Why You Should Be Using Rakuten If You're Earning Membership Rewards Points

Rakuten allows you to earn Membership Rewards Points instead of cash back when shopping online through their portal which is great for cardholders.


There are tons of cash back portals available to those who want to maximize the rewards they earn shopping online. Most cash back portals follow the same format:

  • They provides you with thousands of affiliate links to stores worldwide
  • You click on an affiliate link and it drops you off at the stores website to shop as normal
  • You make a successful purchase with the store
  • The cash back portal makes money off your purchase since you used their link
  • They pay you a portion (or in some cases all) of the money they made off the affiliate sale

The good thing about cash back portals is that easily allows you to double and triple dip in rewards. For instance, you can go to just about any cash back portal and book a rental with Avis.

rakuten avis

If you were to book a rental with Avis through a cash back portal you would earn:

  • Cash back through the cash back portal
  • Points from the credit card you used to pay for the rental
  • Avis Preferred Points

Going directly to Avis would just earn you the credit card rewards and Avis Preferred Points. It costs you no extra money and very little effort to use a cash back portal. Not using portals is leaving free money and (what you're about to learn) free points on the table.

Earning Membership Rewards With Rakuten

As previously mentioned, there's lots of cash back portals available. Which ones you use is entirely up to you. You can stick to using one portal or you can use whichever portal is offering you the best deal on any given day (hint: use CashBackMonitor.com). No cash back portal is always better than another with deals consistently changing on a day-to-day basis. But if you're earning Membership Rewards Points and you value Membership Rewards Points at 1 cent or higher, you should really consider using Rakuten at just about every chance you get.

rakuten payment options
You can earn Membership Rewards or cash back via a paper check or PayPal.

Rakuten started allowing new members to earn Membership Rewards Points in 2019. They then took it a step farther and started allowing current members to change their account from earning cash back to Membership Rewards Points following a few easy steps.

The good thing about this is that the amount of Membership Rewards Points you earn is equal to the amount of cash back you would normally receive booking through Rakuten. This allows you to earn a significant amount of Membership Rewards Points just for doing what you were planning on doing anyway... shopping online.

earning amex membership rewards points rakuten
You'll earn points faster than ever if you use Rakuten when shopping online.

How Does It Work?

When you create a Rakuten account and switch your earning preference to Membership Rewards Points, you will not see much of a difference. Rakuten will alert you the first few times you log in and remind you that you're earning Membership Rewards Points instead of cash back. You'll also get a few other small notifications such as in the slide show on the home page (see image above).

When you're searching the Rakuten website, every link still reflect cash back. Rakuten does not changing the lingo on their website to reflect that you've switched your account to Membership Rewards Points. You'll just have to remember that you're earning points. So if you see a store on Rakuten offering '2% Cash Back', you will actually be earning '2x Membership Rewards Points' if you were to make a purchase with that particular store.

For example, let's look at this deal going on for Saks Fifth Avenue:

rakuten saks fifth avenue
Rakuten is offering 10% cash back on Saks Fifth.

If I were to click 'Shop Now' and make a purchase on the Saks Fifth Avenue website, I would earn 10 Membership Rewards Points per $1 spent. Yes, 10x. You would also earn the points offered through the credit card you used to make the purchase which is another thing worth mentioning. Rakuten/AMEX does not require you to use a Membership Rewards credit card in order for you to earn points through your Rakuten account. You just need to have at least one Membership Rewards Point earning card so that you can sign up for this benefit and earn points on your purchases. This allows you to earn points across more than one rewards program.

rakuten saks fifth avenue
I've seen Rakuten offer as much as 10% cash back on IHG, Marriott, and Hilton purchases.

If you were to use Rakuten to trigger a shopping session with IHG Hotels & Resorts with the standard 3x points they offer and use the Chase Sapphire Reserve to pay for the stay, you would earn:

  • 3x Ultimate Rewards Points Per $1 Spent
  • 3x Membership Rewards Points Per $1 Spent
  • Up To 20x IHG Points per $1 spent based on elite status

That's a lot of valuable points which is why I heavily recommend booking travel using cash back portals regardless of whether you're earning cash back or points.

Rakuten pays its members four times per year depending on when you earned your rewards. Generally, you'll earn 3 months worth of rewards and then get paid for those three months about a month-and-a-half later. This is different from most other portals which allows you to cash out your rewards as you earn them.

Rakuten Pay Schedule
Earning Period Date Paid Out
January 1 - March 31 May 15
April 1 - June 30 August 15
July 1 - September 30 November 15
October 1 - December 31 February 15

When your Membership Rewards Points are paid out to you, they will be deposited into your Membership Rewards account for you to use as normal. So if you use Rakuten for everything under the sun, you'll receive a large amount of Membership Rewards Points quarterly.

Should I Use Rakuten For Everything?

