I plan on saving my cashback as well. Figured it's extra money that I am not reliying for my everyday expenses on so what not save it for a rainy day? Am deciding what savings account to put it in Barclay's versus Ally's, but I like the idea of free money getting interest (even if it is only .85%)
Starting Score: MyFico EQ 694 (3/2013)
I use my cash back as a statement credit as the money I saved through cash back when I PIF is extra money that goes into savings. I wait until I get $140 cash back and I use $120 as a statement credit. If I have budgeted $500 per month on a particular card, I pay $380 to PIF and put the $120 I saved due to statement credit in savings. I don't know how I used to survive without cash back rewards...LOL! 
Cards: Orchard Bank ($1100) | Cap1 Cash Rewards ($2500) | Chase Freedom ($1000) | Best Buy ($2500) | Discover It ($1000) | Barclay Rewards ($2500) | Current scores: EX FAKO: 684, CK TU: 649, FICO EQ: 680, FICO TU: 698, FICO EX: 658 Happy Homeowner Since 2/6/13! Does anyone know if credit card issuers have the right to devalue unredeemed cash back? I know they do with reward "points", and I've noticed that cash back is often in the form of points until you reedem the points for actual statement credit.
Most CC issuers have points that don't expire. Chase, Discover, Cap1 to name a few. Not sure about Barclays. But as long as they don't expire, they shouldn't be devalued. Now, this does happen if you fail to keep your account in good standing. I believe the cash back rewards is a psychological incentive for members to keep their accounts in good standing. I am sure card companies have data signatures showing the default rate dropping since rewards cards were introduced so having rewards on a particular card is an indirect way of managing risk. Who in their right mind would not pay at least the min every month when they have over $100 cash back sitting in their account? As they know failing to pay the min costs them $100 and if numerous defaults occur, they are probably no longer eligible to earn rewards points on future purchases. I think this philosophy works across most scores, which is why Cap1 is so successful in the subprime market. Even for folks with secured or unsecured with no rewards Cap1 cards see the incentive of applying/PCing to a rewards card if they maintain their accounts in good standing.
@MovingForward_2012 wrote:
But as long as they don't expire, they shouldn't be devalued.
Can you elaborate on this? There are plenty of point systems that don't let points expire but devalue them from time to time.
@enharu wrote:why not redeem it as cashback (such as a check), and put it into a savings?
nevertheless it's always a good thing to set aside money for emergencies.
I really like that idea! Thats what i plan to do with my rewards that i earn from my Discover IT and Chase Freedom cards. Thanks!
You can do the same thing with a statement credit and it is faster than waiting on a check. You normally charge X amount per month so instead of paying X one month you use a statement credit, you pay X minus cash back redemption and then you put the cash back amount in savings.
@HiLine: I haven't been using points long enough to have any of my points devalued. I have only been using rewards cards since July. I have not had my points devalued. I'm not sure if someone else may have and can comment? I thought if rewards points couldn't expire, they couldn't be devalued either. Are they devalued as a part of AA?