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Optimizing Cash Back Redemptions Using Elite Credit Cards

Discover how to get the most cash back from a top-tier credit card.

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Discover how to get the most cash back from a top-tier credit card.
Discover how to get the most cash back from a top-tier credit card.
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Plenty of us love using our hard-earned credit card points for travel rewards, but for many an affluent credit card holder, cash back trumps a free airline ticket or hotel night.  Unfortunately, most elite credit cards offer terrible cash back options, effectively strong-arming cardmembers into using points for travel rewards. But notice we said most and not all! Thankfully, there are still cards for those who prefer to redeem points for cash back without having to compromise on the benefits and services of a top-notch credit card.

Let’s say you spend $50,000 per year on your credit card and want to cash out your 50,000 points at the end of the year. Depending on which card you use, you’ll bank as much as $1,000 and as low as $250 come year’s close. Here, we examine the various cash back options for today’s luxury credit cards to see how they stack up.

What is a typical cash back rate in the luxury credit card market?

1% cash back is the most common rate in the luxury credit card market, a redemption value offered by Chase Sapphire Preferred®, Chase Sapphire Reserve®, Mastercard®Titanium Card™, and U.S. Bank Altitude Reserve Visa Infinite® Card.

Cash back on the Chase cards and the MasterCard Titanium Card can be redeemed in the form of a statement credit or direct deposit to a checking account while the U.S. Bank card’s cash back must be redeemed as a statement credit. At 1%, 50,000 points equates to $500.

So how can I get more than the typical cash back rate? What are the elite credit cards with the best cash back rates?

The Mastercard®Gold Card™ is the clear frontrunner for cash back redemption value in the luxury credit card market. Points are redeemed at a value of 2% and cashed out in the form of a statement credit or direct deposit to a checking account. Going off our previous example, you spend 50,000 per year and earn 50,000 points. A 50,000-point redemption with this card equates to $1,000 cash back. Compared to its principal highest-of-high-end competitors, this is double the redemption value of the Chase Sapphire Reserve and more than 3 times that of The Platinum Card®from American Express.

In second place is the Mastercard®Black Card™, which allows points to be redeemed at a value of 1.5% and cashed out in the form of a statement credit or direct deposit to a checking account. In this case, 50,000 points equates to $750 cash back. Compared to its principal competitors in the affluent market, this is 1.5 times the redemption value of the Chase Sapphire Preferred, more than double that offered by The Platinum Card from American Express and the Gold Card from American Express, and triple that of the Citi Prestige® Card‎.

Which cards should I avoid if I prefer cash back on my credit card purchases?

Membership Rewards®are great for many things, but cash back isn’t one of them. American Express’ Platinum and Gold cards offer the option of statement credits in the form of purchase erasers at a value of 0.6 on your Membership Rewards points. At this 0.6% cash back redemption rate, 50,000 points translates to a purchase eraser of just $300.

Even worse is the Citi Prestige Card‎, which returns just a half-percent when opting for a statement credit. Erasing a $50 purchase of your choice requires 10,000 Citi ThankYou®Rewards. At this 0.5% cash back redemption rate, 50,000 points translates to a value of $250. Ouch!

That said, depending on how much you value some of these cards’ other perks like access to The Centurion Lounge airport lounge network with The Platinum Card by American Express, it may be worth it to forgo a few Benjamins!

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Award-winning travel writer and economist Paul Rubio is a credit card enthusiast, whose sophisticated use of points and rewards has helped him travel to 125 countries for free. Paul is a Harvard graduate with a master’s degree in public administration and a master’s degree in economics. He also holds a bachelor’s degree from Boston University with a double major in economics and environmental policy and a minor in conservation biology. He attended both undergraduate and graduate schools on full scholarships. Paul worked in the field of wildlife conservation before embracing his writing talents full-time in 2008. Since then, he has won more than two dozen national awards for his exemplary work in travel journalism. The prolific writer contributes to a number of top-tier international, national, and regional publications including Condé Nast Traveler, Fodors.com, Palm Beach Illustrated, Private Clubs, and Robb Report.