When to Redeem and When to Save Your Credit Card Cashback Rewards and Points?

A good chunk of the population of credit card holders sign up for their respective credit card programs because of the rewards. Products like point-driven and cashback credit cards offer users the best opportunities to earn rewards points or gain a percentage of their purchases back in cash whenever they shop, dine, or even pay for day-to-day expenses like groceries, gas, or online subscriptions. Because cashback rates and rewards points accruals often vary depending on factors like the spending category, it’s always in a cardholder’s best interest to know where they’ll spend the most and in which area they’ll rack up the most rewards. 

[image: pexels]

But if you own such a card yourself, in which situations should you redeem your rewards, and in which situations should you save them and let them accumulate? It would be good to learn about these things if they affect your budgeting plans and your chances of making good on great returns—which are perhaps among the reasons you invested in such a card in the first place. 

Finding the right balance is key if you’re looking to get the most out of your cashback or rewards points. To that end, here are some suggestions for when to redeem your rewards versus when to stack them: 

The Best Times to Redeem Your Cashback Rewards or Points

During the Holidays

The holiday season is an optimal time to redeem your rewards and points, as many consumers tend to spend significantly more during this time. Whether it’s on gifts, travel, or festive meals, redeeming your cashback or rewards points can make your holiday budget stretch further and, as a result, help you enjoy the season without overspending. 

For instance, if you have accumulated rewards, you can use them to offset the costs of holiday shopping or travel expenses, such as flights or hotel bookings. This can provide a welcome financial cushion and allow you to bask in the holiday spirit without the worry of incurring additional debt. 

To make your cashback credit card experience even more fulfilling, you can use it to pay for your expenses during the holidays to earn more cash back. If you use a Landers Cashback Everywhere Credit Card by Maya to cover the cost of your groceries, dining, and holiday gifts, you’ll benefit from increased cashback rewards due to frequent usage. This credit card offers up to 5% cashback when shopping at Landers, up to 2% cashback on all dining spends, and 1% cashback on other eligible transactions. Take full advantage of these rewards categories during your holiday shopping so that you can accumulate a substantial amount of cash back—which, in turn, can be used for future expenses or saved for a special treat.

Before You Close or Switch Credit Cards

Another good opportunity to redeem your cashback rewards or points is before you close or switch credit cards. If you’re considering moving to a different card program due to better rewards, lower interest rates, or improved terms, you’ll want to redeem any outstanding rewards first. 

Most credit card companies have policies that forfeit any accumulated rewards once the account is closed, meaning you could lose out on significant value if you don't act beforehand. Knowing that, make sure to redeem your rewards before making a switch so that you capture the full benefits of your previous rewards program.

When It’s Better to Save Your Rewards or Points

When You Don’t Need Immediate Cash

One of the best times to consider saving your cashback rewards and points is when you don’t have an immediate need for cash. If you’re not facing any urgent expenses or financial obligations, holding onto your rewards can give you the opportunity to build up a more substantial balance that can be redeemed for a significant purchase or experience later on. This strategy may be particularly effective when you consider larger ticket items like vacations or major electronics that might require more cash than you have on hand. 

When You Want to Get the Maximum Value

Another scenario where it’s beneficial to save your rewards or points is when you want to get the maximum value out of them. Many credit card issuers have partnerships with airlines, hotels, or retail brands that can enhance the worth of your rewards, and each one may offer different redemption options that vary in value. 

For instance, using your points for cash back might yield less value compared to redeeming them for travel-related expenses. As such, it would be better to redeem points for airline tickets and hotel bookings to get a much higher value compared to cashing them in for statement credits. This approach can do a lot to make what may seem like a small balance into a more significant benefit.

If You Have Multiple Cards with Varying Redemption Options

Lastly, if you have multiple credit cards with different rewards structures, it may be better to save your rewards and points rather than redeem them immediately. Each card may offer different categories for earning and redeeming rewards, which means that strategizing your redemptions will optimize the value of your overall rewards portfolio. 

Say you have a card that offers higher cashback rates on groceries while another provides superior travel rewards. It could be more advantageous to save the rewards from your grocery card for a larger redemption later. Instead of cashing in your grocery rewards immediately, consider accumulating them to help offset travel expenses when you book a trip. This way, you can use the cash back from grocery purchases to reduce the overall cost of your travel expenses. Plus, when you combine this with the points from your travel card, you might be able to stretch your travel budget even further.

Ultimately, it may make a world of difference for you to know when to redeem and when to save these rewards. Use these tips to make sure that your rewards work harder for you.