Everything About Redeeming Credit Card Rewards

Dec 15, 2023 By Triston Martin

One of the most adaptable ways to earn rewards is through cash-back credit card offers, albeit not all cash-back offers are issued as cash. Instead of receiving a paper cheque in the mail or having money deposited into your account, many credit card companies let you redeem incentives as a statement credit. Statement credit is a straightforward way to redeem points, so you may choose it even if your credit card offers other redemption alternatives.

Using a Credit Against Your Statement A redemption is reflected in a statement credit, which essentially decreases your outstanding balance by the amount redeemed. Redeeming awards for a statement credit of $5 reduces an outstanding debt of $100 to $95, for instance.

A statement credit allows you to pay off your credit card bill with fewer funds out of your pocket, which is especially helpful if you've racked up numerous rewards. Spending on big-ticket items like a vacation or new appliances doesn't have to break the bank when you apply for a credit on your monthly account.

Your Bare-Bones Payment Might Still Be Due

Any incentives you cash in for a statement credit will be applied to your account after all other fees have been deducted but will not count against your minimum payment requirement. The only possible exception to this rule is if the statement credit is immediately applied to your balance and eliminates your credit card balance, leaving you with either a zero balance or a credit.

Calling your credit card company to verify whether or not you still owe money after a statement credit has been made is a good idea. If you miss a payment and don't make it up within 30 days, you'll be charged a late fee, which could harm your credit. If you are a loyal client who always pays on time, your credit card company could be ready to forgive the late fee if you mistakenly miss a payment.

Redeeming a Statement-Making Credit

It's possible to redeem rewards for a statement credit on most credit card companies websites. If you have any unredeemed prizes, you can see them once you log in and select the amount you want to redeem. It's also possible to redeem rewards by calling the credit card company on your card's back.

The credit on your statement can be credited to your account immediately, depending on the credit card. Otherwise, it may not appear on your credit card statement for a billing cycle or two. An additional line of credit for usage in future transactions may become available once a credit has been applied to a cardholder's account. 3

Cautionary Notes

Certain credit card companies have minimum redemption restrictions or may only allow you to redeem your rewards in specific increments. Therefore, you can't earn a statement credit until you've accumulated enough points. You should cash in your rewards before they expire if you are a heavy spender or if you frequently make purchases in the categories that offer the greatest reward amounts.

Many credit card incentives, however, do have a time limit attached to them. The benefits on your credit card may have a time limit, so it's important to know when they'll be void. You'll be able to start the redemption process far before your points expire.

Bankrate studied credit card holders in 2017, and 31% of those surveyed said they never used their rewards. If you have rewards, use them before they expire. If you cancel your card before redeeming your rewards, don't make a credit card payment on time, let your awards expire, or otherwise go against the rewards program's terms; for instance, you may lose your rewards.

If your credit card company modifies its rewards program, you may also decrease your reward status. There is a greater chance of losing your rewards if you wait too long to cash them in. If you aren't saving up for something special, it's best to cash in your points as frequently as possible.

How do you accumulate points on a credit card?

In addition to making purchases with your credit card, there are a few other ways to increase your point accumulation. I'll give you a few instances to illustrate my point. Bonus category spending should be maximized.

You will typically receive points when you make certain transactions with your credit card. Many issuers award points at varying rates for certain purchases. The Platinum Card® from American Express, for instance, gives (up to $500,000 on these purchases per calendar year) if you are a frequent flyer and spend a lot on tickets and hotel rooms.

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