Is it worth using reward points to pay off credit card debt?

If you blew your budget during the holidays and have vowed to get back on track in the new year, you may be able to use those rewards to trim down your debt. Credit card rewards can be turned into statement credit if you’re paying interest on your balance.

How can I use reward points to pay off credit card debt?

Most reward credit cards allow you to redeem points for cash back to your account. How this is done depends on your card, but generally involves the following steps:

1. Log on to your credit card account, or your reward account if they’re separate.
2. Search for Cash back or browse the rewards categories. The account credit option is usually included in categories for Gift cards and cash, Use points for charges or Other rewards.
3. Select the amount of cash you’d like to redeem with your rewards.
4. Follow the prompts to complete your redemption.

Once your redemption is processed, allow several business days for the cashback reward to be credited to your account.

How much cash back will I get for my reward points?

The amount of points required for a cashback reward varies by reward program. Below, we’ve outlined what’s required to redeem $100 worth of cash back through all the major credit card reward programs.

Table information is valid as of December 2018 based on provider websites.

What other factors should I consider?

Before using reward points to pay off your credit card balance, make sure you consider the following details:

• Point value. Depending on your reward program, cash back may not give you the best bang for your buck. Compare the value of cash back against other reward options.
• Airline credit cards. If you have a credit card that earns airline miles, you may not be able to redeem them directly for cash back or statement credit.
• Minimum payments. Cash back is usually applied to your minimum monthly payment. This means you’ll still need to pay at least the minimum amount listed on your statement to avoid penalties.
• Reward processing. Allow anywhere from two to 30 days for your reward to show up on your account. Continue making payments to avoid interest and potential late penalties.
• Other redemption options. Compare the value of a cashback redemption with other options like gift cards. In some cases you could get a $100 gift card for fewer points than a $100 statement credit would cost you.
• Consider your long-term expenses. Use your points for travel if you have an upcoming trip to save money on your airfare.

Compare rewards credit cards

Sort by:

Name	Product	Welcome offer	Rewards	Annual fee	Filter values
Blue Cash Preferred® Card from American Express		$300 statement credit after spending $3,000 in the first 6 months	6% on select US streaming services, 3% on transit and US gas stations, 6% at US supermarkets on up to $6,000 annually, then 1% after that and on all other purchases (redeem as statement credit)	$0 intro annual fee for the first year ($95 thereafter)		Perfect for families: Get up to 6% cashback as statement credit on everyday purchases and a welcome offer worth $300. This heavy-hitter rewards card has uncontested value. Terms apply, see rates & fees	Apply now View details	Compare	loading Fetching your data...
Blue Cash Everyday® Card from American Express		$200 statement credit after spending $1,000 in the first 3 months	2% at US gas stations and select US department stores, 3% at US supermarkets on up to $6,000 per year, then 1% after that and on all other purchases (redeem as statement credit)	$0		This everyday cashback card offers a higher than average welcome offer for no annual fee, letting you earn $200 after you spend $1,000 in the first 3 months. Terms apply, see rates & fees	Apply now View details	Compare	loading Fetching your data...
Chase Freedom Unlimited®		$200 after spending $500 in the first 3 months	5% cash back on travel purchased through Chase, 5% on Lyft, 3% on dining and drugstores and 1.5% on all other purchases	$0		This solid 1.5% cashback card gets even better with the addition of up to 5% back in categories like travel, drug stores and dining.	Apply now View details	Compare	loading Fetching your data...

loading

Prev

1 2 3 4 5 6 7 8 9 10

Next

Compare up to 4 providers

Clear selection

Compare

Bottom line

Redeeming your reward points for cash back to repay your credit card balance isn’t always the most valuable way to use your points. However, it could help make a dent in repaying smaller debts.

If you want to clear your debt without gaining interest and want to save your points for a different reward, consider a 0% balance transfer credit card could be a good idea.

Images: Shutterstock.