Rakuten Adds Option to Earn Membership Rewards for Existing Users

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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®.

Capital One® Venture® Rewards Credit Card
Capital One® Venture® Rewards Credit Card
Annual Fee$0 intro for first year; $95 after that
Welcome Offer 50,000 miles after spending $3,000 on purchases within 3 months from account opening
Following the revamp of Capital One's rewards program and the addition of airline transfer partners, the Capital One Venture has catapulted into our list of top travel rewards cards. The ability to earn 2X miles on every purchase, and up to 10X points on hotels provides a decent return on spending, plus the card offers some great perks.
  • 50,000 Miles after spending $3,000 on purchases within 3 months from account opening; worth $500 in travel if redeemed for a fixed-value, or potentially much more when transferred to airline partners
  • 2 Miles on every purchase, plus earn 10 Miles on hotels at hotels.com/venture, through January 2020
  • Fee credit for Global Entry or TSA Pre✔® (up to $100)
  • No foreign transaction fees
  • $0 intro for first year; $95 after that
  • 2 Miles per dollar on every purchase, every day.
  • 10 Miles per dollar on hotels at hotels.com/venture, through January 2020

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

Rakuten Adds Option to Earn Membership Rewards for Existing Users
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