How to redeem your card's cash back reward
Increasingly, it's your choice of check, prepaid card or statement credit
By Tony Mecia
Dear Cashing In,
I’m considering signing up for my first-ever cash back card. How would I redeem my cash-back rewards? Do they build up and then I cash them out, or are they applied automatically on my monthly statement? – Gary
Surveys consistently show that cash back credit cards are the most popular of all reward cards. People prefer cash to other rewards such as airline tickets, hotel rooms, merchandise and other perks.
The appeal of cash back cards is obvious: You don’t have to spend time figuring out how to receive your reward points or miles. And when it comes to flexibility, you can’t beat cash.
How do you redeem the cash back rewards? Cash back cards do not literally put cash in your pocket. The most common ways to redeem the cash rewards are in the form of statement credits, checks mailed to your address or prepaid gift cards.
More than ever, you are able to customize how you receive the rewards. Typically, you are able to go online and specify in what form you would like the accumulated rewards, and you can often opt to have the rewards applied automatically every month. Otherwise, you would have to specifically request the rewards every time you want them.
There are other options emerging nowadays, too. In some cases, you can have the cash deposited directly into your checking account.
In short, depending on the card, you can probably specify how you would like to receive the cash rewards.
Here is a quick round-up of redemption options on the cash back cards from several different issuers:
Capital One Quicksilver: No annual fee. Flat 1.5 percent cash back. Redemption: Can ask for cash back anytime online or by calling. Can set threshold for redemption in which you automatically receive cash back. Can be in form of check, statement credit or gift card.
BankAmericard Cash Rewards: No annual fee. Earns 3 percent on gas, 2 percent at grocery/wholesale clubs, 1 percent on all else. Redemption: Can redeem online for a statement credit, check or deposit into Bank of America or Merrill Lynch account.
Citi Double Cash: No annual fee. Flat 2 percent cash back (1 percent when you charge plus 1 percent when you pay). Redemption: Can redeem online or by calling and asking for a check, statement credit, gift card or credit to Citi checking or savings account.
American Express Blue Cash Preferred. Annual fee: $95 ($75 before Aug. 3, 2016). Earns 6 percent at supermarkets, 3 percent at gas stations and certain department stores and 1 percent on all else. Redemption: statement credit.
Discover it. No annual fee. Earns 5 percent cash back in rotating quarterly categories, 1 percent on all else: Redemption: Choice of deposit to bank account, statement credit, donation to certain charities, credit with selected online retailers or gift cards.
Chase Freedom: No annual fee. Earns 5 percent cash back in rotating quarterly categories, 1 percent on all else. Redemption: Choice of statement credit, deposit into checking or savings account or gift cards.
You see that in most cases, you have options. Now, it’s just a matter of figuring out what card you want. And you have plenty of fine choices.
Meet CreditCards.com's reader Q&A expertsDoes a personal finance problem have you worried? Monday through Saturday, CreditCards.com's Q&A experts answer questions from readers. Ask a question, or click on any expert to see their previous answers.
Published: July 26, 2016
- Q&A: Understanding airline card boarding policies – Despite new boarding group numbers, you do have priority status ...
- Use your airline rewards for more than seats – If you are flush with airline points but nowhere you want to fly, check out what else you can get using your rewards ...
- Can you get the cheapest airline seats with reward points? – As airlines make their seat pricing evermore complex, reward points holders should know where they can score the cheapest seats with their points ...