Redeeming all the rewards you’ve been accumulating on your card can be bittersweet. On one hand, you’re getting a free flight, free hotel stay or cash. On the other, you now have to start from scratch to earn the next reward.
Yet your rewards tank will never be completely empty if you have a card that gives you a redemption bonus. Such cards give you a certain percentage of your points back, just for redeeming them. This essentially increases the value of each point you earn. For example, if you have a card that earns 2 percent back, but gives you 10 percent of your points back every time you cash in your points, you’re essentially earning 2.2 percent back. That’s not exactly a huge boost – but it’s an extra $20 a year (with no extra spending necessary) if you spend $10,000 on the card.
So which cards reward you for redeeming? Here’s a list of some of the most lucrative redemption bonuses in the industry:
BankAmericard Cash Rewards: This card gives you a 10 percent redemption bonus each time you redeem the cash back you’ve earned on the card into a Bank of America Account. The card already gives you 2 percent back on groceries and 3 percent on gas, meaning you’re earning 2.2 percent and 3.3 percent back, respectively, in these categories if you redeem into a Bank of America account. The card has no annual fee. You can read more about it here.
Barclaycard Arrival: There are two versions of this card (the Barclaycard Arrival Plus World Elite MasterCard with an $89 annual fee, and the Barclaycard Arrival World MasterCard with no annual fee). Both give you 5 percent of your miles back if you redeem for statement credits against travel expenses. That means, if you redeem 25,000 miles, you get 2,500 miles back (enough for a $25 statement credit for travel). Learn more about both versions of the card here.
Starwood Preferred Guest card: This bonus is a bit different, as you earn bonus points for transfers instead of redemptions. If you transfer 20,000 Starpoints to one of the card’s partner frequent flier programs, you get a 5,000-point (25 percent) bonus. Because you can do many of these transfers on a 1-to-1 basis (ie, 1 Starpoint gets you 1 frequent flier mile), you won’t lose any value in the transfer. Plus, those 5,000 bonus points are enough for a free night in a Category 2 Starwood property. The card has an annual fee of $95 (waived the first year). Learn more about its benefits here before applying. The Starwood Preferred Guest card is offered by American Express, a CreditCardForum advertising partner.
IHG Rewards Club Card: Each time you redeem, you get 10 percent of your points back, up to 100,000 in a calendar year. IHG points aren’t worth much (often less than 1 cent), but the annual fee on this card is low ($45, waived the first year), and the chain encompasses many budget-friendly properties. Read our review of this card here.
U.S. Bank Cash+ Card: This card is known for its customizable cash-back categories, and it has a pretty generous redemption bonus as well. If you redeem $100 or more at once, you get a $25 (25 percent) bonus. The catch? You can get it only once per lifetime of the account. The card has no annual fee.
Barclaycard CashForward: This card earns 1.5 percent back on all purchases, making it a more generalized alternative to the Arrival cards (see above). As with the Arrival cards, you get 5 percent back from every cash rewards redemption.
As you can see, redemption bonuses can give your rewards earnings a nice little boost, without requiring you to spend extra or jump through too many hoops. The best part? All the cards above have either no annual fee, or one that’s under $100, making them an option for low spenders looking to squeeze value out of low-cost cards.
Updated April 14, 2016