August 11, 2022

Best credit card points to redeem for gift cards 2022

While it’s easy to assume credit card rewards are only lucrative if you like to…

Best credit card points to redeem for gift cards 2022

While it’s easy to assume credit card rewards are only lucrative if you like to travel, that’s not true. In reality, a number of rewards credit cards actually work better when you’re redeeming points for cashback or gift cards. And some even provide more value when you redeem your points for high-dollar gift cards instead of cashback.

If you enjoy earning free stuff but don’t want to go on a getaway, earning points for gift cards or a statement credit might be your best bet. With a gift card in your wallet, you might actually treat yourself instead of paying household bills or groceries. And if you don’t want to go the gift card route, having a statement credit on your card might make it easier to do something special for yourself.

But, which card should you choose? The following rewards credit cards offer some of the best options when it comes to redeeming your points for gift cards and/or statement credits:

Intro BonusIntro Offer: Unlimited Cashback Match – only from Discover. Discover will automatically match all the cash back you’ve earned at the end of your first year. There’s no minimum spending or maximum rewards. You could turn $150 cash back into $300.

APR11.99% – 22.99% Variable

Recommended Credit Excellent/Good

Reward Rates

  • Earn 5% cash back on everyday purchases at different places each quarter like Amazon.com, grocery stores, restaurants, gas stations and when you pay using PayPal, up to the quarterly maximum when you activate.
  • Earn 1% unlimited cash back on all other purchases – automatically.

Annual Fee$0

Intro Purchase APR0% for 15 months

The Discover it Cash Back card offers the perfect opportunity for people who mostly want to earn cashback for statement credits and gift cards. With this card, you’ll earn 5% cashback at different places each quarter like grocery stores, restaurants, gas stations, select rideshares and online shopping, up to the quarterly maximum when you activate. Plus, 1% unlimited cash back automatically on all other purchases. 

Best of all, Discover promises to match the cashback you earn during your entire first year. If you plan to use your card often, this can be a huge boon — and of course, it can definitely help you earn more gift cards.

Not only can you redeem your cashback for a statement credit, but the Discover it Cash Back card makes it easy to turn in your cashback for gift cards as well.

Intro BonusEarn a $200 Bonus after you spend $500 on purchases in your first 3 months from account opening.

APR14.99% – 23.74% Variable

Recommended Credit Excellent, Good

Reward Rates

  • 5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. Enjoy new 5% categories each quarter!
  • 5% cash back on travel purchased through Chase Ultimate Rewards®, our premier rewards program that lets you redeem rewards for cash back, travel, gift cards and more
  • 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service
  • Unlimited 1% cash back on all other purchases.

Annual Fee$0

Intro Purchase APR0% Intro APR on Purchases for 15 months

The Chase Freedom Flex earns 5% cashback on your first $1,500 spent in categories that rotate every quarter (then 1%), 3% cashback for dining and drugstore purchases and 1% cash back for everything else.

It even offers a $200 welcome bonus after you spend just $500 on the card within the first 3 months. There’s also an intro offer of 5% cash back on gas for the first $6,000 spent during cardholder’s first year with the card.

The fact that it comes with no annual fee, plus an intro 0% APR for purchases and balances transfers for 15 months (then 14.99% to 23.74% variable), makes it a card that could fit a wide range of consumers’ needs. And if it is gift cards or statement credits you’re after, this card makes both options easy. Simply redeem your points for either at a rate of one cent per point. Gift cards can be redeemed in $25 increments.

Intro BonusEarn a $300 statement credit after you spend $3,000 in purchases on your new Card within the first 6 months.

APR14.24%-24.24% Variable

Recommended Credit Excellent/Good

Reward Rates

  • 6% Cash Back at U.S. supermarkets on up to $6,000 per year in purchases (then 1%)
  • 6% Cash Back on select U.S. streaming subscriptions
  • 3% Cash Back on transit including taxis/rideshare, parking, tolls, trains, buses and more
  • 3% Cash Back at U.S. gas stations
  • 1% Cash Back on other purchases

Annual Fee$0 introductory annual fee for the first year, then $95.

Intro Purchase APR0% on purchases for 12 months

While you can redeem your cashback for statement credits, gift cards, and merchandise with this card, the Blue Cash Preferred® Card from American Express simply cannot be ignored in this space. 

With this card, you’ll earn an astounding 6% back on your first $6,000 in grocery spending at U.S. supermarkets each year (then 1%), which will lead to $360 in rewards if you maximize this category. Earn 6% cashback on select U.S. streaming subscriptions plus 3% cashback at U.S. gas stations and on transit, including taxis/rideshare, parking, tolls, trains, buses, and 1% cashback on all other purchases.

While this card does charge a $95 annual fee (waived the first year), the welcome bonus alone more than covers it, and if you spend a lot of money at U.S. supermarkets, you’ll recoup that investment several times over.

And, if you buy a gift card for another retailer at a U.S. supermarket, you’d earn 6% cash back for the purchase. That means cardholders are able to earn that high 6% rate outside of grocery stores.

Terms apply to American Express benefits and offers. Enrollment may be required for select American Express benefits and offers. Visit americanexpress.com to learn more.

How to maximize your statement credits and cashback

Whether you’re after statement credits or gift cards, the strategy for earning as many points or cashback as you can is the same. The first thing you’ll want to do is make the most out of your card’s bonus categories — which will obviously depend on which card you sign up for. For example, if you have the Chase Freedom Flex card, you’ll want to go after your rotating 5% cash back categories with fervor when they align with your regular spending. Having the Blue Cash Preferred® Card from American Express, on the other hand, means you’ll want to use that card exclusively each time you visit U.S. supermarkets.

Here are some additional tips that can help:

Use your card for everyday expenses and bills

Since the number of rewards you earn is tied directly to how much you spend, putting as much on your card each month as you can get away with is the smartest way to beef up your point balances quickly. Aside from groceries at U.S. supermarkets and U.S. gas stations, see if you can pay other bills like your cell phone or Internet, utilities, kid’s activities, and even insurance payments with credit.

Always pay your bill in full right away

Credit cards are best used as a complement to your budget. In other words, you should only spend the money if you have the cash in the bank to back it up and pay your card off right away. That second part — paying your bill off right away — is especially crucial as you build good credit habits. It can even be smart to pay your bill off a few times each month if that helps you stay on track.

Don’t use credit as an excuse to overspend

 Using a credit card makes it easier to overspend, forget how much you have spent already, or knock your budget entirely off track. To avoid that trap, get in the habit of tracking your credit purchases as the month ticks on. If you keep a running total, you’ll be in good shape to keep yourself out of trouble as you pursue rewards.

[This article was first published on The Simple Dollar in 2020. It was updated in March 2022.]