How Often Should You Redeem Your Credit Card Rewards?

With cash back, having a regular redemption routine makes sense. You could save up and redeem them once a year for Christmas gifts or cash out each month after your rewards post to your account. With certain cards, you can even set up automatic redemptions when your rewards balance crosses a certain threshold.

If you’re looking for a strong cash back card, the Wells Fargo Active Cash® Card earns a simple 2% cash rewards on purchases and offers straightforward redemptions.

Travel rewards redemptions

If you have travel rewards, such as hotel points, airline miles or transferable credit card rewards, you should pay closer attention to how and when you redeem them. When the travel awards you want are available or if there’s a special promotion, it’s usually best to redeem them rather than wait.

For example, Emirates operates a world-class first-class cabin on certain flights. Over the years, it has become more and more difficult to redeem rewards for this experience, as the award prices have increased, partner redemptions have been cut and additional restrictions have been added. If you were planning a multi-year points collection effort to book this bucket-list flight, you may now receive less value.

It’s a good idea to expect your travel rewards to devalue at some point, so the longer you hold onto them, the greater the risk they’ll be worth less. Planning a dream vacation for your 20th anniversary in ten years isn’t a reliable approach because so much can change. Having a one- or two-year timeline for your rewards is a safer plan.

Many of the best travel redemptions require a significant chunk of points to unlock. If you want to fly business-class to Europe and the flight costs 70,000 miles, you may need to save up by foregoing smaller redemptions.

One risk is that it can take a while to accumulate the rewards you need, and award prices or booking rules could change. If you want to earn the rewards you need quickly, the best way is to open a new card with a big, limited-time welcome bonus.

For example, the Citi Strata Elite℠ Card’s 100,000-point welcome bonus (after spending $6,000 in the first three months from account opening) could help you get almost anywhere thanks to Citi’s list of transfer partners. You don’t necessarily need a plan to use the bonus right away, but it’s good to have an idea of what you could use the rewards for.

Airline and hotel rewards policies

In the case of hotel points and airline miles you earn with co-branded credit cards, the rewards you earn may have expiration policies set by the card issuer. Most hotel points expire after 18 to 24 months of inactivity, but you can usually reset the clock by redeeming points or earning more.

Many of the major U.S.-based airlines have no expiration policy for miles or points, so if you have JetBlue TrueBlue miles, Delta SkyMiles, Southwest Rapid Rewards points, United MileagePlus miles and others, you don’t have to worry about losing your rewards.

There are programs, such as American Airlines AAdvantage, where your miles expire. In this case, American Airlines miles expire after 24 months of inactivity. With programs that expire rewards, having a co-branded credit card makes it easy to keep your miles alive. Even a small purchase with your Citi® / AAdvantage® Platinum Select® World Elite Mastercard® or Citi® / AAdvantage® Executive World Elite Mastercard® resets the expiration clock.

Flexible travel rewards policies

If you have flexible travel rewards, you’ll generally lose your rewards unless you redeem them or transfer them to an eligible, open account with the issuer.

For example, eligible cardholders can share or receive up to 100,000 Citi ThankYou® Rewards each calendar year. This is a great way to avoid losing points or boost their value. If you have the Citi Double Cash® Card and your spouse has a Citi Strata Premier^® Card, for example, you may want to move your rewards to your spouse’s ThankYou Rewards account to take advantage of the Strata Premier’s elevated transfer ratios. Just be aware that any points you transfer expire in 90 days.

What happens if you close your account?

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