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Reward credit cards can be a great way to accumulate points, miles or other rewards. There are currently over 183 million credit cardholders in the U.S, many of which earn rewards.
But, before you get too carried away daydreaming about what freebies you can accumulate, you need to be aware that there are some credit card rewards exclusions.
So, here we’ll explore this topic in more detail to help you to navigate this potentially tricky area.
Which Transactions Don’t Earn Rewards?
While the specific exclusions can vary from card to card, there are some categories of transactions that don’t earn rewards.
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Gross Purchases
If you were to spend $1,000 in one month and then return $500 of the merchandise, you should not expect to earn rewards on the full $1,000.
Your credit card issuer will only issue points or rewards on net purchases. So, even if the returns are credited in a future month, it is likely that the card issuer will rescind those points.
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Cash Advances
Many credit cards are issued with a PIN, so you can use it at ATMs. Even if you don’t have a PIN, you may still be able to walk into a bank branch and request a cash advance.
Not only is this a terrible idea, as you’ll be hit with a high interest rate on any cash advances, which begins to accrue immediately, but you will also not receive any rewards for this transaction.
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Cash Equivalents
This carries on from the previous point, but cash alternatives are also likely to be considered as not attracting rewards.
For example, if you buy cryptocurrency online, buy gift cards or purchase chips at a casino, you’re not likely to get rewards for these transactions.
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Credit Card Checks
These may also be called convenience checks and essentially, these are paper checks that may be provided in the mail with your monthly statement.
While these checks may seem convenient, they are a form of cash advance and incur the same high interest rates with no rewards.
So, if you’re making a purchase, be sure to use your card, not a credit card check.
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Balance Transfers
Although it may make sense to move a balance from a higher interest credit card to a new card with a promotional rate, you need to watch out for balance transfer fees and you won’t receive rewards.
Purchases That Don’t Count as Rewards by Card Issuer
In addition to the above exclusions, card issuers have their own specific exclusions for rewards. These include:
American Express
- Prepaid card loading: If you have a prepaid card and you’re paying to load it with your Amex credit card, you’ll not get rewards for this purchase.
- Purchase of American Express Travelers Checks: While Amex travelers checks can be handy when you’re away from home, you won’t earn any rewards for them.
- Taxes, airport fees, insurance premiums, booking fees and other service expenses that relate to a travel booking: Amex is clear about the fees and charges relating to travel bookings and these will not provide any miles, points or cash back.
- Foreign exchange transactions: If you’re using your card abroad, don’t expect rewards for your foreign exchange transactions
- Amounts credited back to the account following a refund: We’ve covered this earlier, but Amex is very clear about only offering rewards on net transactions.
Citi
Citi is fairly standard on what is excluded in its credit card reward program. You’ll not receive rewards on:
- Cash advances
- Balance transfers
- Interest fees
- Any other non purchase charges
Chase
- Purchases from Gift Card Merchants: If you make a purchase from a gift card merchant or a merchant that sells miles or points, the transaction will not attract any rewards.
- Suppliers: Purchases from merchants specializing in commercial or wholesales including gardening and landscaping or home furnishing supplies do not qualify for rewards.
- Third Party Payment Services: If you make a purchase via a third party payment service such as a mobile reader, online payment processor or mobile digital wallet, you may not receive rewards. The technology needs to be set up to process purchases in rewards categories to qualify for rewards.
- Product Warranties: Although a warranty can be a good way to protect your new item, you’ll not earn rewards for this type of purchase with a Chase credit card.
- Trip Insurance: If you use your Chase credit card to purchase trip insurance, you’ll not receive points, miles or cash back.
Capital One
- Checks accessing your account: These convenience checks or credit card checks work in the same way as a cash advance and will not receive rewards.
- Money Orders: Money orders also don’t attract rewards.
- Gambling: If you purchase gambling chips or lottery tickets, these are classified as cash equivalents and will not receive rewards.
- Refund Credits: Any amounts that are credited back to your credit card account after you’ve been issued with a refund will adjust your rewards balance. If the credit takes place in a future statement, the appropriate number of rewards will be deducted from your rewards balance.
Discover
- Cash at Checkout: If you receive cash at a point of sale transaction via the Cash at Checkout feature, you’ll not receive rewards.
- Transfers: Any transfers from Discover checking or any other type of deposit account, is a cash equivalent and will not attract rewards.
- Reward Purchases: If you pay for all or a portion of any purchases using your rewards, this amount will not receive rewards. For example, if you make a $100 purchase and $50 of it is paid for with rewards, you’ll only receive points, miles or cash back on the remaining $50.
