Xbox Live's previous rewards system gave participants Microsoft Points for completing surveys, making specific purchases and other actions. With Microsoft Points phased out in favor of local currency, the new Xbox Live Rewards program gives players credits for a variety of actions.
If players play new games, renew Xbox Live subscriptions and even earn Achievements, the Xbox Live Rewards program gives credits that people can later convert to currency used for Xbox Live purchases. When you complete enough surveys and refer enough friends, the 5000 credit threshold enables people to convert their credits into about $5.
People will receive any earnings in their accounts on the 15th and 30th of each month.
Source: Xbox Live Rewards