Status: checked against official sources; automated independent review
FREQUENT FLYER GLOSSARY
What is pay with points?
Pay with points is a credit card redemption method in which a cardholder applies accumulated reward points to the cost of an eligible purchase, and the issuer settles that amount back onto the card account as a statement credit instead of moving the points into an airline or hotel programme. American Express describes its version, Use Pay with Points, as charging the card for the purchase, deducting the points from the Rewards Account and applying a statement credit to reflect the points used. [5]
Facts checked: 18 October 2026
Key takeaways
- Pay with points turns reward points into a credit against a purchase, usually by charging the card in full, deducting points and then applying a statement credit. [5]
- With American Express, Use Pay with Points draws on the issuer's own Rewards Account; transferring points to a partner airline or hotel programme is a separate redemption option that requires linking a partner account first. [5] [6]
- The issuer decides which purchases qualify: BMO names eligible travel purchases, while American Express names participating brands and American Express Travel. [3] [5]
- Redemptions are generally final. Once you Use Pay with Points with American Express, the redemption cannot be reversed. [5]
How pay with points works
Pay with points is a redemption route that sits inside a card rewards programme. Instead of converting points into a ticket, a room or a gift card, the cardholder spends them against the price of something already being bought, and the value comes back as a credit on the card account. Because the credit depends on how many points are applied and on the conversion the issuer applies, the same balance can produce different results depending on which redemption route it is used for; American Express states that the value of points varies according to how you choose to use them. [5]
At American Express, the sequence is fixed: the card account is charged for the purchase, the points are deducted from the Rewards Account, and a statement credit is applied to reflect the points used. If the points do not cover the full cost, the difference stays charged to the card. American Express gives an example of a purchase where points cover part of the cost: the account shows the purchase charge and a statement credit reflecting the points used. [5] The same terms note that the credit may appear during a different billing cycle than the charge, and that the minimum amount due on each statement must still be paid by the due date even when a credit is expected. [5]
In Canada, BMO describes Pay with Points as applying BMO Rewards points directly to eligible purchases, with points picking up the tab rather than producing a ticket in a loyalty programme. [3] BMO Rewards points are collected on almost any purchase made with a BMO Rewards credit card, and the programme also offers other redemption routes such as a merchandise catalogue, gift cards and a contribution to a BMO savings or investment account. [3] BMO lists cash back cards and rewards cards as separate card categories, so Pay with Points is a rewards-programme redemption rather than a cash-back feature. [3]
Which purchases can you cover with points?
Eligibility is set by each issuer, and the categories are narrower than "any purchase". BMO's Pay with Points is described for eligible travel purchases, naming flights, hotels, car rentals, vacation packages and cruises. [3] American Express offers Pay with Points at checkout with participating brands and through American Express Travel, and it also offers the option on eligible purchases at Amazon.com, where Amazon's Shop With Points terms apply in addition to the Membership Rewards terms. [5]
One further American Express use is certain taxi fares in New York City, including tips, with a stricter condition than other uses: the points must cover the full amount of the fare plus tip. [5] Points required for future rides may vary. [5]
Because the qualifying purchase list belongs to the issuer, a purchase that is eligible under one programme's Pay with Points rules is not automatically eligible under another's; check the issuer's own terms before assuming a category is covered. [3] [5]
How is it different from transfers and travel portals?
A transfer moves points out of the card programme and into a partner loyalty programme, after which the booking is made with that airline or hotel under its rules. American Express requires the partner account to be linked first and the partner account to be in the cardholder's name or that of an Additional Card Member, and it notes that in most cases transfers must be at least 1,000 points and in multiples of 1,000. [5] [6] A transfer cannot be reversed, the partner programme's terms then govern the points, and posting typically takes 48 hours, although some programmes are slower. [5] [6] Points transferred to a U.S. airline frequent flyer programme also attract an excise tax offset fee per point, subject to a cap. [5]
Pay with points keeps the transaction on the card: the purchase is charged, the points are deducted from the issuer's rewards account and a statement credit follows. [5] American Express also allows Pay with Points through American Express Travel, so some of the same travel spending can be handled either inside the issuer's booking channel or at checkout with a participating brand. [5]
The value question differs between the two routes. With a transfer, the award price comes from the partner programme's award chart or dynamic pricing, so the outcome depends on the redemption chosen there. [5] With pay with points, the outcome depends on the conversion the issuer applies to the purchase. [5]
Exceptions and limits
- Legacy Card restriction. If the only card linked to an American Express Rewards Account is a Legacy Card, Use Pay with Points is available only for American Express Travel and not with other participating brands. [5]
- Card must be chargeable. Using Pay with Points requires a charge to the card account and is subject to the Card Member Agreement, including credit limits; if a purchase cannot be made on the card for any reason, Pay with Points cannot be used. [5]
- Refunds. If part of a purchase covered by American Express Pay with Points is refunded, the cardholder receives a statement credit for the refund amount, and can call the number on the back of the card to have points reinstated instead. [5] Amazon returns follow Amazon's policies and must be authorised by Amazon before the card is credited or points returned. [5]
- No reversal. Once American Express Pay with Points is used, the redemption cannot be reversed, and the brand's own terms and conditions apply. [5]
- Switching the option off. A cardholder who no longer wants Pay with Points offered at a participating third-party brand can ask to have the option removed by calling the number on the back of the card. [5]
- A separate cash-style option. American Express also offers Use Points for Statement Credit, a different route in which the credit generally appears within 48 hours while points are deducted immediately, a minimum of $1 in points must be redeemed, Corporate Card Members are not eligible, and the credit cannot be used to pay the Minimum Payment Due. [5]
Scope: the BMO terms described here are those published for the Canadian market. [3] The American Express terms described here are the United States Membership Rewards terms, last updated October 2026. [5]
Frequently asked questions
Is pay with points the same as cash back?
No. BMO treats cash back cards and rewards cards as separate card categories, and Pay with Points is a BMO Rewards redemption applied to eligible purchases rather than a cash-back payout. [3] With American Express, the mechanism is a card charge followed by a statement credit reflecting the points used. [5]
Do I still have to pay my card bill after using points?
With American Express, yes. The purchase is charged to the account and the credit may post in a different billing cycle, so the minimum amount due on each statement must still be paid by the due date. [5]
Can I use pay with points for any purchase?
No. American Express limits it to checkout with participating brands, American Express Travel, eligible Amazon.com purchases and certain New York City taxi fares. [5] BMO describes it for eligible travel purchases such as flights, hotels, car rentals, vacation packages and cruises. [3]
Can I undo a pay with points redemption?
With American Express, a Pay with Points redemption cannot be reversed once made, although a refund on the underlying purchase produces a statement credit for the refund amount. [5]
Do I have to transfer points to an airline to use them this way?
No. Pay with points draws on the issuer's own rewards account, whereas a transfer moves points into a linked partner loyalty programme and is governed by that programme's terms. [5] [6]
Sources
Sources checked on 18 October 2026. It covers BMO Rewards in Canada and Membership Rewards terms for the United States; other Canadian and non-US card programmes, and American Express Membership Rewards terms for other markets, are not covered here.
- BMO Rewards credit cards and Pay with Points, checked 18 October 2026
- American Express Membership Rewards Program Terms and Conditions, checked 18 October 2026
- American Express help centre: transferring Membership Rewards points, checked 18 October 2026