Woman uses tablet to check credit card rewards

How to Redeem Credit Card Rewards or Points

Last Updated: April 27, 2023
4 min read

Table of contents

Key points about: redeeming credit card rewards

  1. Depending on the credit card, your rewards may be cash back rewards, miles, or points.

  2. Cash back rewards are worth the dollar amount you earn with each purchase, but the value of points and miles can vary.

  3. Be aware of restrictions like expiring rewards and minimums on the rewards you must earn before you can start redeeming.

Credit card rewards programs offer many ways to redeem the rewards you earn, whether cash back rewards, miles, or points. But how do you decide what’s right for you? Consider these tips to help you make the most of your credit card rewards.

The best ways to redeem credit card rewards

Once you earn credit card rewards, you may wonder how you should redeem them. The truth is that the best way to redeem your rewards depends entirely on you.

Getting the most value from your rewards often means matching your redemption options to your spending preferences and lifestyle. And it’s a good idea to confirm whether your issuer requires a minimum number of rewards before you can start redeeming or whether your rewards expire.

Redeem rewards at select retailers

One way to redeem your credit card rewards is to put them towards a purchase. Some credit card issuers offer the ability to shop online with certain retailers and pay for your purchase with the rewards you’ve earned. This may be a good option if you like to shop with one of the eligible retailers.  

Redeem rewards for travel

Redeeming credit card rewards for travel expenses can help you save if you regularly travel or plan to book a vacation. With some programs, you can redeem your rewards for travel-related purchases, such as airfare and hotel stays. However, redemptions may be subject to blackout dates and other restrictions depending on the credit card issuer.

Redeem rewards as a statement credit

Another way to redeem your rewards is to apply them toward your existing credit card balance. If your rewards program offers this redemption option, statement credits can be especially useful if you’re trying to pay down your balance and save on interest.

Redeem rewards as a direct deposit into your bank account

Accessing the cash value of your rewards as a direct deposit into your bank account is a practical way to make your rewards work for you. Once in your bank account, you can use the cash for anything. This option is great if you prefer more flexibility when spending your rewards.

Use rewards to donate to charity

If you’d like to make a difference with your credit card purchases, you may consider donating the rewards you earn to charity. Some card issuers offer this possibility through charitable partnerships. By donating your rewards to one of your issuer’s select organizations, you can feel good about supporting a worthy cause.

Tips on earning and redeeming credit card rewards

  • Consider a card with multiple ways to earn rewards: If you’re only earning a single rate of rewards on your purchases, you could be missing out. Some credit cards offer a higher percentage of rewards in specific spending categories that often rotate throughout the year and a lower rewards rate on all other purchases.

Did you know?

The Discover it® Cash Back credit card lets you earn 5% cash back on everyday purchases at different places each quarter, up to the quarterly maximum when you activate.

Learn More

  • Avoid overspending: While using your credit card is the only way to accumulate rewards, you’ll still need to stay on top of your monthly payments to avoid unmanageable debt. Spending more than you can pay back each month simply to earn rewards is never a good idea.

    Remember, the more credit card interest you pay, the less valuable your rewards become.

    If you have an outstanding credit card balance, you can calculate your potential interest and payoff time with the Discover Credit Card Interest Calculator.
  • Estimate the cash value of your rewards: If your credit card offers rewards in the form of points or miles, you’ll probably want to calculate the cash value of your rewards to determine if you’re getting the best possible return with each redemption.

    To arrive at the cash value of your points or miles, divide the dollar amount of what you’re redeeming your rewards for by the number of points or miles needed for redemption. For example, if you need 20,000 points to book a $200 hotel stay, your points for that transaction are worth 1 cent each. Some cards, like those from Discover, offer cash back rewards that don’t require a point-to-cash conversion—the dollar amount you earn is the value.

With careful thought and some extra planning, you can optimize the value of your rewards by choosing the redemption options that are right for you.

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