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What’s in your wallet? You may be sitting on tens, if not hundreds, of thousands of these…
I’m talking about credit card “reward points.” Many credit cards offer these to encourage you to place charges on their accounts. And while you might not consider these points to be alternative currencies… you’d be mistaken. They can be used to purchase goods and services offered worldwide.
Consider the case of Chinese art collector Liu Yiqian… Legacy Portfolio Chief Analyst Greg Wilson sent me the write-up below:
Chinese multimillionaire art collector Liu Yiqian made history. He paid HK$281 million—or just over $36 million (HK$ is the symbol for Hong Kong dollars)—for an artifact known as the “holy grail” of antique Chinese porcelain.
But the story doesn’t end there. You see, Liu paid for his artwork in a most unusual way: He used his American Express Centurion Card.
The Centurion Card is American Express’ elite, invitation-only charge card. Once known as the “Black Card,” holders have to pay a sizable $2,500 annual fee. But with that fee comes generous perks. Dedicated concierge and travel agents, personal shoppers at high-end retailers, and free nights at posh hotels are all on the list. And, of course, reward points on every dollar spent.
Liu’s pricey porcelain cup took 24 swipes and 24 signatures, but it went through. It may have been the largest credit card transaction of all time. (American Express does not release information on individual transactions for privacy reasons. It’s impossible to know for sure.)
Experts estimate the transaction was worth 421 million American Express points. That’s enough for 28 million frequent flyer miles… or $180,000 worth of vouchers at Hong Kong retailer ParknShop.
Soon after the auction, Liu used the points to fly his entire family round-trip from Shanghai to New York. They stayed at the historic St. Regis hotel… courtesy of his rewards points, of course…
Liu used his AMEX card to make the purchase in Hong Kong dollars… then used his rewards points to make purchases in both the mainland Chinese currency (the yuan) and the U.S. dollar. And all without banks or currency exchange fees…
If you’re like most folks, you may be sitting on a pile of alternative currencies in your credit cards’ rewards points and not even know it. The Washington Post reports over one-third of the $48 billion in rewards points issued each year get wasted.
You can optimize your credit card rewards points by understanding how you earn them and how you redeem them.
Some companies will offer additional bonuses when you use a preferred card to buy certain items (for example, you can earn double or even triple travel miles when booking travel with certain cards).
To take advantage of the alternative currencies sitting in your wallet right now, click here to access free, expert insight by “The Points Guy.”
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