- Third Party Payment Accounts: If the technology on third party payment accounts or services does not provide sufficient transaction detail, Discover will be unable to allocate rewards. This includes digital wallets, wireless or mobile card readers or similar technology.
- Illegal Transactions: Illegal purchases should never be made, but if you use your Discover card, you’ll not receive rewards and you’ll create a record of your transaction which could incriminate you.
Bank of America
Bank of America has a more specific list of purchases that don’t attract rewards. These include:
- Insurance
- Doctors and hospitals
- Schools
- Colleges, universities and professional schools
- Membership organization
- Government services and taxes
- Utilities and non retail services
Wells Fargo
- Returns/Credits: You’ll not earn any points or cash rewards on returns or credits, so only the net purchase cost will be used to calculate your rewards.
- Cash Advances: ATM transactions, cash advances, Superchecks and any other form of cash advance will not attract rewards.
- Cash Equivalents: This includes money orders, gift cards, wire transfers or prepaid cards.
- Fees: Including monthly or annual fees, late fees, returned payment fees.
- Transfers: Wire transfers, interest posted to a linked account or other types of transfers will not receive rewards.
- Gambling: This includes off track wagers, casino gaming chips, bets transmitted over the internet and lottery tickets.
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U.S. Bank
- Returns: US Bank will only issue rewards for net purchases. In the case of US Bank, this is the purchase cost minus any returns or credits.
- Cash and Cash Equivalents: This includes cash advances, travelers checks, money orders, gambling, lottery tickets, wire transfers, foreign cash transactions, U.S Mint purchases, prepaid card funding, convenience checks and ATM disbursements.
- Balance Transfers: If you move a balance from another card to your US Bank credit card, you may be able to get a more attractive rate, but you won’t earn rewards.
- Fees: You won’t earn rewards on any fees paid with your card including credit insurance charges.
Redeeming Credit Card Rewards: Common Exclusions
Once you have accumulated your rewards, you may think that you don’t have any other exclusions to worry about. Unfortunately, there are some common exclusions related to redeeming rewards.
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Minimum Cash Back Redemption
If you have a cash back credit card, you cannot simply request a direct deposit or statement credit for any amount. Most credit card companies have a minimum redemption amount, which is usually $25, but there are some exceptions.
For example, Bank of America does not have a redemption minimum for statement credit on its Customized Cash Rewards card. Chase also has no minimum redemption amount for statement credit on its credit cards.
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Gift Card Minimums
There are also minimums if you want to redeem your rewards in the form of gift cards. This is usually determined by the gift card denominations, but it may be as high as $25, as with the American Express cards.
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Statement Credit Does Not Count Towards Minimum Due
Even if you request a statement credit that is more than the minimum amount due on your statement, you will still need to make a payment that month. Statement credit is considered an additional payment on your account and it does not fulfill your monthly payment obligations.
Redeeming Miles Rewards for Flights and Upgrades: Common Exclusions
If you have a miles credit card, the redemptions are a little more straightforward. In most cases, you can search for award flights or upgrades and you’ll be given a cost in miles. However, there are a couple of exclusions to note.
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Award Flight Limitations
Not all flights can be purchased with miles and many airlines have a limited number of seats allocated to award tickets.
This means that you will need to check your preferred itinerary to see if there are any award seats available. Fortunately, many airlines have a “Pay with Miles” search option.
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Partner Programs
If you want to redeem your miles with another airline program, you should be able to still book a seat or pay for an upgrade. However, there are usually some limitations.
For example, with American Airlines AAdvantage Miles, you can book upgrades on British Airways or Iberia flights. However, you can only use your miles for upgrades on Y, W, B, C, J, D or R fares.
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Redeeming Points Rewards for Hotels: Common Exclusions
If you want to use your accumulated points for hotel stays, there are also some exclusions and limitations to consider
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You’re Likely to Need to Use the Card Issuer’s Portal
In many cases, if you want to use your rewards for hotel stays, you will need to book your accommodation using the card issuer’s travel portal.
This means that you’ll need to search for your travel dates on the portal to see what hotels are available and whether the rewards cost is conducive
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You Won’t Earn Hotel Rewards
If you’re a member of a hotel loyalty program, you will not earn loyalty points for your stay when you use your credit card rewards to pay for a room. There are some exceptions to this if the credit card has a partnership or relationship agreement with a specific hotel chain.
However, the purpose of a loyalty program is to encourage you to make direct purchases. So, if you’re trying to achieve a particular level in the hotel loyalty program, you’ll need to book directly and pay for your stay, rather than using your rewards.
