These 3 ways to redeem credit card rewards in the U.S. are the least cost effective

Cash back, bonus points, and mileage accrual are all credit card rewards that can save you money, but if you don't redeem them carefully, I'm afraid you'll lose money.

This article lists the worst ways to use credit card rewards and reminds people to avoid making these mistakes in order to get the most out of them.

1. partner manufacturer products

People may notice that card-issuing banks are partnering with manufacturers and brands to make it easier for consumers to use bonus points for everyday purchases on credit card rewards pages; while it feels like a good way to get new appliances or laptops for free by redeeming points with partner manufacturers, it's usually not the best choice because each point or mile is often worth less than half a penny, and it's usually worth it to redeem a point for at least a penny.

2. Credit for travel credit card bills

For cash back credit cards like Citi's Double Cash, it works well to offset credit card bills, but most travel credit cards that accrue points or miles are not as good.

With the American Express Gold Card, one point is only worth $0.006 on a credit card bill, 40% less than the Double Cash card.

However, if a consumer has a travel rewards card with a special credit system, such as Capital One's Purchase Eraser website, they can redeem miles against a portion of their travel bill for the value of one point per mile.

Only if each point or mile is worth at least $0.01 of your credit card bill will it be worthwhile to redeem it; otherwise, you might as well use it to offset your airfare.

3. Pay with points

Many card issuers work with vendors to offer a "pay with points" option at checkout, which may seem attractive, but the value of each point exchanged is usually less than a penny.

You can divide the price of the item by the number of points to determine if it is a point for a penny. For example, if you buy $20 worth of merchandise on and use 2,857 points, each point is worth only $0.007.