How to Redeem Credit Card Rewards
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When you go to redeem the rewards you’ve been accruing with your rewards-earning credit card, you may be met with a slew of potentially overwhelming options. Even the most straightforward reward of them all — cash back — may require a decision: Do you want that as a direct deposit? Statement credit? Paper check?
If your card offers miles or points, it can get even more complicated. You might be able to redeem directly for flights or hotels, yes, but where? Directly with the airline or hotel, or through your credit card's travel portal? Or maybe you'll get better value by transferring them to another travel account entirely.
Heck, these days your redemption options may extend beyond mere cash back or travel: from crypto, stock or yoga to artwork and even car or house payments.
It's a lot to keep in mind. Start by deciding what your goals are, and then know how to access your rewards so you can put them to use toward those goals. The first part — setting priorities — is within your control, but the second part — accessing and using your rewards — varies widely depending on the card, the bank behind it and the redemption option you're eyeing.
In general, here’s how to redeem rewards earned from a credit card.
How to redeem rewards
Start by logging into your credit card account, or in the case of store cards, your store loyalty account. This would be the account you set up when you first got your credit card or joined the store loyalty program. If your card is issued by Citi, for example, visit Citi.com or the Citi app and input your username and password. If you've never accessed your account digitally before, you will need to set up these credentials before you can sign in.
Once you've signed in, you’ll be able to check the balance of available rewards and decide, based on that balance, what you can get in exchange. Some card issuers will display your rewards balance prominently on your account homepage, but with others, you might need to search the page for a "rewards" link, tab or button.
If you receive paper billing statements in the mail, you may be able to find your rewards balance there as well.
Rewards may be listed as “pending,” depending on when you log in to your account. Pending rewards typically won't be accessible yet. Similarly, some cards won’t allow you to redeem rewards until a certain date — say, until the end of your billing cycle or until you’ve accumulated a certain number of points. Once you’ve hit those milestones, you can redeem your rewards.
1. Redeeming rewards for cash back
Cash rewards can take a few forms: direct deposit, statement credit or check. Gift cards will sometimes be an option, too, as a "cash equivalent," but for more on that, see No. 4 below.
Redeeming for a statement credit is a popular option, as it reduces your credit card balance. However, a statement credit often isn’t considered a regular payment on your bill, so you’ll still have to pay at least the minimum amount due each month out of your own pocket. You may also have to wait several business days before the statement credit posts to your account.
To redeem rewards for actual cash, you'll have to link a savings or checking account to your credit card account so that you have a place to deposit that money. That will require inputting the routing and account numbers for the destination bank, and this option, too, will involve a wait time of a few days.
If you'd like to wait even longer, some issuers will even mail you a physical check. Still other credit cards — such as the Wells Fargo Active Cash® Card — let you withdraw your rewards as cold hard cash directly from an ATM, if you've met the minimum required redemption threshold.
Most cash-back credit cards advertise rewards as a percentage back per $1 spent, but some technically earn points that you can redeem for cash and other things. If you're redeeming for cash, the industry-standard value is a penny per point. Anything less than that is a poor deal.
2. Redeeming rewards for credit toward merchandise
Store credit cards often limit reward redemption to store credit, enabling you to receive discounts on purchases from that particular merchant. The actual redemption process varies widely depending on the store, and some cards' rules are more complicated than others.
For instance, rewards earned with the Banana Republic Rewards Mastercard® Credit Card may be redeemed in-store by providing the cashier the phone number associated with your membership account. With the American Eagle credit card, rewards are automatically converted to store credit, and a coupon is issued by email, text or in the AEO or Aerie app. Some store cards might even send you reward certificates by snail mail once you've hit a certain threshold.
In other cases, you might face additional limitations or hoops. The Costco Anywhere Visa® Card by Citi generally requires that you visit an actual brick-and-mortar Costco store to redeem rewards, and you can only do so once a year.
General rewards credit cards — those not affiliated with a store or brand — might also allow you to use rewards toward a purchase with a specific merchant. One prominent example: You may be able to link your card to Amazon's "Shop With Points" program and use your rewards to defray or fully cover an order. Be aware, however, that this may not be the most valuable use of your rewards.
3. Redeeming rewards for travel
Researching how to use rewards to pay for travel can lead you down a deep rabbit hole. Travel hacking is a complex world with its own lingo and currency. But at a high level, rewards earned with travel credit cards may be redeemed to pay for hotels, flights and more. Many major issuers — such as American Express, Capital One, Chase and Citi — have their own portals where you can search for and book trips using your points or miles. To access these portals, you'll have to sign in to your credit card account.
Alternately, you can simply use your travel rewards to pay yourself back or "erase" purchases made directly with an airline, hotel or car rental company.
It’s also common for major issuers to allow cardholders to transfer points to their airline and hotel partners. The transfer process converts credit card points or miles to the travel partner’s own rewards currency, which you can then redeem through that partner’s website, often for outsize value. This step will require that you link your travel loyalty account to your card account — so if you want to book a flight with, say, United Airlines, you'll need to know your United frequent flyer number.
4. Redeeming rewards for gift cards
It might be possible to redeem your rewards for gift cards, but the card issuer will determine how much flexibility you have with those redemptions. For example, U.S. Bank only allows cardholders to redeem for a Visa gift card in amounts from $25 to $500, whereas Chase offers gift cards from hundreds of merchants in amounts as small as $3.
As with cash back, aim for a redemption value of at least a penny per point.
5. Instant redemption
Some credit cards now allow you to redeem rewards instantly — or at least don’t make you wait until you hit a certain point, mile or time requirement. For example, some U.S. Bank cards allow cardholders to enroll in the Real-Time Rewards program, in which reward redemption is processed within three business days on select purchases.
Rewards are processed even faster with the Gemini Credit Card. Purchases made with that card earn rewards in the form of various cryptocurrencies, which are automatically deposited into a digital asset account.
Check the value
Credit card rewards are sort of like a foreign currency with their own exchange rate. Just as the value of one U.S. dollar is determined by your travel destination, one credit card point can be worth more or less depending on the redemption type.
Take Citi’s proprietary currency, ThankYou points. When redeemed for cash, one ThankYou point is equal to one cent, but if you enroll in the Shop With Points at Walmart program, ThankYou points are worth less: You’ll only get 0.8 cent for each ThankYou point.
It may be especially worth your while to check the value of credit card points when redeeming for travel, as redemption values can vary wildly depending on the transfer partner. Chase Ultimate Rewards® are usually worth more when transferred to World of Hyatt (2.8 cents per point) compared with Marriott (0.7 cent per point).
Read the fine print
Reward redemption rules vary from issuer to issuer and card to card, so it’s important to be familiar with your card’s policies. Some nuances you might find within the fine print:
Some rewards expire by a certain date.
Rewards may not be redeemed if a credit card account is not in good standing.
Rewards may not be earned or redeemed if you don’t make at least the minimum payment.
Reward redemption may be restricted to in-person transactions.
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