Using Cash Back Rewards

[Lauraist]

Hi! I went through a BK last year and am rebuilding.

Before my BK, I had a Discover It card. During most of the time.I had the card, I just saved up the rewards and didn't use them... until my financial situation started going bad, then I used the saved rewards for a payment. Right after that, I started getting hassle from Discover offering "help", as if using the reward for a payment caused them to think I was in financial trouble. Of course, if they did, they were right.

Anyway, post-BK, I have a Mercury Card which has a similar cash back reward system, a statement credit that you have to activate. I'm not in any financial trouble now, but I'm wondering if taking my reward to lower my balance would cause the issuer to think I am. I've only had the Mercury about 2 months and am making my first payment next week.I plan to PIF the first stement right on the due date. (I've read issuers don't giuve you extra "credit" for paying earlier than necessary, so I don't.) Anyway, do issuers consider using cashback rewards a sign of financial trouble? Should I save them up "forever"? Or should I use them as soon as I earn them, to establish a precedent of using them so that using a large amount of reward money as a payment a few years down the road doesn;t look "suspicious"?

[Anonymous]

Using rewards isn't an issue

 They just want you to pay on time

[pinkandgrey]

I've never heard this lol. I frequently use CB rewards as statement credits. Why earn them if you won't use them? Go ahead and use them if you need or want to do so! 

[Lauraist]

Thanks!

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@pinkandgrey wrote:

I've never heard this lol. I frequently use CB rewards as statement credits. Why earn them if you won't use them? Go ahead and use them if you need or want to do so! 

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[OmarGB9]

Nope never heard of that. Use as you wish.

[Mr_Mojo_Risin]

Sometimes I'll let them add up over a few months, then use them. Other times I'll just use them whenever. 

Definitely don't worry that, you earned them so use them how you want.

[Slabenstein]

One thing that might bear mentioning is that some issuers don't count a rewards statement credit as meeting the minimum monthly payment, so if you don't make at least the minimum as a regular payment in addition to the rewards redemption they'll think you're in financial trouble because you missed a payment.  For Discover, this isn't the case (they will count it towards your minimum), but I don't know about the Mercury card.  Since you're going to PIF this statement, it shouldn't matter, but it's something I'd double check for future reference.  Otherwise, as said above, you can use them in any way that card's redemption allows.  I like to bank my cash back so I can treat myself to a book now and then, other people like to redeem monthly.  Neither is going to look odd or suspicious to an issuer, since it's normal use behavior.

[Anonymous]

I always cash them toward my bill on Amex, Disco, and CapOne. Never an issue with any of them.

[coreysw12]

On a Citi DoubleCash card it's encouraged to redeem your cashback to your bank account and use it as a payment towards the card. Because redeeming for a statement credit causes you to forfeit the 1% cashback you'd normally get from paying the card.

Anyways, it's totally normal for people to use their cashback to pay down the card. It won't set off any red flags.

Discover likely sent you the stuff about financial hardships because they (and most other banks) have been sending that stuff to everybody this year. Every time I log into any of my cards, there's a big banner across the top with advice for if I'm facing financial hardship from covid, even though there's no reason for them to think that I am.