How Do You Redeem Credit Card Rewards and Points?

Have you got a credit card in your wallet that lets you earn rewards on your purchases? If so, you know the fun that can come with watching your rewards add up and planning how to use them.

Rewards credit cards generally let you earn rewards in the form of cash back, miles or points. Learn more about rewards cards and redemption options so you can make choices that fit your lifestyle. 

A cash back credit card works a lot like it sounds. When you use your card, you can earn a percentage of what you spend back in cash.

In general, cash back cards come in three categories—flat-rate cards, tiered-category cards and rotating-category cards. Depending on your credit card and how you use it, your rewards can vary. 

Cash back cards may give you a number of ways to redeem rewards. They might include the following:

• Redeeming your rewards for cash.
• Applying your cash back to directly cover a recent purchase, typically in the form of a statement credit.
• Applying rewards directly to your account as a statement credit, which can reduce your balance.
• Making online purchases with retailers.
• Redeeming your rewards for gift cards.

If you’ve checked out travel rewards credit cards, you may have seen different kinds—like airline, hotel and general travel rewards cards. 

You can use them like you would any other credit card—and earn rewards, usually in the form of miles or points. You generally earn rewards by using them to make everyday purchases as well as travel-related purchases, like hotel reservations and plane tickets.

Rewards may vary between travel rewards cards. Some may offer a flat rewards rate for all purchases, while others might offer a higher rate on travel-related purchases. And the value of your miles or points may differ, depending on the redemption option.

Your options for redeeming your miles or points might also be different from card to card. Some cards may let you redeem your miles or points for cash, for example. And others might allow you to transfer your miles to hotel and airline loyalty programs. 

Points credit cards are yet another way to earn rewards. How you earn or redeem your points generally depends on your card. Certain points cards can be similar to miles cards, while others can be more like cash back cards.

Some points cards are based on what’s known as a fixed-point system. That means you consistently earn the same amount of points on your purchases. Other points cards may rotate spending categories, rewarding you more for certain purchases. With that type of points card, you might want to keep track of the rotating categories so you can earn the highest rewards for your spending. 

After you accumulate points over time, you may be able to redeem them for things like travel purchases, statement credits or gift cards. 

Think you may be interested in a points credit card? Be sure you’re aware of any limits on how you can redeem your rewards. And you may want to check whether your points expire so you can plan to use them before they do.

If you’ve been making purchases with your card and watching your rewards add up, what’s next? Redeeming them, when you’re ready.

You can usually find a summary of your rewards—and options for redeeming them—on your credit card’s app or website. 

To get the most out of your rewards, you might want to think through how you redeem them. For example, depending on your card and circumstances, redeeming for travel could give you more value than choosing a gift card. 

Keep in mind that using your credit card responsibly is important for reasons that go beyond its impact on your credit reports and credit score. Always paying your balance on time, for example, can mean you might not have to pay interest, which can help you maximize your rewards. 

What else should you be aware of? There might be restrictions or minimum redemption amounts on your card. It’s a good idea to read your credit card’s terms and conditions closely to understand how you can earn and redeem your rewards.

And it might help to know that, with some credit cards , your rewards don’t expire as long as your account’s in good standing. That’s true with Capital One rewards cards—your rewards are yours for the life of the account. But if your account is closed, you’ll lose any rewards you haven’t redeemed.

Redeeming Rewards for Gift Cards

While some credit cards allow you to redeem your rewards for things like cash back and travel, some offer an additional option: redeeming for gift cards.

Keep in mind that redemption rates for this option may vary—and that it might not pay off as well as other redemption options could.

Like with any rewards option, you might want to check your credit card’s terms and conditions to understand more about rates before redeeming your rewards for gift cards.

Credit cards can come with some major perks and benefits. They might include everything from exclusive event access to travel upgrades—that’s in addition to programs that allow you to earn rewards when you shop.

Here are some key takeaways that may help when it comes to redeeming rewards:

1. In general, you’ll earn rewards in the form of cash back, miles or points. Once you’ve accumulated rewards, you can redeem them. 
2. Rewards cards may give you a number of ways to redeem your rewards—everything from cash back to gift cards to statement credits.
3. Researching your redemption options may be a good idea. That’s because some options might offer better value for your rewards. For instance, depending on your card and circumstances, redeeming rewards for cash back could give you more value than redeeming for a gift card.

Ready to redeem your rewards? That’s the fun part. If you’ve had your eye on a new phone or daydreamed about a vacation, your rewards could help make them a reality. Just keep in mind what you’ve learned about getting the most out of your rewards—and the ways to redeem them.