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Is it worth using reward points to pay off credit card debt in the new year?

Made a new year’s resolution to get rid of credit card debt? Here’s how reward points could help.

With increased spending throughout the Christmas season and huge bonus point offers on the table, this time of year can be ideal for earning credit card rewards. But if you have used plastic to pay for your spending over the summer holiday period, chances are that you’ll have both a bigger point balance and more debt in the new year.

Usually, the interest applied to your balance will outweigh the value of the rewards you earn. So if you’ve made a new year’s resolution to pay down your card debt, you may want to consider turning your reward points into credit for your account. Here, we look at how this option works and the value of using points for a cashback to help you decide whether or not it will be worth it for you.

How can I use reward points to pay off credit card debt?

Most reward credit cards allow you to redeem points for cashback on your account. Some programs, such as Amex Membership Rewards and Citi Rewards, even have different options for account credit and annual fee credit.

The process for using points for a cashback reward varies between programs, but generally involves the following steps:

1. Log on to your credit card account or reward account (if they’re separate).

2. Search for “cashback” or browse the rewards categories. Note that the account credit option is usually included in categories for “financial options”, “gift cards and cash” or “other rewards”.

3. Select the amount of cashback you’d like to redeem with your rewards.

4. Follow the prompts to complete your redemption.

Once your redemption is processed, allow several days for the cashback reward to be credited to your account.

How much cashback will I get for my reward points?

The amount of points required for a cashback reward varies between reward programs. Below, we’ve outlined the amount of points required to redeem a $100 cashback through all the major credit card reward programs.

Note that for programs that do not offer cashback as account credit, we have listed alternative options and the points needed in the “redemption requirements” category. This should help give you an idea of the possible costs and savings with your rewards program.

Rewards programPoints for $100 cashback)Redemption requirements
American Express Membership Rewards14,500
  • Minimum cashback redemption of $50 for 8,000 points.
  • Amounts credited will appear on the first billing statement following redemption.
  • Only available for credit on the primary card account.
ANZ Rewards Program25,000
  • Minimum cashback redemption of $50 or 12,500 points.
  • Credit will be allocated to the account within two business days.
  • You can request credit for another ANZ account.
Bankwest More Rewards Program38,000
  • Minimum cashback redemption of $50 for 19,500 points.
  • Allow up to 7 days for processing of the money into your account.
  • Cashback can only be redeemed for your Bankwest credit card account.
Bendigo Bank Rewards38,464
  • Minimum cashback redemption of $50 for 19,232 points.
  • Credit will be made within 14 business days of your redemption.
  • Cashback can only be credited to your Bendigo Bank Rewards card.
Citi Rewards ProgramFrom 40,000
  • Points required for a redemption vary between cards.
  • Redemption amounts start from $25.
  • Cashback will be posted to your account within seven days.
Commonwealth Bank Awards ProgramNot currently listed. Please refer to the CommBank Awards website when you log in for current cashback offers
  • The number of Awards points required to obtain a cashback Award is subject to change at any time without notice.
  • Funds may only be credited to the member’s CommBank Awards credit card from which the points were earned.
  • Cashback will not contribute to any minimum monthly payment due.
  • As an alternative: It costs 20,000 points for a $100 gift card.
flybuys RewardsN/A
  • Credit card account credit is not available.
  • As an alternative: It costs 20,000 points for $100 flybuys Dollars.
Heritage Bank Heritage CreditsNot listed
  • As an alternative: It costs 64 Heritage Credits for a $100 gift card.
HSBC Rewards Plus30,000
  • Minimum cashback redemption of $25 for 7,500 points.
  • The cashback will be credited to the card from which you have redeemed your points.
Jetstar credit card rewards programN/A
  • Credit card account credit is not available.
  • As an alternative: 100 Jetstar Dollars can be used for $100 worth of purchases with the airline.
KrisFlyer Rewards ProgramN/A
  • Credit card account credit is not available. Currently the KrisFlyer online store does not list any cash equivalent rewards.
Macquarie Bank credit card rewards program27,500
  • Minimum cashback redemption of $100 for 27,500 points.
  • Cashback can be redeemed to a Macquarie Transaction Account, Macquarie Savings Account, Macquarie Cash Management Account, Macquarie Cash XL Account or a Macquarie Investment Accumulator Account.
Myer OneN/A
  • Credit card account credit is not available.
  • As an alternative: It costs 10,000 Shopping Credits to get a $100 Myer One shopping card.
BOQ Q Rewards40,000
  • Minimum cashback redemption of $50 for 20,000 points.
Qantas Frequent FlyerN/A
Emirates Skywards RewardsN/A
  • Credit card account credit is not available.
  • As an alternative: It costs 23,700 miles for a $100 Westfield gift card.
Suncorp Bank Rewards40,000
  • Minimum cashback redemption of $25 for 10,000 points.
Velocity RewardsN/A
  • Credit card account credit is not available.
  • As an alternative: It costs 18,000 points for a $100 Westfield gift card.
Westpac Altitude Rewards25,000
  • Statement credit redemptions are only available in $50, $100, $500 or $1,000 amounts.
  • The funds will be credited into the cardholder’s Westpac Altitude credit card account.
  • Points will be deducted immediately from your Altitude Rewards account and you should allow up to seven business days for the funds to be credited to your card account.
Woolworths RewardsN/A
  • Credit card account credit is not available.
  • As an alternative: It costs 20,000 points for $100 Woolworths Dollars.

