Earning points on a credit card can be easy, but accumulating enough to earn big rewards is easier said than done. Luckily, a new partnership promises to help customers spend points on the stuff they really want.
Paypal (PYPL) is expanding its partnerships with Chase bank (JPM) and Citibank by allowing customers to use points to pay for purchases. Starting in 2018, Paypal customers will be allowed to use their Chase Ultimate Rewards and Citi ThankYou Rewards to pay for part or all of their purchase at checkout.
This latest announcement is just one way that the online payment system is staying competitive. In 2014, PayPal acquired Venmo, a digital payment app popular with millennials. Now, the company is trying to attract new customers by focusing on credit cards.
The investment firm Instinet reported that credit card issuers paid out $23 billion in credit card rewards in 2016. This is compared to just $10.4 billion in 2010. In other words, customers are earning more points than ever, and Paypal wants you to spend them on their platform.
For shoppers, the partnership means greater accessibility.
“Flexibility is a must-have for consumers when it comes to credit cards and converting their reward points to meaningful value,” said Kimberly Palmer, credit card expert at Nerdwallet.
Neither bank has announced how the conversion from points to dollars will actually work, but regardless of how it shakes down, it could help cardholders who haven’t accumulated enough points for a big purchases, like a plane ticket to Fiji.
For example, it’s hard to find a round trip flight on the Chase Rewards travel portal for under 25,000 points. But what if you only have 12,000 points? With this new partnership, you’d be allowed to spend those 12,000 points towards any online purchase as long as it accepts Paypal as payment.
Earlier this month, PayPal also announced a deals with Apple and Samsung, allowing customers to use Paypal as a form of payment in the App Store, iTunes and Apple and Samsung Pay.
PayPal also has partnerships with Google, Facebook, Mastercard and Visa.
Brittany is a reporter at Yahoo Finance.