points to book travel through the designated booking portal where you’re typically get 1 to 1.5 cents of value per point. These bookings are good when you need a reservation where transferring points is undesirable or unavailable, Still other redemptions are terrible, like redeeming for merchandise, magazines or even TSA Precheck memberships. You’ll often get less than 1 cent of value per point (and the merchandise is also overpriced to begin with).

A new twist on ways to redeem points is to use them to pay for items purchased through other retailers. Amazon.com is a big player in this field and allows customers to pay with Membership Rewards points, ThankYou points, Chase Ultimate Rewards and Discover Cash.

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Even more incredible is that only Chase will tell you up front the value of your points when using them on Amazon for purchases.

When using points at checkout, each point is worth $0.008, which means that 100 points equal $0.80 in redemption value.

The Sneaky Part

So it’s an awful redemption. Guess what? When you add a new credit card to your Amazon account, they automatically link your points account and prompt you to set up paying with points. Pretty sneaky, huh.


I went into my account and saw that my cards were already linked. However, I didn’t have a preference set to automatically pay with points.

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I IMMEDIATELY set the account default to OFF. I do not want to accidentally pay for an Amazon purchase with points.

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I recommend that you go to your Amazon account and check your Shop With Points settings right away. If Apply by Default is marked On, turn it Off. You’ll still be able to pay with points if you want. Sometimes it’s beneficial, like when Amazon gives you free money if you pay with a point (even one point) so you go ahead and get a pair of $300 Bose headphones for $79.

Final Thoughts

I collect flexible points for the reason in their name, the flexibility. I can transfer them to other travel programs when I need them. I can redeem them for travel in place of cash. I can even use them to buy gift cards or apply as a statement credit.

While I understand that some cardholders might like the convenience of paying for Amazon purchases with their points, making it unnecessarily easy to accidentally default all payments to use points seems like an attempt to get people to spend points they didn’t want to. The number of people I’ve read online that had this happen to them (and these are not people who don’t understand how internet works) shows the system is designed poorly and should be improved.

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This post first appeared on Your Mileage May Vary

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