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Rakuten (formerly Ebates) has finally made it possible for members to change their preferred earning method from cashback to Membership Rewards. When Rakuten announced its partnership with Amex Membership Rewards in early 2019, it wasn’t possible to convert an existing Rakuten account from cashback to Membership Rewards. Although many simply created a new account, those with a Rakuten Cash Back Visa® Credit Card (which can't be linked to a newly created Rakuten account) were stuck with cashback.
How the Rakuten Shopping Portal Works
Rakuten partners with merchants who pay them a commission for referring customers. When you buy through a retailer listed on the site, Rakuten shares some of the revenue they receive in the form of cashback or Membership Rewards points.
The cashback percentages listed on the site are equivalent to the number of Membership Rewards you'll earn per dollar spent. For example, if you spend $100 at a merchant showing 10% cashback, you'll get either $10 or 1,000 Membership Rewards, depending on your earning preference. The rates and merchants change daily, so you'll want to check back often when considering a big purchase.
Double Dipping with a Rewards Card
The rewards offered by Rakuten and other shopping portals are extra points on top of any points you earn by paying for your purchase with a rewards card. For example, if you make a purchase at Macy's with your Chase Freedom® card, you'll earn 5X Ultimate Rewards on your purchase amount. (Department stores are one of the Freedom Card‘s rotating 5X categories for Q4 2019). If you were buying something from Michael Kors or Shoes.com, you could use one of the cards that earn a great rate on everyday purchases like The Blue Business® Plus Credit Card from American Express, Capital One Venture Rewards Credit Card, or the Chase Freedom Unlimited®.
- Earn 75,000 Miles once you spend $4,000 on purchases within 3 months from account opening; worth $750 in travel if redeemed for a fixed-value, or potentially much more when transferred to airline partners
- 2 Miles on every purchase
- Fee credit for Global Entry or TSA Pre✔® (up to $100)
- No foreign transaction fees
- $95 annual fee
- 5X miles per dollar on hotels and rental cars booked through Capital One Travel
- 2X miles per dollar on all other purchases
To calculate how many points you'll earn from a purchase, simply add the multiplier from the credit card to the rate shown on the Rakuten site for the merchant. If you use your Capital One Venture card to buy from a merchant advertising 10% cashback, you'll get 10X Membership Rewards from Rakuten and 2X Capital One Rewards from your card.
Earn 3X with the Rakuten Visa
But one of the best ways to earn more points on purchases through this shopping portal is to use the Rakuten Visa, which offers 3% cash back or 3X Membership Rewards on all purchases through the portal. Until now, anyone who opened this credit card in tandem with a cashback-earning Rakuten account didn't have a way to convert to earning more valuable Membership Rewards. With the latest announcement, the Rakuten Visa becomes much more valuable.
How to Convert to Earning Membership Rewards
Before you can start earning Membership Rewards, you need to ensure that you have an Amex card that earns them like the The Platinum Card® from American Express or the American Express® Gold Card. However, once you have linked Rakuten to your Membership Rewards account, you don't need to pay with an Amex card to earn your points.
Switching is easy; all you need to do is log into Your Rakuten account and head over to the “Account settings” area and select the option “How would you like to get paid?” At this point, all you need to do is choose American Express.
If you have a cashback balance in your Rakuten account when you switch over to Membership Rewards, it will not be automatically converted; you'll be paid cashback on any rewards accumulated prior to switching your earning preference. You will only start to earn Amex points once you have linked your Membership Rewards account.
Our Take
This latest move by the Rakuten shopping portal is excellent news for Membership Rewards aficionados and those who are more interested in earning points than straight cash back. If you plan to use rewards for travel, Amex offers far better value than cashback. The total point value will depend on how you redeem, but a conservative estimate would put Amex points at close to double the value of earning cash through Rakuten.
For the occasional online shopper, it probably isn't worth getting the Rakuten Visa to increase your earning by 3x—especially if you already have another card that earns better than one point per dollar on everyday purchases. However, if you find you can click through the Rakuten portal for a significant number of purchases, the Rakuten Visa—paired with a Membership-Rewards earning Rakuten account can supercharge your Amex points balance.
Source: Frequent Miler
The comments on this page are not provided, reviewed, or otherwise approved by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
The Rakuten offer has worked well with Christmas shopping!
Can you make purchases on the rakuten page from anywhere in the world?
Rakuten used to be an e-Commerce retailer such as Amazon or eBay. What happens to them recently?
If anything it’s a good way to keep your mileage points active and not let them slide into dormancy and become obsolete.
Good use for membership points that I would otherwise ignore.
This is great, but I have been having problems with their restaurant cashback with MR….
Oooh, thanks for this. I didn’t know about this change.
Hey thanks for the tip. Converting my account over now!
Finally time to switch the account and get that Rakuten card to supercharge earnings!
This has certainly made ebates/rakuten much more valuable compared to topcashback.
To a degree, yes, but one still has to do the mah to see which ($$ with TCB or MR points with rakuten ) represents the better return. I.e. if TCB is offering, say, 10% and rakuten 1 MR point, it’s tough to imagine not taking the 10%.
Almost sounds too good to be true. It does sound like a great way to build Membership Points this Holiday season!
I have already updated my account to earning MR points! I was so happy to see come into my email box. I think it’s better for me to earn MR points than cash back at this point. I will have to look into if I can change it back to cash later. I need to read up on how long it takes to get into my Amex account too. I am assuming I have to initiate the points going to my account?
This is awesome news!
This is exciting. And Rakuten has 11% rewards on 250+ stores today only.
Good news about the Rakuten Visa card, but likely not worth a 5/24 slot.
Still need to pick up an MR-earning card. Been holding out for a plat offer but still nothing
Thanks! They have made a lot of changes lately and added new redemption options – didn’t know about this one.
Finally! I have been waiting so long to set this up in my account.
I love Ebates, which is now Rakuten!!!
Good deal. Great option to expand your earnings selections.
Does the PayPal option incur fees?
Interesting good to know.
This program is really great I wish I could apply for some cash back cards.
I’m not sure if it’s worth it to get membership points instead of money. I haven’t done the calculations. What do you think?
Depends on how you redeem. I think Amex is safely in the 1.5-2.0 cents per point range. So for most, this will be a clear win with Amex over cash, assuming you redeem Amex towards travel.
Thanks!
It’s nice to have more options when using your credit card. Though cash is king sometimes you can still get outsized value with membership reward points.
This is a cool development. Do you know if this is available in Canada, and whether there are plans to add other points programs in the future beyond AMEX points?
I don’t know about Canada unfortunately. I think Rakuten probably signed an exclusive deal with Amex (no inside knowledge here but that seems the most likely). I wouldn’t expect other point programs from Rakuten, but maybe a competitor will partner with a different transferrable currency.
Questions about programs outside the US pop up now and again. It’s unfortunate that there aren’t usually users around to help answer them. Although, that probably has to do with the fact that programs abroad aren’t usually as robust as US offerings.
Great, thanks por the post. Very usual as always, hope to try this soon! Thanks!!