Credit Cards

How to redeem cash back rewards


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With the right cash back credit card in your wallet, you can save hundreds of dollars each year on your most frequent expenses and bills. But to get value from the cash back rewards you earn, you need to redeem them too.

Compared to many travel and rewards credit cards with valuable but complex rewards programs, cash back card redemptions are simple. You can usually redeem cash rewards for a check or statement credit to your card balance, but some cards offer other options as well. And to get the best value, you’ll also want to make sure you have the best cash back card for the purchases you make the most.

Here’s how you can make your cash rewards work better for your spending and financial goals, and what to consider before opening a new cash back card:

How to redeem cash back rewards

Before requesting a cash back card, please review the card’s terms and conditions for all options for redeeming your rewards. Different cards come with unique redemption options, and some may be a better fit for your financial goals than others.

Common cash back credit card redemptions include:

  • Check in the mail
  • Direct deposit to a linked checking or savings account
  • Statement credits for your recent purchases
  • Gift cards
  • Goods
  • Travel through a travel portal

Some cash back cards refer to cash rewards as “points” even if you redeem them for cash. Generally, these reward “points” are worth a penny each. So if you have a 3% dining back card, you would earn 3 points for every dollar spent at eligible restaurants.

Some cash back credit cards also allow you to use your rewards as travel points. For example, you can convert cash back earned with Chase Freedom Flex into flexible Chase Ultimate Rewards points to redeem for travel. And if you also have Chase Sapphire Preferred or Chase Sapphire Reserve, you can combine rewards and redeem them at an upgraded rate for travel through the Chase portal or transfer your points to Chase airline and hotel partners.

When you’re ready to redeem the rewards you’ve earned, simply log in to your card account online or use the mobile app and choose your redemption method. You will also be able to choose the amount you wish to redeem. Some cards have a minimum redemption amount (often $25) that you must earn before you can redeem, which may limit how often you can redeem rewards.

  • Introductory Offer:Earn an extra 1.5% cash back
  • Annual quota:

    $0

  • ordinary APR:

    14.99% – 23.74% Variable

  • Recommended Credit:

    670-850 (Good to Excellent)

  • Apply Nowexternal link icon On Chase’s secure site
  • Introductory offer:
  • Annual quota:

    $0 introductory annual fee for the first year, then $95.

  • ordinary APR:

    13.99%-23.99% Variable

  • Recommended Credit:

    670-850 (Good to Excellent)

  • Learn moreexternal link icon On our partner’s secure site View Rates & Charges, terms apply.

How do cash back cards work?

Cash back cards work best with your most frequent spend, so you’ll get the best redemption value from a cash back card that earns rewards where you spend the most.

Rewards vary from card to card, but most offer at least 1% on everything, with additional rewards of 2-5% on certain types of purchases. Many cash-back credit cards also come with no annual fee, and some even extend 0% APR on purchases, balance transfers, or both for a limited time.

If you’re looking for cash back savings, take a look at your budget from the past few months to find out where you spend the most – look for categories like dining out, groceries, gas, monthly subscriptions and more. You’ll want to make sure your rewards rate aligns with your regular spending.

Once you have an idea of ​​your spending habits, you can choose the type of cash back credit card that will help you maximize every dollar you spend:

Flat rate cash back cards

Flat-rate cash back cards offer the easiest type of cash rewards: You’ll earn a flat reward rate (usually 1.5% or 2% back) on everything you buy, with no category restrictions. These cards are often best for people looking for an easy way to earn rewards on every purchase without having to strategize. Examples of fixed rate cash back credit cards include the Citi Double Cash Card and the Wells Fargo Active Cash Card.

Tiered Bonus Category Cash Back Cards

Some cash back credit cards offer a base rewards rate on all purchases (typically 1%) along with higher rewards on fixed bonus categories (typically ranging from 2% to 4%), such as purchases in restaurants, travel or pharmacies. If you spend a lot of money on certain categories each month and want to maximize the rewards on those purchases, this might be a good option for you. Some credit cards with tiered cash back include Chase Freedom Unlimited, the Capital One SavorOne Cash Rewards credit card, and Blue Cash Preferred from American Express.

Revolving Category Cash Back Cards

Cash back cards with rotating categories offer higher rewards (usually 5%, up to limits) in bonus categories that change every three months. Typically, you’ll need to keep track of categories and activate them on a quarterly basis. This type of cash back can be more valuable if you’re willing to strategize to earn more rewards over time as categories evolve. Cash back rewards cards with rotating categories include the Discover it Cash Back card and the Chase Freedom Flex card.

How to get a cash back card

Most rewards credit cards, including cash back credit cards, are aimed at consumers with good credit or better. This generally includes anyone with a credit score of 670 or higher, although you’ll have the best chance of approval with a score over 700.

If your credit score needs some work, you may want to spend some time improving it before applying for a competitive cash back offer. But that doesn’t mean you can’t earn cash rewards in the meantime. There are also several cash back credit card options for people with fair or bad credit.

You can qualify for Capital One’s QuicksilverOne Cash Rewards Credit, for example, with “fair” credit (a score typically between 580 and 669) and earn a flat 1.5% cash back on every purchase. An annual fee of $39 applies.

Once you build your credit over time by paying your balance in full and on time, you can choose to upgrade or apply for another cash back card option that’s even more in line with your spending.

How to choose the best cash back card for you

To find the best cash back card with the best redemption value for your spending, first decide which type of cash back card appeals to you the most. For example, would you prefer 2% cash back on all purchases or 4% rewards on select bonus categories, like dining and groceries, where you spend the most?

You should also make sure you like the redemption options on the cards you’re considering. While Chase cards, like the Chase Freedom Flex, allow you to redeem rewards for cash back, statement credits, merchandise, travel and more, some cards limit your redemptions to statement credits only.

Other factors to consider include annual fees and cardholder perks like purchase protection, extended warranties, or travel insurance. Also check to see if a card offers 0% APR on purchases, balance transfers, or both. If so, you can position yourself to save on interest as you pay off large purchases or consolidate debt from other cards.

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