Redeeming rewards as a statement credit: Many cards allow it
Ask a question.
Dear Cashing In,
Can I apply my rewards toward the balance on my credit card? – Sharon
Over the past few years, one of the major trends in credit card rewards is the increased flexibility in how you receive rewards.
If you participate in one of the major bank reward programs, there are today probably hundreds of ways for you to redeem your points. You can book plane tickets, rental cars and hotel stays with them. You can transfer points to airlines. You can book hard-to-come-by experiences, such as a chalet at the U.S. Open golf championship or time on-field before a Major League Baseball game.
You can buy gift cards. You can donate to charity. And with the online shopping portals, the list of items you can buy with points is long.
That’s why it is difficult to answer the simple-sounding question, “What is the best rewards card?” The answer is going to depend on the kinds of rewards you like to receive.
Every card and rewards program operates differently, but you might be surprised just how many reward programs allow you to redeem points for a statement credit. Even cards that do not advertise themselves as cash back cards can offer a cash back option for those who prefer that reward.
Now, there might be better values to be had for those points. For example, if you have 100,000 points, you could redeem them for a $1,000 statement credit if they were Chase Ultimate Rewards, or a $600 statement credit if they were American Express Membership Rewards. Or you could transfer them to an airline and receive a ticket worth much more than that.
But if it is statement credit you are looking for, that is often an option.
Here are some of the big reward programs and how they can be used for statement credits, as of January 2017:
- Chase Ultimate Rewards: 1 point = 1 cent. Statement credits are a redemption choice in the cash-back menu online. No automatic application and it requires a minimum of $20.
- American Express Membership Rewards: 1 point = 0.6 cents. No automatic application, requires a minimum of 1,000 points.
- Discover cards Cashback Bonus: Cash earned can be applied to statement credit or deposited into a checking or savings account. No minimum. It cannot be set up to be automatic.
- Citi Double Cash Card rewards: Cash earned can be applied to statement credit, upon request. Minimum of $25.
- Bank of America Cash Rewards: Cash earned can be applied to statement credit, upon request. Minimum of $25. Automatic redemption to another Bank of America account can be set up.
- Capital One Quicksilver: Cash earned can be applied to statement credit, upon request, or automatically. Automatic application can be set up monthly, or at a threshold set up by the customer. No minimum.
Your best bet is with cash-back rewards cards. Many of them have the option. Other cards flat-out forbid redeeming to a statement credit. Some let you apply your rewards to your balance only in a roundabout way: If you amass a certain number of points, you can convert them into a gift card, which can be used to pay your balance.
Programs affiliated with airline and hotel brands typically do not offer the possibility of cash back. In some cases, rewards programs might also offer the chance to redeem points for gift cards. If you redeem for gift cards at places where you shop regularly, that could help free up cash to use toward paying your credit card bill.
Just be aware that if you are carrying a balance every month, earning rewards should not be at the top of your to-do list. Pay your balance off before worrying about rewards. Think about transferring the balance to a 0-percent interest card.
Of course, if you do carry a balance on a reward card, using the rewards to help pay it off can make sense. That way, you can eliminate your debt and begin focusing on the rewards and how to receive the most value for your points.
Meet CreditCards.com's reader Q&A experts
Does 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.
- A credit card checkup includes reviewing annual fees – Before paying your credit card's annual fee for another year, look at whether you're getting your money's worth and consider other card options ...
- Airline cards get you free checked bags, with exceptions – Airline credit cards will likely get you free checked bags, but there are limits and exceptions ...
- Q&A: Should you use your card issuer's travel portal? – Should you use your card issuer's travel portal? If you're redeeming points, you often can score some good deals on hotels or car rentals. If you're not redeeming points, shop around ...