Choosing how to redeem your points, miles, or cash back can be one of the most exciting aspects of a rewards credit card. But it’s also important to consider when the best time is to redeem — especially if your card is subject to minimum redemptions.
Minimum redemption requirements often appear in the fine print of your card agreement and can be easy to overlook, though they can have a big effect on the value of your credit card rewards. Depending on the card, you may have to spend a certain amount of money — sometimes even hundreds of dollars — before you can redeem the cash back, points, or miles you earn.
If you only use your card occasionally and it takes you a long time to meet the minimum redemption threshold, you could lose out on maximizing the rewards value.
“We’re not talking about huge dollar amounts here, so it’s not life-changing, but it’s still nice to not have a minimum spending requirement,” says Ted Rossman, senior industry analyst at CreditCards.com. Like NextAdvisor, CreditCards.com is owned by Red Ventures. “You can get those rewards right away. It’s almost like getting paid every day versus getting paid every couple of weeks.”
Minimum redemptions aren’t necessarily deal-breakers for great rewards cards, but in some cases they can lower the overall value you gain from the card. Here’s what you need to know about minimum redemptions on credit cards and how they can play a role in how you maximize your credit card rewards.
What Are Minimum Redemption Requirements?
A minimum redemption requirement may be part of the terms of your account set by your issuer. If your card has a minimum redemption requirement, you must accumulate a certain number of points, cash back, or miles before you can redeem them. For example, some cards require you to earn at least $25 in cash back or 2,500 points before those rewards are eligible for redemption.
“The more restrictive it gets, the more of an obstacle it is,” says Rossman.
Minimum redemption amounts can vary widely across credit cards and issuers, but generally, they tend to range between $10 and $25.
You can typically find a card’s minimum redemption requirements in the fine print of your card agreement. They may be called “threshold amount” or “spend threshold.”
How Minimum Redemption Requirements Affect Reward Values
If you’re a frequent spender and charge most purchases to your card, you may not have any issue meeting required minimums. But if you don’t charge enough to hit the minimum routinely, you may feel like you’re not benefitting from the card.
For example, say you have a cash back credit card that earns 2% back on every dollar you spend and has a $25 minimum redemption requirement. If you spend just $200 on your card each month, it would take over six months to meet the threshold required to redeem your rewards.
It’s generally best practice to redeem your rewards regularly, rather than stockpiling them — unless you’re saving for a certain high-value redemption option. When you can redeem your rewards for any amount at any time, you can take advantage of limited time offers on redemption options, and combat small devaluations of your rewards due to inflation over time.
Alternatives to Minimum Redemptions
Many cards give you the flexibility to redeem rewards as you go, without minimum redemptions. If you want to see and use your rewards immediately, try to stick with a card that doesn’t have minimum spending requirements.
For example, Discover and Capital One have no minimum redemptions for cash back or travel redemptions — though you may have to meet a minimum for certain options like gift cards. The Apple Card is another good example: it deposits your cash back daily directly into your Apple Wallet as Daily Cash, so you can instantly reap the value of your rewards.
“I’ve had a couple of Capital One cards over the years, and I’ve actually appreciated the fact that my rewards were posted every day and that there was not a minimum redemption threshold,” says Rossman. “As a user of credit cards, that was actually a nice benefit because I didn’t have to wait.”
Maximize Value with Minimum Redemptions
The best way to minimize the effect of minimum redemption requirements is by choosing the best credit card for you so you can meet the minimum in a timely manner. Here are a few things to consider:
- Choose the right rewards: If your credit card’s rewards align with your regular spending, you’ll accrue them more quickly. That means you’ll have a better chance of meeting minimum redemption requirements more often over time.
- Consider the annual fee cost: If your card has a minimum redemption requirement and an annual fee, that could affect your overall value. Typically, annual fee cards make sense only when your benefits outweigh the annual cost. But if you’re not earning enough rewards to cash in when you want, you may want to reconsider if the cost is worth it.
- Charge your everyday expenses: If you only use your credit card occasionally, increasing the frequency of your charges could help you meet minimum redemptions more quickly. Always make sure to charge only what you can afford to pay off, but paying for the items already in your budget with a credit card that rewards everyday spending can quickly increase your overall return.
Credit Cards with Minimum Redemption Requirements
|Credit Card||Minimum Redemption Amount|
|Bank of America® Travel Rewards credit card||2,500 points|
|Wells Fargo Active Cash® Card||ATM withdrawal or direct deposit: $20; cash redemption: $25|
|Citi® Double Cash Card||$25|
|Blue Cash Everyday® Card from American Express||$25|
|Blue Cash Preferred® Card from American Express||$25|
|Delta SkyMiles® Gold American Express Card||5,000 points|
|American Express® Gold Card||5,000 points|
|The Platinum Card® from American Express||5,000 points|
If you don’t charge a lot to your credit card each month, it can take months to qualify to redeem your rewards if your card has a minimum redemption requirement.
Most minimum redemption requirements shouldn’t be a main deciding factor in applying for a new card — some of our favorite cards available today have them — but they are worth considering. If you’d rather avoid minimum redemption requirements, check the card’s terms and conditions for specific redemption rules before applying.
“I do think flexibility is key,” says Rossman. “It’s not a reason to get one card over another, but I do think the more flexible they can make it, the better.”