Not everyone is interested in playing the signup game. Some people do not want to waste their time and mental energy on tracking down multiple credit cards, annual charges, and reward programs.
You may want to maximize one or two credit cards rather than chase rewards if you fall into this category. You can earn a lot of rewards if you know how to maximize your cards’ benefits and bonus categories.
Understanding how your cards work is key. You can earn more points by looking for ways to spend your money. Here are some helpful tips.
Imagine every bill that you could pay using a credit card
The best way to maximize your rewards is by spending as much money on credit cards as possible. Rewards cards award points for each dollar spent. Calculate how much of your monthly expenses you can pay on a credit card.
You may not know that you can pay bills with a credit or debit card. Some expenses that you can pay using a credit card, even though your bills will vary, include:
- Rent
- Electricity or gas bills
- Health Insurance
- Cable TV and Internet
- Cellular phone
- Taxes
- Daycare
- Home and auto insurance
- Subscribe to services
- Student loans or college tuition
- Medical Bills
- Lawn care
Remember that these are only a few of the bills that you can pay with credit. You may have other, unusual expenses that you need to pay. These can be easily paid on credit, depending on your situation.
Remember that you should pay these extra bills with your credit in addition toyour daily expenses such as groceries, dining out or bus fares, and other miscellaneous expenditures. If you can, use your rewards card to pay for any purchases you make in person or on the internet.
Use your reward card categories to maximize your benefits
You should also take advantage of your favorite bonus categories on cards, whatever they are. It’s important to use the correct card when paying bills in order to earn bonus points.
Say you have two credit cards. One earns 3x the points for dining and travel, and another earns 6x at the grocery store . You would do well to use your travel card for purchases related to dining and travel and the other card for food. The rewards you receive for individual purchases might seem small, but using the correct card to make the right purchase will help you earn much more over time.
Set up automatic payment of bills with credit
We all have our bills set to pay automatically. Whether it is Netflix, Hulu, gym memberships or utility bills, most of us do. You should make sure that each bill you set up for automatic payment is paid using your rewards card, and not with a debit card. You can then earn points for those monthly expenses.
Shop online and join dining clubs
You can earn points by shopping through many flexible reward programs, frequent flyer programmes, and loyalty programs at hotels. Shopping portals are available from major airlines such as American and Delta. United has a similar shopping portal.
Dining clubs are also offered by some programs, such as Southwest or Delta. You can earn extra points or miles by dining at restaurants that are part of these programs. You can join for free and earn miles by dining out.
What is the average income of a family?
Consider how it might work in reality if you’re sceptical that the average family could earn meaningful rewards by signing up for multiple cards. Imagine a family with four adults who each have a rewards card. They have the following:
- Cash back cards that give 2% back
- Travel credit cards that offer 3% back on dining and travel
- Spend up to $6,000 per year and earn 6% cashback at the grocery store with a rewards card
We used Bureau of Labor Statistics spending averages for 2017 to figure out what this family could earn. This is a breakdown of the data from 2017 and how much a household could earn based on their average spending.
- Rewards of $261.78 at 6% for Food at Home ($4,363)
- Food Away From Home ($3,365.00): $100.95 with 3%
- Utilities and fuels ($3,836) – $76.72 at 2%
- Household Operations ($1,412): 28.24 cents at 2%
- Household Supplies ($755): $45.30 6%
- Household furniture and equipment (up to $1,987): $39.74 based on 2%
- Apparel and Services ($1,833): $35.66 at 2%
- Gasoline ($1,968) and motor oil: $39.36 at 2.2%
- Other Vehicle Expenses ($2,842): $ 56.84 at 2%
- Healthcare ($4,928) – $98.56 at 2%
- Entertainment ($3,203), $64.06 at 2%
- Personal Care Products ($762): $45.72 6%
- Education ($1,491) – $29.82 at 2%
Total reward: $923.75
You can earn much more than $900 in rewards per year. These are only a few of the expenses that the average family has to face. You could increase your income by paying some of your monthly bills on credit, such as daycare and rent.
What to look out for
Although maximizing your rewards card is a good idea, there are still pitfalls you should be aware of if you use a credit cards. What to avoid when you’re trying to get more cashback and travel rewards.
Charges for credit card usage
Some vendors, merchants and service providers will charge you a fee if you use your credit card to pay. The fees are most common on utility bills, cable, internet, rent and insurance. Verify that you won’t be charged a fee for using credit.
Annual Fees
Some reward cards have annual fees. You should consider these fees when calculating whether they are worth it. You can avoid annual fees by choosing reward cards that do not charge.
Budgeting mistakes
If you use your credit card to pay for everything, it may make your finances easier but could also throw your budget out of balance. You should only spend on items you were planning to buy anyway. Track your spending and pay off your credit card regularly.
Debt
If you want to earn rewards, never use your credit card for purchases that you cannot afford to pay back. You’ll always pay more in interest than you do in rewards. You’re better off using cash or debit if you are worried that credit cards will lead to debts you cannot afford to pay back.
