How to redeem cash-back rewards from your credit card
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Credit card rewards are only valuable when you redeem them. But, cash-back rewards can be extremely valuable, as they can effectively put cash right back in your pocket.
Not all rewards cards provide cash-back rewards, though. And, even among those that do offer a cash-back reward option, cash back may not be the most lucrative use of your rewards. Luckily, if you have a self-proclaimed cash-back rewards card, cash back is usually one of the most lucrative redemption options.
That said, even if you have a cash-back rewards credit card, you likely won’t get cash back deposited into your wallet or account automatically. So, today I’ll discuss how to redeem cash-back rewards from your credit card.
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How cash-back rewards work
You’re likely earning points, miles or cash back on your purchases if you have a rewards card. However, even if you are technically earning points or miles, you may be able to redeem them for cash-back. Typically, you’ll find some or all of the following cash-back options on your card:
- Statement credits applied to your account.
- Check sent to your mailing address.
- Deposit to a checking or savings account, which often must be with the same bank.
- Gift card, either electronic or sent to your mailing address.
- Payment for student loan or mortgage, which often must be with the same bank.
However, you may get a better redemption rate when choosing particular options. And, there may be minimum redemption thresholds for some options.
Related: Best 2% cash-back credit cards
How to redeem cash-back rewards
Once you’re earned rewards, you must determine how to redeem rewards on your specific card. To check your redemption options, log in to your account online or call the number on the back of your card.
Each card is different when it comes to earning and redeeming, but to give you a look at the breadth of redemption options, here’s how to redeem rewards with several popular cash-back rewards cards.
If you have the Blue Cash Preferred® Card from American Express, you’ll earn cash back in the form of Blue Cash reward dollars. You can then redeem your reward dollars for a statement credit to your account when your rewards balance is $25 or more. However, you cannot use reward dollars to pay your minimum balance due.
Alternatively, if you have the Capital One SavorOne Cash Rewards Credit Card, you can request your cash back as a statement credit or a check. And you can even set up an automatic redemption trigger based on a date or amount threshold. To redeem cash back or set up an automatic redemption trigger, log in to your account or call the number on the back of your card. You can also redeem cash back to offset previous purchases, purchase gift cards and more, but the redemption rates for these options can vary.
Finally, if you have the Ink Business Cash Credit Card, each every 100 points you earn equal one dollar in cash-back rewards. You can redeem points for any available reward options, which often include cash, gift cards, travel, products and services. However, redemption values for different reward options can vary. As a result, you’ll want to make sure you’re getting at least one cent per point of value when you redeem.
As you can tell, there are many ways to redeem cash-back rewards from your credit card. So, it’s best to log in to your account and access your redemption options. After all, cash-back rewards are typically held in your account until you redeem.
When to redeem cash-back rewards
In general, you’ll want to redeem your cash back once you earn enough cash-back rewards to redeem at the best rate. For example, some cards require you to redeem for at least $25 of cash back to access the most valuable redemption options. However, note any expiration policies to ensure you redeem your cash back before it expires.
Some cardholders prefer to redeem their cash-back rewards for one large check each year. However, if you redeem your rewards sooner and deposit your rewards in a savings account, you can earn interest on your rewards.
Finally, many higher-end travel cards also allow you to use your points or miles for cash back. However, these options typically come at a lower value. As a result, you may want to stick with travel redemptions if you have a card like the Chase Sapphire Preferred Card.
Cash-back credit cards can put money back in your pocket. But, credit cards often provide many redemption options. And some options may provide more value than others.
So, before redeeming your cash-back rewards, determine which redemption options provide the best value. In general, you’ll want to avoid redeeming your rewards for Amazon, merchandise and gift cards.
Featured photo by Orli Friedman/The Points Guy.
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WELCOME OFFER: Earn a $350 statement credit after you spend $3,000 in purchases on your new card within the first six months.
CARD HIGHLIGHTS: Earn 6% cash back on select U.S. streaming services and 3% cash back on transit. Plus earn 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%) and 3% Cash Back at U.S. gas stations. Cash back is received in the form of Reward Dollars that can be redeemed for statement credits.
- Earn a $350 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.
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- Low intro APR: 0% intro APR for 12 months on purchases from the date of account opening, then a variable rate, 15.49% to 25.49%
- 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%).
- 6% Cash Back on select U.S. streaming subscriptions.
- 3% Cash Back at U.S. gas stations and on transit (including taxis/rideshare, parking, tolls, trains, buses and more).
- 1% Cash Back on other purchases.
- Cash Back is received in the form of Reward Dollars that can be redeemed as a statement credit.
- $95 Annual Fee.
- Terms Apply.
- See Rates & Fees