So far I've discussed items that have the biggest limitations - credit card sign-up bonuses (especially applying for multiple cards) can be dangerous if you don't have excellent credit, and reaping big benefits from travel is difficult and expensive if you're not traveling on someone else's dime (work trips, etc). If you fall into either or both of those categories, don't give up hope! This post has the fewest limitations so far, and the next topic to come will cover tricks everyone can use! So hang in there...
Hold on tight, this post is a long one! But I feel like it's applicable to pretty much everyone to varying degrees - earning through spending. Again, the trick here is to only apply this to purchases you're already making - it is an extremely rare occurrence that an offer will be so good it's worth a superfluous purchase just for the miles. The only exceptions I can think of offhand are for obtaining that last small amount needed to bump you up to the next status or to get you the final miles needed to book the trip of a lifetime. And even then, I would pursue every other option - free and already planned purchases - first.
In my earlier post about credit cards, I focused on the pros and cons of opening an account - sign-up bonuses, protecting your credit, and annual fees. Now we'll cover what to do with the cards once you have them. The single biggest factor here is something called category bonuses - most credit cards give you a standard 1pt/$1 spent, but some will give you more points for specific types of spending. The Chase Sapphire Preferred card I just received is the standard 1pt/$1, plus 2pts/$1 on travel (airfare, hotels, rental cars, taxis) and restaurants (as far as I can tell, fast food counts as restaurants in this case). On top of that, at the end of the year I get a 7% bonus on any points I earned over the last twelve months, including the sign-up bonus. This bumps my redemptions to 1.07pts/$1 and 2.14pts/$1. Not bad! Ideally you'll want a mix of cards so that you'll have bonuses (boni??!) in every major category, so finding a 2x or even 3x on gas and groceries would be a great next addition!
Bonus categories are the simplest step in maximizing rewards on spending. Things get a bit more complicated - and more rewarding! - when you throw in online shopping portals. A shopping portal is a website that connects to other merchants but gives you a percentage back on your purchases - either as points or cash. Let's take a look at an example - I'm attending a house-warming party in a few weeks, and I'd like to buy a vase for the host (who just so happens to be my roommate...). I could go straight to the store and by it on my Chase card, earning 1pt/$1. I could go straight to the Target website, also using my Chase card and earning 1pt/$1. Or I could log into Chase Ultimate Rewards and click on Earn Faster as shown below.
As you see here, I can be redirected from Ultimate Rewards to Target in order to earn an extra 3pts/$1. Factoring in the rewards my card already gives me (1pt/$1 plus a 7% annual bonus on all points earned), that brings me to a total of 4.28pts/$1, awesome! And now in three weeks when I'm sick of seeing the empty vase sitting on the fireplace mantle, I'll go through Ultimate Rewards to 1-800Flowers.com for 9x extra pts - a total of 10.7pts/$1!
Ultimate Rewards is the shopping portal for Chase Bank cards; other credit cards will have their own shopping portals with different reward amounts for the same merchants. There are portals that don't require credit cards as well, such as going through Delta SkyMiles or HHonors. Given the large number of portals available and the fact that some of these bonuses change from month to month, a website like evreward is crucial. Simply go to the site and type in the name of the store you plan on shopping at - let's take Sears as our example in this case. The site lists current coupons and discounts, as well as what each shopping portal is currently offering from the store, broken down by cash back, loyalty programs (essentially credit card programs), and FrequentFlyer/Hotel rewards:
For this example, I would recommend going through American Airlines for the highest 6mi/$1. Hilton is also 6x, but as a broad generalization hotel points are worth less than airline miles - a $125 room for 25,000 Hilton points is a common redemption option, as is a $450 plane ticket for 25,000 AAdvantage miles, giving the miles a much higher pt/$ redemption (more to come on this later). There are a few things to keep in mind when using shopping portals:
- Portals can be touch-and-go. To increase the chances of getting all your points, do your comparison shopping before going through the portal. In other words, don't go through Ultimate Rewards to Target, then to Sears, Walmart, and Kohls, then finally back to Target to make the purchase. Be sure to start with an empty shopping cart and complete your purchase before leaving the site.
- Cash back rewards can be a good option as well - when I feel my miles/hotel points are where I need for my upcoming trip, I'm considering using cash back accounts to generate funds to cover other travel expenses like food, entertainment, etc. For this, evreward is missing a few big ones in the cash back category - most notably FatWallet that I've used in the past, and TopCashBack, which has recently become my personal favorite, as it generally seems to have the highest kickbacks.
- Be sure to factor in all applicable sales tax, shipping fees, etc. Read the Terms and Conditions carefully as well - sometimes certain merchandise doesn't qualify (like personal care items at Target), and often times gift cards/prepaid Visa/Amex cards are excluded.
Chances are somewhere during the previous paragraph you were hit with an exhilarating idea - what if we combine category bonuses and shopping portals? And that's when things start to get crazy! The Chase Ink Bold business card earns 5pts/$1 on office supplies, and the Ultimate Rewards mall offers a bonus 10pts/$1 at Office Depot, for a total of 15pts/$1! While a lower rate at 4pts/$1, Staples has been another community favorite because lately they've been offering Free-After-Rebate deals once a week - buy the limit of 10 copies of Trend Micro for $45 each, earn 4,050 points using the Chase Ink Bold card, then use the "Easy Rebate" system to get a check in the mail for your entire $450 back! You're essentially getting free miles for putting up your money for four to six weeks (plus sales tax, depending on which store [more importantly, the state it's in] you choose to pick up your downloadable order at).
Two last quick topics. While many sites exclude gift cards, not all do. There are entire communities based on buying gift cards, using them to buy other gift cards (i.e. use a Sears gift card to buy an eBay gift card at your nearest Sears store), and then selling them to sites like PlasticJungle. On top of earning miles for purchasing the gift cards, you can use sites like GiftCardGranny to track the buy and sell rates, essentially becoming a gift card broker! Between bonus categories, shopping portals, and gift card brokering, the options for points and cash can quickly become overwhelming... I recommend choosing what you're most comfortable with and sticking to that! I love taking advantage of category bonuses and shopping portals, but have not yet gone as far as taking advantage of free-after-rebate offers or gift card churning - to each his own!
I'll close with a simpler topic to help relieve any headaches, including mine... Dining programs. Almost every airline offers one, and they're essentially all the same. Here's the link for SkyMiles dining that I'm currently using. Here's the story: sign up for the program and register your credit card. Forget all about the program. Next time you use that card at a restaurant in their network, points are automatically added to your account! No promo codes, bothering the waiter (who is probably clueless about the program anyway), etc. A few notes here - the network is the same for every reward program, and you can't double-dip. Whichever program you last registered the card with is the one that will earn the points. You can, however, register different cards for different accounts. There are also bonuses for your first dine in each program!
Whew! Made it. I promise the next post will be shorter, free-er, and mathless! Stick around for my favorite category - entirely free points and miles...
Full disclosure: I get a small referral bonus ($5) for the TopCashBack link. Here is the non-referral link if you prefer; otherwise your generosity is greatly appreciated!
You are a brilliant man, Mr. Hamann.
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