Our pick for a cashback credit card: Chase Freedom Flex℠
Up to 5%
Cash back
- Huge signup bonus for a no-annual-fee card
- 5% back in rotating categories on up to $1,500 quarterly, then 1%
- New rewards on travel, dining and drugstores
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When should you redeem cashback rewards?
Redeem cash back often unless you earn bonuses for other redemption options.
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When you have a cashback card, it’s fun to watch your rewards pile up. But as you do, you might start wondering when you should cash out.
It’s best not to overthink it. But as a rule of thumb, err on the side of redeeming rewards early.
When is the best time to redeem cash rewards?
There’s no “best” time to redeem cash rewards, but it’s generally a good idea to redeem them regularly. This helps you avoid losing them to expiration and possible decline in value.
Here are a few factors to consider when deciding whether to redeem your rewards:
- Redemption minimum. Some providers require you to have a minimum before redeeming — often $25.
- Expiration date. If your rewards expire soon, it’s definitely worth cashing them in.
- Reward devaluations. Credit card providers often change reward values. Protect yourself by redeeming your cash back consistently — especially if your cash back are from earned points.
- Bonuses for certain redemptions. You might get a reward boost if you redeem your cash back for options other than cash or cash deposits. For example, if you redeem a $20 gift card through the Discover rewards center, you’ll get at least $5 added to the card.
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Will my cash rewards expire?
Whether your cash rewards expire depends on your provider. With some issuers, your cash back won’t expire as long as your account is open and in good standing. With other issuers, your rewards will expire after a certain time.
A good way to check on your provider’s policy is to read your card’s terms and conditions.
For example, the Citi® Double Cash Card‘s terms explain how your cash back might expire.
Can my cash rewards be revoked?
Your provider can revoke your cash back under certain circumstances. Typically, it will do so if your account isn’t in good standing — for example, because it’s not current on payments or it’s been used for fraud.
Here’s an example: The Chase Freedom Unlimited® credit card’s terms explain that your rewards typically won’t expire, though there are certain instances in which they might.
Will my rewards lose value?
Your rewards can lose value if your provider changes its terms. Luckily, this typically doesn’t happen because most providers peg your rewards to a percentage of your spending.
As an example, check out how Bank of America distributes rewards for the Bank of America® Cash Rewards credit card:
Be more vigilant when your provider distributes cash back in the form of points. The value of your points depends on what you redeem them for, and your provider could change redemption costs at will.
What can I redeem cash back for?
Depending on your provider, you may have a few options to redeem your cash back. Here are a few possibilities:
- Statement credit.
- Electronic deposit into a checking or savings account.
- Check.
- Gift cards.
- Travel — hotel stays, flights, car rentals, etc.
Bottom line
Unless you get bonuses for redeeming a certain amount of cash back, it’s usually wise to redeem rewards as often as you can. This will help you avoid losing cash back to expiration and devaluations.
Check out our guide to find out more about cashback credit cards.
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