If we look at credit card reward programs specifically, the median cost for a $100 redemption is 34,000 points. The specific point amounts range from 14,500 (AMEX Membership Rewards) to 40,000 (Citi Rewards, BOQ Q Rewards, Suncorp Rewards) for these programs.

For programs that don’t offer cashback on your account but do offer an equivalent, such as gift cards, many options require 20,000 points or less, with the Myer One program offering the most competitive transfer of 10,000 points for a $100 Myer One gift card. So, in some cases, it may be better value to redeem points for gift cards and then use your own cash to pay off your credit card, rather than using points directly.

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What are the other factors to consider?

Before using reward points to pay off your credit card balance, make sure you consider the following details:

  • Point value. Depending on your reward program, a cashback may not be the most cost-effective way to use your points. Make sure you consider the amount of points you’d need to use for a cashback redemption, and compare it to other reward options to decide if this will give you the most value and convenience based on your circumstances.
  • Shopping and frequent flyer programs. If you have a credit card that earns points for a supermarket or frequent flyer program, you may not be able to redeem them directly for cashback on your credit card account. But programs such as flybuys, Woolworths Rewards, Qantas Frequent Flyer and Velocity all offer alternative cashback options you could consider instead.
  • Minimum payments. While getting cashback credited to your account can reduce your balance, it usually doesn’t count towards your minimum monthly payment. This means you will still need to pay at least the minimum amount listed on your statement to keep your account in good standing.
  • Reward processing. Remember to allow time for your cashback reward to be processed. As a guide, it could take anywhere from 2–30 days for your reward to show in your account, so remember to continue making repayments in that time to reduce the overall interest you pay on your debt.
  • Other redemption options. It’s worth comparing the value of a cashback redemption with other options that also give you a way to save money, such as gift cards. As our analysis in the table above shows, in some cases you could get a $100 gift card for fewer points than a $100 account credit would cost you.

Should Milla redeem her reward points for cashback or gift cards?


At the start of December, Milla was approved for a new American Express credit card that offered 1 Membership Rewards point per $1 spent and 30,000 bonus points if she spent $3,000 in the first 3 months she had the card. Milla ended up spending $4,000 in December and started the new year with 34,000 points and $4,000 debt.

While Milla wants to pay off her credit card, she also wants to get good value out of her rewards. So she considers the following options:

  • Redeeming Membership Rewards for cashback on her account: If Milla used these points for cashback on her account, she could get $200 (29,000 points). This would leave her with 5,000 points in her account.
  • Redeeming Membership Rewards for gift cards: Alternatively, Milla could use her points to get a $250 Woolworths WISH gift card (33,750 points), leaving her with 250 points in her account. In comparison, an account credit redemption for $250 would cost 36,000 points, which means the gift card offers greater value.

Based on this comparison, Milla decides to redeem her points for a $250 gift card. She uses this to pay for her groceries, and puts the money she’d normally spend on shopping towards paying off her credit card balance.

As you can see, redeeming your reward points for cashback to repay your credit card balance isn't always the most valuable way to use your points. It could help you make a dent in repaying smaller debts but make sure to compare your options before redeeming your points. If you do need to clear your debt and want to save your points for a different reward, a 0% balance transfer credit card could always come in handy.

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Images: Shutterstock.

Amy Bradney-George

Amy is a senior writer at finder.com.au with more than 10 years experience covering credit cards, personal finance and various lifestyle topics. When she’s not sharing her knowledge on money matters, Amy spends her time as an actress.

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