What Are Credit Card Reward Points & How Do They Work?


Credit card reward points are the rewards points that you earn when you make purchases on your credit card. The way you earn and redeem credit card reward points can differ depending on the credit card, the credit card issuer, and their conversion rate. But learning the ins and outs of credit card rewards doesn't have to be complicated! We're breaking down how reward points work, including what reward points are, when you get credit card points, and how you can redeem them.

What are credit card reward points?

When you spend on monthly expenses (like gas and groceries) or big expenses (like travel and luxury shopping), you'll earn a certain amount of "points" on your purchases. These are credit card reward points - a rewards system that is designed by credit card issuers to thank you for being a credit card member. If you're using a Citi credit card, it's possible that you're earning what we have aptly named ThankYou® Points, a credit card rewards program that lets you redeem the points you earn in numerous ways including: flights (or travel), shopping, and cash back. Typically, you can redeem rewards points through your credit card rewards redemption platform. Note that credit card reward points will accrue at different rates depending on the credit card that you have and where you make purchases — premium cards might accrue reward points faster for travel purposes, while other reward points cards could accrue credit card points more quickly when you use them to pay for everyday expenses, like supermarket purchases..

What are credit card points worth and what can you redeem reward points for?

How much a credit card reward point is worth depends on how it is redeemed. The best way to figure out your credit card point value is to do the math: take the dollar value of whatever you're redeeming rewards points for and divide it by the number of points needed to get it.

You can typically redeem your credit card rewards points for airfare, hotels, car rentals, gift cards, shopping, statement credits, and more. Calculating the worth of your credit card points will help you stay smart when you redeem them!

What is a credit card rewards rate?

A credit card rewards rate is the number of points you'll earn for every dollar spent. Many rewards points credit cards are designed to help you earn rewards points faster with accelerators on certain categories. Some rewards points credit cards are designed to help you accrue more credit card reward points at higher rates in certain categories like travel so you can redeem them faster. For instance, Citi Premier® lets you earn 3X points on Air Travel.

When do credit card reward points make sense?

Planning your wedding? Big, one-time expenses will help you earn credit card reward points quickly that you can use towards travel for your honeymoon. Have a long commute and need to buy gas twice a week? Your regular monthly expenses could earn you rewards points that can be redeemed for a great rewards. All of life's moments, big and small, are the perfect opportunity to earn credit card reward points. Finding the right rewards credit card for you will help you earn credit card rewards points on purchases that you're already making, so that you can redeem them for something that is valuable to you. Additionally, bonus offers from your credit card issuer will help you accrue rewards points faster, so make sure to pay attention to how to earn bonus points from your issuer after applying for a card.

Things to consider when it comes to credit card points

How you earn and redeem your credit card rewards points is up to you. There are a few key things to remember when you sign up for a rewards credit card:

  • For most cards, only purchases earn rewards points. Balance transfers, cash advances, interest fees, and other non-purchase charges typically won't earn credit card points. Each credit card is unique, so double check your terms and conditions for more information.
  • Promotional and bonus offers usually have an expiration date. Read the fine print to know when your offer to earn more credit card rewards points expires and what you need to do to earn your bonus.
  • Bonus categories are important for maximizing reward points. Some credit cards offer extra reward points when you purchase from select categories like groceries, gas or dining out. Make sure to learn about the rewards program for your credit card so you can choose the best card for your spending habits.
  • Select merchants might offer higher rewards rates or better credit card point values. Check with your credit card to see which ones are best for you.
  • There might be a cap to how many credit card rewards points you can earn in a category or redeem at a time - again, check your terms and agreements for more information.
  • Rewards points will typically appear in your rewards account if you continue to pay at least the minimum due on your credit card.
  • The credit card rewards program that's right for you is out there. Start your search with Citi credit cards.

This article is for educational purposes. It is not intended to provide legal, investment, or financial advice and is not a substitute for professional advice. It does not indicate the availability of any Citi product or service. For advice about your specific circumstances, you should consult a qualified professional.

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