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Cashing In Q&A columns

How do you redeem cash back rewards?

Summary

Cash back is consumers’ favorite form of rewards due to its flexibility. Cash back redemption options include statement credit and checks, but they are not the only ones.

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Dear Cashing In,

How do you redeem your cash rewards? – Dennis

Dear Dennis,

There are plenty of ways to redeem credit card reward points these days. Card issuers like to offer customers lots of options. Yet surveys consistently show that no credit card reward is more popular than cold, hard cash.

In fact, CreditCards.com’s most recent survey on rewards credit cards, conducted October, found cash back cards are the most popular, well ahead of other types of rewards cards such as gas/retail, airline/hotel, travel and business.

The reason? Cash is obviously the most flexible of rewards. And instead of laboring to decipher a complex rewards program, or shopping online or transferring your points to some other program, you can opt for an easily understood and well-defined reward that can be used for anything.

See related: How cash back credit cards work

Ways to redeem cash back

The mechanism by which you receive your cash from your reward card might differ slightly, depending on the bank issuing the card.

  • Typically, you have to contact the issuer online or by phone and request a check, a direct deposit into a bank account or a statement credit.
  • In some cases, you can set up an automatic reward redemption.
  • You also might have the ability to use the cash to shop in the issuer’s online portal for gift cards or other merchandise.

Here is how cash back rewards can be redeemed on some of the most popular cash back cards currently in the market, according to their terms and conditions:

  • Blue Cash Preferred® Card from American Express: You can redeem reward dollars for statement credits whenever your total available reward dollar balance is $25 or more. Cash back can also be redeemed for gift cards starting at $25.
  • Bank of America® Cash Rewards credit card: When your cash rewards balance is $25 or more, you can redeem your cash rewards for a statement credit, a check or an electronic deposit into a Bank of America checking or savings account, or a contribution to an eligible Cash Management Account with Merrill Lynch Wealth Management or Merrill Edge. Meanwhile, Preferred Rewards cardholders with a substantial bank balance are eligible to earn an even steeper bonus – in some cases as high as 25 to 75 percent.
  • Capital One Savor Cash Rewards Credit Card and Quicksilver Cash Rewards Credit Card: You can get your cash back upon request in the form of a statement credit or a check. You can also set up an automatic redemption preference either at a set time each calendar year or when a specific threshold ($25, $50, $100 or $200) has been reached.
  • Chase Freedom and Chase Freedom Unlimited: You can use your points to redeem for any available reward options, including cash, gift cards, travel and products or services made available through the program or directly from third party merchants. Redemption values for reward options vary. Cash back rewards are tracked as points and each $1 in cash back rewards earned is equal to 100 points.
  • Citi Double Cash Card: As soon as the cash rewards balance totals $25 or more, you may redeem your cash rewards. Options include a check, a statement credit and a credit to your linked Citi savings or checking account or to a checking account from which you have paid a Citi credit card bill at least two times.
  • Discover it® Cash Back: You may redeem your cash back bonus in any amount starting with 1 cent for a credit to your account, an electronic deposit to your bank account, a donation to select charities or to pay with Cashback Bonus at Amazon.com. Starting with $20 in cash back, you may redeem for gift cards or instant e-certificates from Discover’s partners.

Best cash back redemptions

With all those options for redeeming for cash, which one is best?

You want to make sure you are getting the most value back, so be careful if you redeem for merchandise, which in some cases earns you less in rewards than straight cash.

It doesn’t really matter if you choose a statement credit or a check or bank deposit. I’d say do whatever is most convenient.

One drawback to cash rewards is they often don’t feel like actual rewards, because they get swept up into your ongoing finances.

If that bothers you, you might consider taking note of how much you are receiving in cash rewards – then going to reward yourself by spending that amount on something you want, so that you feel as though you are receiving a reward.

Either way, that’s the best aspect of cash back rewards: It’s your decision.

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Published: December 10, 2018

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Credit Card Rate Report Updated: May 23rd, 2019
Business
15.61%
Airline
17.50%
Cash Back
17.60%
Reward
17.62%
Student
17.79%

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