This will depend on you. I use Rakuten as my primary cash back portal, but I have accounts with all of the popular portals which includes:

Promotions and cash back amounts change on the daily for most portals so there's not many instances in which one portal is "always" the best. You can use CashBackMonitor.com to see which portal is offering the most cash back for any given website. If Rakuten is only offer 2% cash back shopping with Marriott and TopCashback is offering 10%, then obviously you'll want to go for the 10% since 10% cash back is better than 2% cash back or 2x Membership Rewards Points.

topcashback gift card option
PayPal, paper checks, and gift cards are the most common ways to cash out with cash back portals.

And remember, most other portals allows you to cash out your rewards on your own time. So if you were to earn money with TopCashback, you could just sign into your account and cash it out to your PayPal account (or any other option they offer) after it posts. You do not have to wait 3-4 months like you do Rakuten. So you can use Rakuten as your primary cash back portal and have the others as backup for when they offer superb deals (which they do) from time to time.

Switching To Points With Rakuten

If you're new to Rakuten, you'll be asked how you want to receive your rewards when you sign up for an account. You'll be give the chance to choose Big Fat Check (paper check mailed to you), PayPal, or Membership Rewards Points. If you don't have account, consider signing up for a Rakuten account through The Point Calculator to help out the site.

If you already have a Rakuten account, you'll be able to convert your account in a few easy steps.

How To Earn Points With Rakuten

  1. Head to Rakuten.com
  2. Click on your name in the upper right hand corner and go to Account Settings.
  3. Choose Switch to Membership Rewards Points as your method of payment.
  4. Rakuten will notify you that it will payout any cash back you've earned.
  5. You'll be asked to log into your American Express online account to verify if you're eligible.
  6. If eligible, Rakuten will email you a 6-digit code. Enter that code into the box asking for it.

You can go to your 'My Account' page to see any important notifications that you may have pertaining to the switch to Membership Rewards.

rakuten membership rewards convert

Under 'My Account', you'll now see Membership Rewards Points reflected under Lifetime Earnings along with any cash back you may have earned since you've had the account opened. It also keeps track of how many points will be transferred to your Membership Rewards account and gives you the date.

As previously stated, any cash back you had will be paid out to you via either PayPal or Big Fat Check depending on how this was set up before you made the switch. This page will notify you of the date you'll receive that cash back. So if you have a preference, you'll want to select it before switching over to Membership Rewards Points.

That's all there is to switching. You'll earn Membership Rewards Points on all purchases made through Rakuten. Remember that Rakuten will still list all links as Cash Back throughout the site, but you will be earning Membership Rewards Points. So again, if you click on Shop Now and it says you'll be earning 3% cash back, you will actually be earning 3x Membership Rewards Points.

Can You Switch Back To Cash Back?

If at anytime you decide you do not want to earn Membership Rewards, you can always switch back to Big Fat Check or PayPal as your payment method. This is done the same way by going to Account Settings and selecting a different method of payment. You'll be notified that you will not be able to switch back to Membership Rewards if you do so.

Any Membership Rewards Points you earned will be converted to cash back. So if you had 2,500 Membership Rewards Points in your balance, it will now say $25.

rakuten cash back
The 2,500 Membership Rewards Points that were in my account were converted to $25 cash back.

The Membership Rewards Points that were converted to cash back will not be paid out to you. You'll continue to earn cash back as you normally would with Rakuten. Just note that the ability to select Membership Rewards will be gone from your account:

no membership rewards points rakuten
This particular account no longer has the ability to select Membership Rewards as a payment option.

If you ever wanted to earn Membership Rewards again, you would have to create a new Rakuten account. So be aware of that if you decide to switch back to earning cash back.

Summary

The ability to earn Membership Rewards Points instead of cash back is a game changer for anyone who knows how to redeem them for excellent value. This will heavily benefit those who transfer Membership Rewards Points to airline and hotel partners as you'll basically be earning frequent flyer miles and hotel points shopping through Rakuten. If you value Membership Rewards Points at a value less than 1 cents, then you'll want to stick with earning cash back since you'll get a better return.

FAQ

Listed below are some of the most common questions when it comes to earning Membership Rewards Points with Rakuten.

If I have cash back pending in my Rakuten account, what will happen to it if I switch?

Rakuten will pay you your cash back via PayPal or Big Fat Check and all future earnings will be Membership Rewards Points.

Who is eligible to receive Membership Rewards Points?

Anyone with a valid Membership Rewards account that is in good standing can opt to receive points instead of cash back.

Are there any restrictions on the points I receive from Rakuten?

No. Rakuten rewards points will be deposited into your Membership Rewards account and you'll be able to use them as normal.

Is there any reason I shouldn't switch to earning Membership Rewards Points?

If you redeem Membership Rewards Points for less than 1 cent, earning points will not benefit you and you would be better off earning cash back.

Who benefits the most from earning Membership Rewards Points with Rakuten?

Those who transfer their Membership Rewards Points to airline and hotel partners will benefit the most from this benefit.

Will I need to enter my credit card information to sign up for this benefit?

No, but you will be prompted to log into your American Express Membership Rewards account.

Can I switch back to earning cash back?

Yes. Just note that you will not be able to eligible to sign back up to earn Membership Rewards on that account.

Will I earn a bonus for signing up for Rakuten?

You can earn an additional $10 bonus on your first purchase signing up through The Point Calculator.


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