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Redeeming credit card points for cash back or statement credits when you’re in a pinch can help you through a recession.

Alyssa Powell/Insider



  • I accumulated over 300,000 credit card points during the pandemic because I didn’t use them for travel.
  • Now I’m planning to redeem them to offset increased expenses and a reduction in income in the event of a recession.
  • Using credit card points for cash back, gift cards, statement credits, and merchandise will help me stay on budget.
  • Read Insider’s guide to the best rewards credit cards.

For the first time in 2022, I decided to take inventory of all my credit card rewards points. Since I spent most of 2020 and 2021 staying home because of the pandemic, I found that I accumulated a lot more credit card rewards than I thought. With close to 300,000 points in my accounts and no upcoming vacations or travel on my calendar, I wanted to see how else I could use them.

Since my personal finances this year have taken a hit, because of the dips in the stock market, the price hikes due to inflation, and the urge to be extra frugal because of a potential recession, I wondered if I could use my credit card points to help with spending and savings goals.

Here are the ways I’m planning on strategically using a big chunk of my credit card points in case a recession hits hard. 

Insider’s Featured Cash Back Credit Cards

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Earn unlimited 2% cash rewards on purchases.

$200 cash rewards bonus after spending $1,000 in purchases in the first 3 months from account opening

Earn 2% on every purchase with unlimited 1% cash back when you buy, plus an additional 1% as you pay for those purchases.

$200 cash back after spending $1,500 on purchases in the first 6 months of account opening

5% cash back on up to $1,500 in combined purchases in bonus categories each quarter you activate. 5% cash back on travel purchased through Chase Ultimate Rewards®. 3% cash back on drugstore purchases and dining at restaurants, including takeout and eligible delivery service, and unlimited 1% cash back on all other purchases.

$200 after spending $500 on purchases in the first three months from account opening

We’re focused here on the rewards and perks that come with each card. These cards won’t be worth it if you’re paying interest or late fees. When using a credit card, it’s important to pay your balance in full each month, make payments on time, and only spend what you can afford to pay.

Redeem credit card points for cash

As a full-time entrepreneur and freelancer, I am predicting that a recession will influence how much income I’m able to bring in every month, since clients and projects will change their scope. If my paycheck gets lowered, I’ll have to find additional ways to bring in cash to cover my monthly expenses.

One way I can do that is by redeeming some of my existing credit card points for cash

For example, the Chase Freedom Unlimited® earns at least 1.5% back (in the form of Chase Ultimate Rewards® points) on every purchase and you can redeem your rewards for travel, gift cards, or cash back.

I plan to use that cash to contribute to rent payments, my retirement fund, or even just to cover immediate and important weekly expenses (food, electricity, and more).

Buy gift cards 


Intro offer

80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening


Rewards

Earn 3x ThankYou® points at restaurants and supermarkets. Earn 3x ThankYou® points at gas stations, air travel, and hotels. Earn 1x ThankYou® points on all other purchases

Citi Citi Premier® Card


Intro offer

80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening


Rewards

Earn 3x ThankYou® points at restaurants and supermarkets. Earn 3x ThankYou® points at gas stations, air travel, and hotels. Earn 1x ThankYou® points on all other purchases


Rewards

Earn 3x ThankYou® points at restaurants and supermarkets. Earn 3x ThankYou® points at gas stations, air travel, and hotels. Earn 1x ThankYou® points on all other purchases


Intro offer

80,000 bonus ThankYou® Points after you spend $4,000 in purchases within the first 3 months of account opening


Recommended Credit

Good to Excellent


Regular APR

18.99% – 26.99% Variable

Editor’s Rating

4.3/5

Our editor’s ratings analyze fees, bonuses, rewards, and benefits to highlight the simplest and most valuable credit cards available.

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One perk that some credit cards offer is the ability to redeem your points for gift cards to well-known retailers and restaurants. For instance, the Citi Premier® Card lets you redeem points for gift cards at a rate of 1 cent per point, however, they occasionally have sales that offer points discounts of up to 20%.

When I need to give someone a holiday or birthday gift, this is the route I’ll use to be able to afford that. I’ll either purchase a gift card using my points to give them or I’ll use that gift card to then buy a specific item at the store that I know they want. That way, I don’t need to tap into my savings account when my budget is tighter because of the recession. 

Get statement credits 

In the past, when I had a lot of lingering credit card points and no plan of how to use them, I just redeemed them for statement credits. This helped me lower my credit card balance for the month.

Since all of my credit cards offer this as a perk, I plan to go down this route if I notice my credit card bills increasing more than usual due to the recession and I don’t have the cash flow to be able to get my balance down.

Use points to pay for merchandise

I’ve already started preparing a financial strategy for the recession and while I’ve found ways to work with a tighter spending budget, there will inevitably be items I’ll need to buy every month, even if they aren’t such a big necessity. Purchases like household cleaning items and clothing for new seasons will make my spending fluctuate.

The Capital One Spark Miles for Business
lets you redeem your miles to pay for purchases on Amazon at a rate of 0.8 cents each. If there’s a month where I’ve maxed out my planned budget, I’ll take a few thousand miles and buy the items I’ve stored in my Amazon cart that I need to get, without having to spend cash on them.



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