How to redeem credit card rewards

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Rewards programs offer prime opportunities to reap extra benefits from your credit card purchases. However, it’s important to know the ins and outs of redeeming credit card rewards so that you can get the maximum value out of the cash back, points or miles you’ve earned.

Here’s an in-depth look at how to redeem credit card rewards—points, miles and cash back.

Types of credit card rewards programs

Credit card rewards come in one of three categories, depending on the card and the rewards program: cash back, points or travel miles. The primary differences between the three are how you earn your rewards and your options for rewards redemption.

Cash back

Cash back cards reward you with a percentage of the purchases you make on the card. For example, making $100 in eligible purchases with a 1 percent card earns $1 cash back. There are a few different types of cash back cards: flat rate, bonus category and tiered rewards cards. With a flat-rate card, you’ll earn a flat-rate cash back percentage for qualifying purchases. When it comes to bonus categories and tiered rewards cards, different purchases can earn more cash back.


Points-earning cards typically fall into the category of rewards cards. With most points cards, you’ll earn 1 point for each dollar you spend, although some issuers offer a higher or lower conversion depending on how you redeem your credit card points.

Travel and miles

Travel cards can earn you airline miles, hotel stays, discounts and luxurious travel benefits and perks. Some travel cards are co-branded with a certain airline or hotel chain, so if you’re loyal to a certain brand, those cards can maximize your potential earnings.

How to redeem cash back rewards

Once you’ve made your purchases and have enough cash back saved up, it’s quite easy to redeem your rewards. On the card issuer’s website, there will typically be a redemption portal where you can see what you’ve earned and choose how you want to redeem it.

Many card issuers will allow you to redeem your cash back with a statement credit, a direct deposit to your bank account or a check payable to you. However, some issuers also offer redemption options like gift cards, tickets to concerts and sporting events or even charitable donations.

How to redeem points-based rewards

When you’re ready to start redeeming credit card rewards with a points card, you’ll log onto your card issuer’s website, go to the redemption portal and choose how you want to redeem them. Depending on the issuer, you could have a variety of ways to use your points.

Your options could include anything from cash back, gift cards and travel benefits to online shopping redemptions. Every issuer’s categories are different, so make sure you do the research and go with a card that offers redemptions that suit your spending habits and lifestyle.

How to redeem travel and miles rewards

With travel rewards, your redemption options depend on the type of card you have. You typically redeem air miles for airline tickets and travel points for hotel stays, or you might have the option to apply some of your rewards toward certain travel perks. If you’re a loyal and frequent customer with a particular hotel chain or airline, you can probably get a lot of rewards value from a card that partners with your brand of choice.

Some credit cards add the option to transfer points or miles to airlines, hotels and other travel partners affiliated with your issuer. Whether you gain, lose or break even on value depends on the program, but ideally, the ratio would be 1:1 or greater. It’s important that you really dig into the program details when you transfer rewards to travel partners so you can get the most value possible.

Here are Bankrate’s guides to transfer travel partners for:

How to maximize your credit card rewards

Redeeming credit card rewards can be a frustrating experience if you haven’t put in the planning and effort to earn maximum rewards along the way. Maximizing your credit card rewards helps you get the most value out of your cash back, points or miles—and it’s easier than you might think.

Here are a few ways to maximize your credit card rewards:

  • Analyze your spending habits. What are you spending most of your money on? If it’s gas and groceries, a flat-rate card that earns a competitive rate at gas stations and grocery stores may be your best bet. If you’re a frequent traveler loyal to a particular airline, consider a co-branded airline card.
  • Keep up with your payments. Paying your monthly bill in full every time is a surefire way to maximize your earning potential. Late and missed payments open the door to paying interest, which will cut into your earnings.
  • Qualify for the sign-up bonus or welcome offer. Many rewards cards offer generous sign-up bonuses that help you rack up rewards. To qualify, you’ll have to charge a certain amount of expenses within a specific amount of time. Before applying for a card, compare sign-up bonuses to make sure you can afford to meet that minimum qualifying amount and that you’re getting a good deal.

Options to avoid when you redeem credit card rewards

Every list of do’s should have a corresponding list of don’ts, and advice on redeeming credit card rewards is no exception. Some options could lead to getting less value out of your points, miles or cash back rewards.

With travel rewards, any redemption outside of the realm of travel purchases is typically a less valuable option. The points and cash back conversions generally don’t measure up to what you’d receive in miles.

Many rewards programs offer a 1:1 value ratio when you redeem rewards for gift cards or merchandise, but not in every case. The best time to redeem for gift cards is when the issuer offers a promotional discount.

Before using any of the less than straightforward options for redeeming rewards, check the terms and conditions and disclosures to make sure you won’t be sacrificing value.

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Written by
Hanneh Bareham
Student loans reporter
Hanneh Bareham specializes in everything related to student loans and helping you finance your next educational endeavor. She aims to help others reach their collegiate and financial goals through making student loans easier to understand.
Edited by
Managing Editor