Depending on your card and issuer, you may be able to redeem cash back as a statement credit, check or direct deposit, as well as for travel, gift cards, merchandise and more. Choose the redemption option that’s most convenient and won’t devalue your cash back.
And for good reason: Instead of having to decipher a complex redemption scheme, you can opt for a simple, straightforward reward and use it in the way that fits you best.
Here we take a look at some of the most common types of cash back redemption, along with some of the restrictions you may encounter when redeeming your rewards.
See related: What is cash back?
Ways to redeem cash back
Depending on your card and issuer, you may be able to redeem cash back as a statement credit, check or direct deposit, as well as for gift cards, merchandise and more. You may even have the option to redeem automatically once you’ve earned a certain amount of cash back.
Redeeming cash back as a statement credit
One of the most common ways to redeem cash back is as a statement credit. A statement credit is money credited to your account that reduces your card balance. For example, if you were to spend $1,000 with a card that offers 1.5% cash back on every purchase, you’d earn $15 in cash back rewards; and if you were to redeem this cash back as a statement credit, your balance would decrease by $15 to $985.
While many cards make redeeming as a statement credit painless, allowing you to decide when and how much you want to redeem, others require you to have earned a minimum amount of cash back before you can claim your rewards. The Blue Cash Preferred® Card from American Express, for example, requires you to have earned $25 in cash back before you can redeem as a statement credit, while the Chase Freedom Unlimited® card lets you redeem in any amount, anytime.
Once you’ve met your card’s redemption requirements, you can simply choose a statement credit as your preferred cash back redemption method or use a tool like the Capital One Purchase Eraser to apply your credit toward the cost of a specific purchase.
Redeeming cash back as a check or direct deposit
A slightly smaller number of credit card rewards programs let you redeem your rewards for “true” cash back in the form of a check or direct deposit to your bank account. Claiming your cash back in this way gives you a bit more leeway, since you can save or spend your rewards however you like instead of having them “locked” into a particular card account.
As with statement credits, the requirements for requesting a check vary from card to card, with some issuers requiring you to have earned a minimum amount of cash back before you can request a check and others imposing relatively few restrictions.
Direct deposits tend to be a bit trickier across the board, especially if you don’t already have a banking relationship with your credit card issuer. The Bank of America® Cash Rewards credit card, for example, will only let you redeem cash back as direct deposit if you have a checking or savings account with Bank of America.
Meanwhile, the Citi® Double Cash Card lets you redeem your cash back as a direct deposit only if you have a linked Citi account or a checking account from which you’ve paid a Citi credit card bill at least twice. While the Double Cash card requires you to have earned at least $25 in cash back to redeem as a statement credit, there’s no minimum to redeem as a direct deposit.
Automatic cash back redemption
Along with manually requesting a statement credit, check or direct deposit, a number of cards allow you to set up automatic cash back redemption. If your card allows automatic redemption, your cash back is generally distributed at set times or after you’ve earned a certain amount.
The Capital One® Quicksilver® Cash Rewards Credit Card and Capital One® Savor® Cash Rewards Credit Card, for example, allow you to schedule automatic cash back redemption via statement credit or check at a set time once per year or once you’ve reached a cash back earnings threshold ($25, $50, $100, $200, $500 or $1,500).
Even some cards designed for credit-builders, like the Credit One Bank American Express® Card, allow automatic redemption as a statement credit, offering those looking to improve their financial habits a “set-it-and-forget-it” cash back savings tool that will periodically knock off a chunk of their credit card balance.
Travel, gift cards and merchandise on an issuer’s online portal
Most credit card issuers also give you the option of redeeming your cash back through a rewards portal for online shopping or as gift cards to select department stores, restaurants, video streaming services and more.
The Discover it® Cash Back card, for example, lets you redeem your cash back for gift cards or instant eCertificates from shopping partners once you’ve earned $5 in cash back. The Amazon Prime Rewards Visa Signature card lets you redeem your points for purchases on Amazon.com, as a statement credit or deposit, or for gift cards and travel – all at a rate of 1 cent per point.
Having the option to use your rewards for travel allows you to enjoy the benefits of travel rewards with a cash back card and is especially common among cash back cards that use points or allow you to choose between cash back and points.
The Chase Freedom Unlimited is a great example. You can earn unlimited cash back at a rate of at least 1.5% cash back on every purchase, which translates to 1.5 points per dollar if redeemed for travel in the Chase Ultimate Rewards portal. Similarly, the Citi Double Cash Card lets you transfer your cash back to Citi ThankYou Rewards and redeem for travel rewards, as well as gift cards, merchandise and other purchases through the Pay with Points program.
Cash back redemption options on popular rewards cards
As you can see, cash back redemption options vary considerably from issuer to issuer and card to card. Here’s a closer look at how cash back redemption breaks down with some of the most popular cash back credit cards.
|Card||Redeem as a statement credit?||Redeem as a check?||Redeem as a direct deposit?|
|Blue Cash Preferred® Card from American Express||Yes (once you’ve earned $25 in cash back)||No||No|
|Bank of America® Cash Rewards credit card||Yes (once you’ve earned $25 in cash back)||Yes (once you’ve earned $25 in cash back)||Yes (into a Bank of America checking or savings account, once you’ve earned $25 in cash back)|
|Capital One® Quicksilver® Cash Rewards Credit Card||Yes, anytime||Yes, anytime||No|
|Chase Freedom Unlimited®||Yes, anytime||Yes, anytime||Yes|
|Citi® Double Cash Card||Yes (once you’ve earned $25 in cash back)||Yes (once you’ve earned $25 in cash back)||Yes (to a linked Citi savings or checking account or to a checking account from which you’ve paid your Citi credit card bill at least twice)|
|Discover it® Cash Back||Yes, anytime||No||Yes|
Best cash back redemption options
With all those options for redeeming for cash, which one is best?
The key point to consider is whether your rewards lose any value when redeemed in a certain way. 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.
That said, unless your issuer offers a bonus for claiming your rewards as a statement credit instead of “true” cash back, you should simply stick to whichever option 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 rewarding yourself by spending that amount on something you want, so that you feel like you’re getting a reward.
Either way, that’s the best aspect of cash back rewards: It’s your decision.