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Credit card rewards are a great way to save on the things you normally pay for. See how one writer chooses to quickly stack their rewards. [[{“value”:”
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For a while, I saw credit cards as the enemy, something to be avoided at all costs. Eventually, I stuffed all of our cards into an envelope and buried them at the bottom of a safe. And that was okay for a time.
When I buried those cards, we had debt to get rid of and no clear plan for how we would use our credit cards if we were ever to take them out of hibernation. And then we discovered rewards.
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Want to earn more rewards? Start with a list
If you want to supercharge your credit card rewards, you must start with a list. If you don’t already have a monthly budget, jot down each of your monthly bills and how much you spend. The easiest way to ensure you don’t miss anything is to scan your last bank statement.
Review the list to identify which bills you can pay using a credit card. Out of all our monthly expenses, there were only five I couldn’t (or shouldn’t) pay with a card:
MortgageLife insuranceAuto loanTaxesInvestments
Everything else was on the table.
Your list will be different
If you’re a renter, your landlord or management company probably won’t allow rent payments by card – not directly, anyway. However, monthly expenses like utilities, groceries, and pet insurance are easy to pay via credit card. If you have a child in daycare, check with your provider to learn if they accept payment by card.
If you’d like to pay auto insurance by credit card, ensure there are no added fees. Earning rewards points only makes sense when it doesn’t cost you anything, including fees or interest.
By charging every possible expense, we rack up thousands of reward points per year. My husband and I like to save these rewards for travel, but there are plenty of other ways to use them. We can save them up to cover the cost of holiday gifts, use them to buy birthday presents throughout the year, or even cash them in to pad our savings account.
The most important thing
The average credit card interest rate in the U.S. is over 21%, making it easy to spend months or years paying interest. The only way to take advantage of rewards without allowing a credit card company to take advantage of you is to pay your card off in full by the end of the billing cycle.
To avoid interest, I check our credit card balance every Friday and pay it off. Paying the bill weekly means we never cut it too close to the due date and have a smaller balance due at one time.
Some weeks, it’s less painful to pay the credit card off in full than others, but I never let part of the balance float into the next week. I fear that doing so would make it easier for the balance to be carried into the next month.
Set a backup
As someone who worries like a grand master, I like to think 10 to 15 steps ahead. For example, I’m in charge of paying bills in our household. What if I fall into a well or I’m hospitalized and not around to pay bills?
Setting up autopay through the credit card’s website gives me the option to choose “pay statement balance.” That way, I know that the bill will be paid even if I’m away for weeks or months at a time.
Note: Even though I have autopay set up on all my credit card accounts, making weekly payments overrides the need for automatic payments to kick in. In other words, I never find myself making two payments during the same payment period.
Other easy ways to boost rewards
I have never found a better way to build up reward points than using the card extensively and paying it off in full. However, depending on the credit card you plan to use, there may be other ways to boost rewards. For example:
Add an authorized user: Credit card companies sometimes offer a reward for adding an authorized user to your account. Let’s say you have an adult child or close friend you completely trust. Check to see if your favorite credit card offers a bonus for adding them to your account.Refer friends: One of those most common bonus offers involves inviting friends to apply for a card. If they’re approved, you get a bonus.Get on the same page: Let your spouse or significant other know which card you’re focused on. There’s nothing wrong with that person using another card and building up rewards with two (or three) different cards, but if you’re trying to build up a large reserve of rewards on one card, ask for their help.
Note: I tend to focus on one card at a time, which can be problematic. Here’s why: Credit card companies are in the business of making money, and if a cardholder stops using a card, the company is within its rights to cancel the card for inactivity. I schedule a time at least twice a year to go through and use each card to make a small purchase. The next week, I go back through and pay each purchase off in full.
I understand how dangerous credit card debt is to your finances and peace of mind. If you’re a compulsive spender or worry that you might get into credit card debt, it’s okay to keep your cards locked away until your situation changes.
However, if you feel safe using your favorite card and want to build up reward points fast, this just may be the best way to accomplish your goal.
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The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Dana George has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.
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