A listener recently called in with a gripe: “Why can’t I get a check from my 2% cash-back cards anymore?” Specifically, they mentioned Wells Fargo Active Cash and Citi Double Cash.
Clark’s response? This might be part of a growing trend, credit card companies nudging us to spend those rewards on stuff (hello, gift cards!) instead of cashing out.
My Old Strategy:
For years, I let my points pile up like a squirrel hoarding acorns. Then, when a big purchase or bucket-list experience came along, I’d cash in those points to soften the blow.
My New Hack:
Recently, I flipped the script. Here’s what I do with my Wells Fargo Active Cash card:
Use points to pay down part of my balance—say, $1,000m then pay the remaining balance from checking.
Move that same $1,000 from my checking account into a money market account at my credit union.
Tag that money for the big splurge or experience I had in mind.
Why? Because when interest rates were north of 4%, that earmarked money is now growing instead of sitting idle.
It’s like turning cashback into a mini-investment strategy!
I subscribe to the K-I-S-S principal. Keep It Simple Stupid! I have 3 cards with rewards. When any of them get above $50 I just do a statement credit and forget about it.
I have the Citi double cash card and use regularly. I request my cash award to be directly deposited to my checking acct. because I like to keep up with that extra income. To me that is the same thing as waiting for them to send you a check.
Yeah, I don’t know if that is a problem right now or will be in the future. But when it’s applied to your credit card balance, it just disappears.
If you get a check, it may wind up being a tax liability. (And yes, I get that you may have never declared it or paid taxes on it. You can cheat or get your taxes wrong all you want – until you get audited.)
No, there is no tax liability. The money you’e receiving is “cash back,” so it’s basically a small refund of your spending. It is not considered income.
Well here is another with a caveat. That is grab scrip (gift card) when offered at a discount. Commonly 10% more declared value than the amount your “points” would normally fetch. This is great if your scrip is for some place you regularly use.
Recent problem encountered at WF on “redemption” for such a card: WF absolutely REFUSES to send to a secure address, commonly called post office box. Even attempt to use USPS sanctioned addressing by street address and unit or apt number is rejected! Well my place has a standard mailbox out front which is very insecure. The community pedestal mailbox collections are also insecure as there is a whole industry of breaking them open. So the most secure is a PO box which WF will not use.