How to know when to redeem credit card rewards

Quick insights

• The best time to redeem your cash back rewards is when it makes the most financial sense for you.
• You may have several ways to redeem your credit card rewards, with travel and cash back being two common options.
• Most credit card rewards don’t expire so long as your card remains open and in good standing.

People love options, so if you’re looking to redeem credit card rewards, you’re probably in luck. Most cards today offer several ways you can redeem rewards including everything from cash back to discounted travel and entertainment. In this article, we’ll discuss common rewards programs and what you may want to consider if you’re trying to determine when to redeem your rewards.

Understanding the different types of credit card rewards

Credit cards may offer one or many ways you can redeem rewards depending on the card issuer. Understanding what your rewards options are is the first step to determining how to get the most out of them.

Common ways your rewards can be redeemed include:

• Cash back
• Travel
• Store points
• Gift cards
• Merchandise

You may be able to choose any one of these ways to redeem your points, but which option is best will depend on your financial goals and upcoming expenses.

Deciding when to redeem rewards

The best time to redeem your rewards is when it makes the most financial sense for you. When you’re trying to decide the right time, you may want to consider the following:

• Check for expiration dates: Make sure to check if your rewards have an expiration date and plan your redemptions accordingly to avoid losing them.
• Consider your financial goals: Align your redemption with your financial goals. For example, if you're saving for a vacation, it might make sense to redeem your rewards for travel or apply them as a statement credit towards travel purchases.
• Be aware of minimum redemption amounts: Some credit cards require you to accumulate a minimum amount of rewards before you can redeem them for certain rewards.
• Look for redemption bonuses or discounts: Some credit cards offer bonuses or discounts on certain types of redemptions. For example, you might get extra value when transferring points to a travel partner or redeeming them during a promotional period.

Do rewards expire?

With many cards, your rewards will not expire if your card remains open and in good standing. However, some cards may require that you use the card at least once every 12–24 months to keep it active. Check your card’s terms and conditions to confirm if your rewards have an expiration date.

Calculating rewards rates

Not all rewards are created equal. Different rewards can be redeemed for different amounts. You may want to do some calculations to determine where your rewards points will go the farthest—be it through travel, cash back or some other means that will give you the most value.

Two of the most common ways to redeem rewards are cash back and travel.

Redeeming cash back rewards

Cash back rewards can typically be redeemed in a few ways. One common method is to apply the cash back as a statement credit, which reduces your credit card balance. Alternatively, you may be able to request a check or deposit the cash back amount you choose directly into your bank account. Some credit card issuers also allow you to redeem your cash back rewards for gift cards or purchases at specific retailers.

Redeeming travel rewards

Travel rewards are typically redeemed toward travel costs, including flights, hotels, car rentals and more. Travel rewards can generally be redeemed either directly through the card issuer or a travel company that has partnered with the card issuer. For example, within Chase Travel^®, you can transfer Chase Ultimate Rewards^® points to major hotel chains and airlines at a one-to-one rate, meaning your points likely won’t lose any value when they transfer.

Saving rewards

If you’re looking to turn your rewards into something substantial, you may want to hold onto them. Here are some reasons why you might want to consider saving your rewards:

• Bigger redemptions: By saving your rewards, you can accumulate a larger amount that can be used for more significant redemptions, such as long-haul flights, luxury hotels or high-end merchandise.
• Flexibility: Having a stash of rewards gives you more flexibility when planning travel or making purchases. You can use your rewards when you need them most, such as for a last-minute flight or an unexpected expense.
• Maximizing value: Sometimes, you can get more value from your rewards by saving them up for specific kinds of redemptions. Some travel rewards programs offer better value for longer flights or luxury hotel stays, but require more points or miles.

However, you may not want to stockpile them for too long. Generally, the longer you have rewards, the more value they may lose thanks largely in part to inflation. If you have an expense that can be covered by points, you may find it more valuable to use them at that time instead of saving them for an unplanned bigger redemption in the future.

In summary

Only you will know the best time to redeem your rewards because the best time is when it makes the most financial sense for you. When you do decide to redeem your rewards, you may have several ways to redeem them, with travel and cash back being two common options. You may also be able to redeem them for store credits, gift cards or merchandise. Typically credit card rewards do not often expire as long as your card remains open and in good standing, but check your card’s terms and conditions to confirm.