How do I maximize credit card rewards?

Cash back works on credit cards by returning a percentage of the money you spend on purchases as a reward. Some cash back credit cards reward cardholders with the same percentage back on every type of purchase. Others give bonus cash back in designated spending categories. Most cash back credit cards give cardholders the choice of redeeming cash back rewards earnings for a statement credit to pay part of the account balance, a paper check, gift cards and more. In some cases, you can also redeem a credit card’s cash back rewards for a bank account deposit.… read full answer

The best cash back credit cards require good or excellent credit for approval, though there are options for people of all credit levels. Similarly, some cards charge annual fees in return for higher earning rates, but many cash rewards cards have no annual fee.

More generally, cash back is one of the three big types of credit card rewards. The others are points and miles, which you’ll see more often with travel cards. On that note, a credit card doesn’t have to be a “cash back credit card” to give cash back. Plenty of rewards credit cards, including some that offer miles and points, have cash back as a redemption option. Redeeming travel rewards for cash back often results in a lower redemption rate, however. True cash back rewards earned with a cash back credit card, on the other hand, are very versatile and don’t fluctuate in value. You can learn more below.

Here’s how cash back works on credit cards:

• Cash back with every purchase: The average cash rewards card offers about 1% back on all purchases. Some cards offer more cash back in certain spending categories.
• Chances for extra cash back: Many cash back credit cards offer initial rewards bonuses for spending a certain amount within the first few months your account is open. Some cards also have bonuses for referring a friend or meeting an annual spending threshold.
• Redeeming your cash: Cash rewards can usually be redeemed for a statement credit, check or direct deposit. You may also be able to redeem for a bank account deposit and set up automatic redemption.
• Restrictions: Some credit card companies make you earn a minimum amount of cash back before you can redeem.
• Cash back expiration: Sometimes, credit card cash back will expire a certain number of months after you earn it or after your card has been inactive for a certain period of time. Usually, it won’t expire as long as your card stays open.
• Rewards devaluation: Unlike points and miles, whose value is set by the card issuer, cash back can’t be devalued.
• Fees. Most cash back credit cards have no annual fee. Many have no foreign transaction fee. Some charge both types of fees, however.

Ultimately, you can check our editors’ latest picks for the best cash back cards on the market to weigh your options.

The best way to use credit card points has been travel since 2014, according to WalletHub research. But that’s not a rule across the board. The best way to use credit card points will vary depending on what credit card you have. Your points could be worth just as much (or even more) in cash back or gift cards, so it’s a good idea to check the value of all the redemption methods before you redeem your points.… read full answer

The best way to find out what your points are worth is to log into your credit card account online, look for a rewards redemption section, and see how many points are needed for merchandise, cash back, gift cards, and travel. Then, find out how much you’d pay for those things outside of the redemption portal and do a points-to-dollars comparison. For example, if 100 points gets you 75 cents of a gift card, or $1 in plane tickets, you should go with the plane ticket.

Exactly how you redeem credit card reward points varies by credit card company, but most credit card users can redeem reward points online through their account summary page. Some credit card issuers also let you redeem rewards over the phone. Credit card reward points may be redeemable for cash back, travel purchases, gift cards, and more, depending on the card.… read full answer

Once you redeem your credit card reward points, they’ll be subtracted from your rewards balance immediately and your account will be credited within 1-3 weeks, if applicable. In some cases, reward points will expire if you do not use them by a certain time.

Here's how to redeem credit card reward points:

1. Log in to your online account and head to “Account Summary.” Specifics will vary by issuer, but your rewards will usually be featured on a main account page.
2. Click on “Rewards Balance.” The exact wording may differ depending on the issuer. Once you click on your rewards balance, you’ll be taken to a page with your total amount of unredeemed rewards, and information about your redemption options.
3. Select how you’d like to redeem your rewards. You may be able to redeem reward points for travel purchases, cash back in the form of a check or statement credit, merchandise, or gift cards, depending on the rewards card.
4. Redeem your rewards. Once you redeem your credit card reward points, the points will be deducted from your rewards balance immediately. If you’re redeeming for statement credits or covering past purchases, your account will usually be credited within a week. If you redeem your points for gift cards or merchandise, you can expect them to arrive in the mail within 2-3 weeks.

While many rewards cards will let you choose from multiple redemption options, you’ll usually get the most value with one in particular. For example, travel rewards credit cards will often give you the most when you redeem your points for travel purchases, and your rewards may be worth less if you redeem them for cash back or gift cards.

On average, credit card reward points are worth 1 cent each. Most major credit card issuers, like Chase, Capital One and American Express, advertise that your points will not expire as long as your account remains open. But you should check the exact terms and conditions of your specific credit card to make sure you don’t lose any rewards you’ve earned.