Many credit cards that earn cash back offer some flexibility in how those rewards are redeemed. Depending on the card, this can include receiving a statement credit or a check in the mail.
However, the redemption value of points varies considerably from card to card. This article will cover how to redeem your credit card rewards for the highest value possible.
Statement Credit
Statement credits are money credited back to your credit card account without you making a payment. This happens when you return an item purchased with your credit card or when a certain reward program gives you the option to redeem rewards for statement credits instead of a check or cash deposit. Credit card statement credits are a great way to avoid having to pay interest on the amount you receive because they reduce your revolving balance. You can find them on your monthly statement under transactions or in the category of account activity. Statement credits will show up with a minus sign in front of the dollar amount, meaning they decrease your balance.
Most credit cards offer statement credits as one of the options to redeem rewards, especially for travel or cashback credit cards. It’s more convenient than getting a check in the mail or having your rewards deposited into your bank account, but it doesn’t allow you to do much more with the money. Credit card companies usually don’t allow you to hoard statement credits over time or use them more than once. They expire in a year from the date they’re issued, which means you have to spend them before then.
Some credit cards, like the Chase Sapphire Reserve(r), offer statement credits as a welcome bonus for meeting spending thresholds, but you won’t have the option to earn them over time. They also only allow you to redeem them for up to 1.5 cents each, which is far less than NerdWallet’s estimated value of 2.8 cents per point. If you use a card with this feature, consider transferring your rewards to hotel or airline partners for a better redemption value.소액결제 현금화 티켓
Direct Deposit
Unlike paper checks, which can be misdelivered or stolen by criminals, direct deposit transfers are digital and securely delivered to the payee’s bank account. These electronic payments are typically sent via the Automated Clearing House transaction system, which acts as a trusted third party that ensures the right funds end up in the correct accounts. This method is popular among employers, and it can help employees receive their paychecks sooner since they don’t need to wait for the mail or go to the bank.
Many people first encounter direct deposit when they sign up for their employer’s payroll program. However, this service can be used to deliver other kinds of payments. For example, government agencies prefer to distribute Social Security, tax refunds and veterans’ benefits via direct deposit rather than sending checks in the mail or putting those amounts on prepaid cards.
To use direct deposit, a person must provide their bank account information to an organization that offers this service. This may be done through a paper form or by entering the information into an online portal. Then, the bank must verify that all of the details match before releasing the funds.
Once the verification is complete, an employee’s paycheck will automatically arrive in their bank account on their scheduled payday. In some cases, employers allow employees to split their direct deposit between checking and savings accounts, which can be a helpful way to build savings before spending the money.
In addition to being more convenient for the payee, direct deposit also reduces paper waste and minimizes transportation emissions. In fact, it’s one of the most sustainable ways to send payments. But it’s important to remember that not all banks will release a paycheck as early as the day before payday. This is why it’s important to speak with your employer and the bank before signing up for this service.
Check
Checks are still a popular method for paying rent, sending money to friends, and making other medium-sized payments. They often carry lower fees than credit cards, and can be a good way to control spending (though they can also take a while to clear). When you deposit a check, it typically takes several business days for the funds to appear in your account after the payee has signed the back of the check. You may want to write "For" in the bottom left corner of the check to make it easier for someone else to cash the check on your behalf, if necessary.
Gift Cards
The gift card is a common way for consumers to buy products and services from specific retail stores. These cards can be purchased and redeemed in-person or online, and are often sold by retailers and restaurants as part of their promotional strategies. Most gift cards come with a set value that can be used to purchase items or services from the retailer. However, some cards may have additional terms and conditions that must be read carefully before using them.
A gift card (also known as a gift certificate in North America and a gift voucher in the United Kingdom) is a prepaid stored-value money card issued by a store or bank to be used as an alternative to cash for purchases within a particular network of stores or related businesses. The card resembles a credit or debit card and displays a specific theme, but it does not include the recipient’s name or other personal information. Some gift cards can be reloaded, but some have a maximum value that can never be exceeded.
Some gift cards are reloadable and can be used at multiple locations, while others are closed-loop and must be used at a single store or restaurant, or by an associated company such as an airline, hotel or train service. Many gift cards are also backed by an online system to verify their balance and protect against theft or fraud.
Gift cards are easy for consumers to purchase and redeem, and can be a good tool for building brand loyalty among customers. However, it’s not always a good idea to sell gift cards because of the risks that can arise from them, including scammers who target consumers by encouraging them to purchase a gift card then use it to make unauthorized purchases.
Conversion to Cash
Ultimately, the goal is to optimize cash conversion by improving a company’s accounts receivable process and making it easier for customers to pay. Achieving this means reducing days sales outstanding (DSO) through improved internal billing efficiencies and making it easier for customers to pay by reducing the number of steps required for payment processing. AFP recommends leveraging automation for this purpose, which reduces costs and leads to lower DSO.
Similarly, by lengthening the duration of invoices – say 45 instead of 30 days – you provide yourself with more time to receive payments and give your cash conversion cycle more breathing room. The appropriate target DSO varies by industry, business model and customer behavior. DSO can also be influenced through proactive contacting of customers, for instance by highlighting overdue invoices or delivering statements online.