How To Redeem Cash Back Rewards
-
Written by
Angela Mae
Chances are you’ve run across a few credit cards that offer cash back rewards. You might even have a cash-back credit card in your wallet right now.
But while earning cash back rewards is generally as easy as making a qualifying purchase with your card, redeeming these cash rewards isn’t always so straightforward. Not only are there different types of cash back and rewards programs, but every credit card issuer does things a little bit differently.
Before you apply for a credit card — or as you keep racking up rewards on the one you already have — it helps to know your particular credit card issuer’s cash rewards redemption policy. Here’s how cash back cards work and how to redeem cash back rewards.
How Do Cash Back Cards Work?
Many companies offer credit cards that earn cash back or other cash rewards whenever you make a qualifying purchase. Generally, these rewards are based on a percentage of how much you spend (for example, a 2% cash back card earns 2 cents per dollar spent).
Flat Rate
Some credit cards have a flat rate reward system. For example, the Bank of America® Unlimited Cash Rewards credit card offers 2% cash back for the first year on all of your purchases (after the first year, you’ll earn 1.5% back), and the Wells Fargo Active Cash® Card offers unlimited 2% cash rewards on purchases.
Set Categories
Other cards have a category-based reward system in which you’ll earn a different percentage of cash back based on the category. For example, Capital One Savor Cash Rewards Credit Card offers unlimited 3% cash back on entertainment, dining, grocery store purchases and popular streaming services. It also offers 5% cash back on hotels, vacation rentals and rental cars (when booked through Capital One Travel). All other purchases earn 1% cash back.
Rotating Categories
There are also rotating category cash back credit cards. For instance, the Discover it® Cash Back card comes with cash back on specific categories (activation required). These categories change each quarter and have a quarterly maximum.
Regardless of the type of card you have, the cash back you earn is generally stored in your account until you decide to redeem it. However, you may not see the amount earned until the card issuer has processed your purchase. Some companies will require you to pay off the purchase before adding any earned rewards to your account.
How To Redeem Cash Back Rewards
Redeeming cash back rewards depends on the card issuer and their policy. Here’s how to generally redeem cash rewards:
1. Log into your account
Access your account from a secure device to see how much cash back you’ve earned. This should be readily available on a redemption portal or on your credit card account’s main page.
2. Review the reward structure
Every credit card has its own reward structure. If you don’t already know what yours is, take some time to familiarize yourself with it now. Also, be sure to read the fine print so that you know the limitations, rules and redemption options available to you.
3. Understand the minimums and limitations
You may need to earn a minimum amount to redeem your cash rewards. Other cards, like the Capital One Quicksilver Cash Rewards Credit Card, let you redeem any amount of cash back at any time.
4. Request a cash rewards redemption
You can typically redeem cash rewards by requesting a statement credit. Many also additional redemption options like gift cards, direct deposit or a check. Some credit card companies also allow you to redeem your cash rewards for concert tickets, charitable donations, or other online purchases (such as those made through Amazon.com). Some especially low-maintenance cards will let you set up automatic cash back redemption once you’ve earned a certain amount or at specific times of the year.
Other Rewards Redemptions
Some credit cards don’t offer cash back. Instead, they’ll have other rewards like miles or points. Here are two common examples:
Travel Rewards Credit Cards
With a travel credit card, you’ll earn travel points or miles whenever you use your card to make qualifying purchases. After earning a certain amount of points, you can redeem them online for things like airline award tickets, hotel stays or other travel-specific purchases.
Rewards Points Credit Cards
Some rewards credit cards earn flexible points for every dollar you spend with your card. The exact value of these points depends on the card itself, as well as the redemption method. Once you’ve accumulated enough points, you can redeem them for cash back, travel or other rewards (based on the credit card’s policy).
When redeeming cash back rewards (or other rewards), be sure to choose the redemption option that gives you the most value and that best suits your needs. Whether you request a check, pay for online merchandise or ask for a statement credit, you’ll want the maximum benefit possible.
Takeaway
Cash back credit cards are a convenient way to earn cash rewards for making everyday purchases. You apply for a card that uses a flat rate, category-based or rotating rewards system — whichever works best for you.
As for how to redeem cash back rewards, that depends on the card issuer. Some of the most common options include requesting a statement credit, paying for online merchandise, getting a gift card, a check payable to you or asking for a direct deposit to your account.
Keep in mind that some credit card issuers have restrictions on how and when you can redeem cash rewards. You may need to earn a specific amount before you can do a cash rewards redemption. Or you may have unlimited access — it all depends on the card you’ve chosen, so review the fine print carefully.
Frequently Asked Questions About Redeeming Cash Back Rewards
How do I redeem my cash back dollars?
This depends on the card issuer and the card you’ve chosen. Common cash rewards redemption options include requesting a statement credit, gift card, check or direct deposit to your account. You may also be able to make a charitable donation or use your dollars to pay for online purchases at specific merchants.
How do I convert my reward points to cash?
Normally, you can convert your reward points to cash by going to the credit card company’s website and logging into your account. From there, you should see a redemption portal or a drop-down menu that allows you to see your total earned rewards and the redemption methods available. You can then typically request a gift card, statement credit, check or direct deposit. Or you can redeem your rewards for certain merchandise or other online purchases.
How do I put cash back into my account?
You can ask for a statement credit or direct deposit. Just know that a statement credit won’t necessarily be considered an actual payment toward your account balance (if you have one). You’ll still need to make a minimum payment before it’s due. However, you can use that credit to offset how much you owe.
